Tax savings:
Offshore companies enjoy business tax savings due to exemption from paying tax on profits earned outside the jurisdiction through existing double taxation treaties with major economies of the world.

Confidentiality:
Confidentiality of company information is an important benefit of offshore companies

No need to maintain accounts:
IBC's are not required to prepare (or submit) company accounts to any authority

Minimal Compliance requirements:
Offshore companies have minimum compliance requirements before and after incorporation.

Tax Benefits:
Offshore company afbio can save you from payment of capital gains tax, inheritance tax and death duties.  All dividends, interests, royalties, rents, compensations and other amounts are exempted from the payment of income tax

Movement of Foreign Exchange
No restrictions on the movement of foreign exchange.

Property Companies

In certain circumstances there are significant tax advantages in having properties held by appropriate domestic and/or offshore mechanisms. For example, for non-domiciled individuals in the UK, a local company owned in turn by a tax-free company can legally avoid all capital gains taxes. The reason for this is that "shares" are considered "moveable" property under British law and capital gains realised by a non-domiciled individual through his or her interest in the offshore 'tax free' company is not a British taxable event unless the gains are directly remitted.

Further, by using appropriate tax treaties it may also be possible to arrange "back-to-back" loans to virtually eliminate domestic tax liability on rental payments. In respect to Continental property acquisitions, even in jurisdictions such as France, Spain and Portugal is also possible - with correct planning - to avoid CGT or equivalent taxes and various property acquisition duties (which are extremely high in the case of France) by using double taxation treaties/companies. However, whilst Britain and Portugal have very favourable tax laws especially for non-domiciled individuals, the French fiscal system always demands local professional advice.

If you would like to know more about international property acquisitions ISH Legal & Business Publications can provide Intelligence Unit Reports (I.U.R.'s) for Britain, France and Spain - For details on our list of publications press here

Intellectual Property

In many cases offshore/tax exempt companies can be very successful in exploiting the various international withholding tax rates for dividends, royalties and interest. For example, it is very common, for a nominal consideration, to transfer patent, copyright or trademarks in favour of an appropriate offshore/tax exempt company before significant appreciation. Once acquired it then being possible to issue intellectual property (IP) sub-licenses or exploitation rights to appropriate third party structures.

Yacht / Vessel Registration & Management

Without doubt in recent years there has been a great transfer of merchant navy registration from traditional areas like Britain, Norway and Greece to offshore shipping jurisdictions such as Panama, Liberia, the Isle of Man, Cyprus and the British West Indies. Correctly advised, an individual can also benefit from such tax free/low tax environments. Apart from the lower registration fees it may also be possible to rent or charter a vessel without any significant, or even any tax repercussions.

Such benefits together with the ability to maintain a respectable flag - if a vessel is registered in the Channel Islands or a British colony it is fully entitled to fly the "Red Ensign" as if it was a native British vessel - have meant that few private yachts of any size are today registered in their home territory. In addition, in certain circumstances it may also be possible to purchase a yacht through the Isle of Man with a local tax exempt company and then reclaim back any VAT paid by registering for VAT on the Island.

With correct advice an Offshore company or a Tax Exempt company can afford many significant legal tax savings throughout the world, providing you and your company with a competitive advantage, affording you confidentiality/security and perhaps even save on future inheritance taxes.

Offshore/Tax Exempt companies are separate legal entities

Like their domestic cousins Offshore/Tax Exempt companies are totally separate legal entities to any individual that may own them. This very simple fact allows an offshore company despite the fact that its owner(s) may live thousands of miles away to be subject to the laws and taxes of the place where it has been registered and/or managed in the case of non-resident companies. Therefore, if the jurisdiction of your choice has no corporate taxes then your company will have no tax obligations although obviously your personal tax position might be different.

International Trading

If a firm has significant business in a third party jurisdiction it is often possible to reduce the overall tax position by transferring management and control to a more tax efficient area. For example, if a British firm purchased a given type of good in Italy for resale to the Middle East it would seem inappropriate to say the least that such a transaction should be subject to UK corporation tax. A potential solution would be to set up a company in a low tax area such as Cyprus to specifically control these transactions. If this is done correctly and does not offend the anti-avoidance provisions of the Taxes Act, 1988, it should be possible to benefit from for example the Cypriot corporate tax rate 10.00 %.

Obviously, any remittances back to the UK may be subject to full UK taxes, however, those funds not so required should be available for investment elsewhere. In respect to Cyprus, the fact that it has an extensive double taxation treaty network, demands the submission of annual audited accounts and, in this example, is strategically placed, all goes to prove the commercial veracity of the establishment of the Cypriot company/office. Even better, in certain circumstances it may be possible to reduce the flat 10.00% tax rate by inserting an offshore limited partnership (this being tax free) with taxes only being paid on that ascribed proportion of profits earned by the Cypriot company in its capacity as the "general partner". The 'limited' and passive partners having no direct tax consequences.

Therefore, if such are tax haven companies, this preventing direct fiscal remittance to the appropriate high tax 'mother' country, all profits earned by the passive partner(s) will be totally tax free.

Investments

Offshore/Tax Exempt companies can often be used as an investment conduit in order to allow money /assets to grow in a tax friendly environment with you, as opposed to the taxman, deciding if, when and how much money should be repatriated.

International Consultancy

With the growing demand for professional consultants to work outside their usual country's of residence there is often the possibility of greatly reducing or even eliminating individual and corporate tax consequences - often using offshore companies. The reason that this possibility arises is that it is often possible to legally extricate oneself from the tax system of ones home country for a fiscal year or more.

During this expatriate period it may then be possible to avoid the tax system(s) of the chosen host jurisdictions by limiting ones period of residency in any given country to between 4 and 6 months. These being the normal European 'breathing' periods before full local tax obligations exist. The purpose of the offshore company is to provide a fiscally beneficial entity to issue necessary invoices, register for VAT (possible in the Isle of Man) and/or act as a controlling vehicle for future 'home' country remittances.

Confidentiality

As competition becomes more intense, the ability to restrict competitor's access to your company's true financial position could mean the difference between success and failure. In certain circumstances it could also be necessary to 'mask' the true ownership of a company. Unfortunately, such confidentiality is not available directly in the UK or in most other West European countries, however, it can often be guaranteed by using offshore/tax exempt companies.

Family Protection

One of the major objectives of many tax mitigation clients is to ensure that wealth established during their lifetime is not fettered away by future generations/circumstances. To avoid this tax planning firms can often provide a whole range of 'tailor-made' companies, trusts, foundations and establishments which can be used together with many of the other tax mitigation mechanisms already outlined. In particular, they can often be formulated to allow, whilst the original "settlor" is alive, for initial investment flexibility followed by a "fixed" structure upon his or her demise. In addition, with the correct advice, "asset protection schemes" can also legally avoid the almost universal "forced heirship" provisions of civil law jurisdictions.