When you’re considering moving some of your business interests offshore, there are a plethora of countries from which to choose. Each country or jurisdiction, comes with several advantages and disadvantages, so it can be difficult to choose where to invest your time and money. Here are six tips for choosing the best offshore jurisdiction for your needs.
It is important to consider both the political and economic climate of a country when searching for an offshore jurisdiction. Most business owners don’t want to invest their time and money in a country which isn’t stable because it could mean losing their investment, and in some cases, putting people’s lives at risk. Offshore companies in Vanuatu enjoy a very stable and welcoming climate for international businesses.
Modern Business Legislation
Another important factor to consider is the jurisdiction’s business legislation. While some jurisdictions have introduced more flexible, modern laws to attract international business interests, others have updated domestic legislation to meet requirements for offshore corporations. An offshore formation company can evaluate and recommend the best jurisdictions for your company’s offshoring needs.
Determine Taxation Needs
Offshore jurisdictions are divided into treaty or non-treaty jurisdictions, and choosing one depends on which taxes you wish to avoid. In treaty jurisdictions, your company can take advantage of the double tax treaty and pay minimal withholding taxes on dividend payments and royalties. Many non-treaty jurisdictions do not tax company profits and only require companies to pay a fixed license fee every year.
Essential Corporate Criteria
When selecting a jurisdiction, you need to make sure it offers these criteria, among others:
- Low capital obligation
- Limited liabilities
- Minimal statutory filing requirements
- No obligation to hold director or shareholder meetings in jurisdiction
- No obligation to disclose beneficial ownership
- Limited disclosure obligations for selected bodies
- No optional obligations for auditing of accounting records
- Wide availability of company names or suffixes indicating limited liability
It is important that the jurisdiction you choose has a modern technological infrastructure and banking infrastructure, as well as modern physical infrastructure to make it easier to get from one place to another. You wouldn’t want to invest time and money in a country where telephone or internet service is intermittent, as this could cost your business money. You also have to consider the time zone differences between the jurisdiction and the location where you’re based.
Making sure there is little or no language barrier is a must when selecting a jurisdiction. Complications could arise if there are misunderstandings when information is translated from English to another language. It is best to limit jurisdictions to ones where English is spoken when conducting business. This will minimise the chances of problems arising when speaking with government, banking, or other officials.
When moving some of your business operations offshore, an offshore formation company can help you select a jurisdiction based on what you want to accomplish by offshoring. They will be familiar with the laws of the jurisdictions that they recommend to you, so you can concentrate on your company.