Individuals and corporations use offshore companies and offshore planning to gain a range of benefits, including:
Asset protection, through tested legal systems, the sanctity of contracts and political stability
Fewer restrictions, less bureaucracy and fairer treatment
Foreign investment inducements
Tax reduction, including customs and duty exemptions, and in some cases zero taxation
Asset enhancement, higher yields and returns and improved exchange convertibility
Increased or maintained rights to privacy, in banking and elsewhere
Reducing costs, through access to low cost areas, or free remittance of profits and capital, reducing overall costs
Improved risk management, such as greater security of property rights and access to foreign insurance and reinsurance.
The availability of sophisticated banking facilities and offshore experts
Offshore companies are principally used for:
Trade, including online trading
Financing & Ship management and yacht ownership
Professional consultancy and services
Patent, copyright and royalty holding
Personal and corporate tax planning
COMPANIES USING TAX ADVANTAGEOUS “ONSHORE” JURISDICTIONS
Nearly all countries offer tax regulations that encourage inward investment from international companies and individuals, through different combinations of tax planning regulations and other related opportunities making it advantageous for tax purposes.
These measures include:
Personal and family wealth management and tax planning
Double tax treaty planning in relation to dividends, interest and royalty payment
Establishing holding, international headquarter for treasury and finance operations
In recent years, tax collectors have become more heavily armed with international exchange of information treaties and provisions.
Right now the offshore world is shaped most by the careful implementation of tax advantageous structures domiciled in diverse high tax onshore countries, including the UK, Spain,Austria, Switzerland, Greece, Portugal, Belgium, Luxembourg, the Netherlands and Singapore.
Businesses successfully use low tax regimes and legal opportunities to minimize taxes in high tax countries. The success of such structures depends heavily on a number of aspects relating to the existence of double tax avoidance provisions, controlled foreign company and management, thin capitalisation, transfer pricing, capital gains tax, participation exemptions, and a multitude of ever-evolving tax regulations.