It’s the end of the year already, we all think about the Season’s Holidays. But after we are back to work, we still observe that times of financial difficulties are not over yet. Businesses go bankrupt, people loose jobs, the crisis keeps developing. Experts say it might be the worst world crisis ever seen, they do not expect upturn in at least two years. Meanwhile prudent people would do all possible to safe what they earned so far, rather than strive for economic achievements.
Many providers of offshore corporate services still promote offshore companies incorporated in tax haven jurisdictions as a panacea from taxation. They claim that the company is exempt from taxes in the country of incorporation. True. But it’s not carrying on any business in that country. Where does your offshore company carry on its business and pay taxes then?
If intangible assets are a significant part of your business, it is important to manage them in a way that meets the business and legal objectives. Moving the intellectual property offshore may contribute not only to its protection and flexibility of exploitation, but also reduce the tax burden on the related income.
When you first approach incorporation of an offshore company in your business you start with tax planning and legal matters to insure you are not breaking any laws and so on. But even when you are done with that part, you are still not safe, as now you have to choose the proper provider or registered agent to serve your offshore structure during its lifetime.
For those who are looking to obtain a second citizenship and passport it might be a vital task, being done once upon a life and thus very important. It’s normally well-known that you have at least to spend several years in a foreign country before it allows you to apply for its citizenship. Some may also hear that there are quicker programs called economic citizenship programs or fast-track naturalization programs supported by a number of countries. Here is where rumour and misinformation start giving the ground for numerous scammers looking for your money.
Most highly developed countries with free economy do not mind their residents working and earning abroad. A genuine trader is free to operate where he wishes. Naturally he is expected to bring his foreign profits home and pay taxes to the domestic state treasury. When he does work abroad but doesn’t bring money back there appear doubts whether he is a genuine trader or his only intention is to avoid domestic taxation. The purpose of controlled foreign corporation regulations in any country is to prevent residents from reducing their home tax liabilities by means of diverting profits to low-tax jurisdictions.
A lot of people are looking to benefit from using offshore companies. Those benefits come from difference of taxation and administration regimes in jurisdictions involved in international business operation. The governments, however, are very aware of possibility for residents and non-residents to use loopholes and avoid certain domestic taxes that would be otherwise payable.
Labuan is becoming one the leading offshore centers of Asia. Today it is a base for more than 60 banks, numerous IBC’s and captive insurance companies, the Labuan International Financial Exchange (LFX), an international Islamic money market.
Although we touched this issue in one of our previous articles (What is Offshore and Why do I Need It?), it appears to be not so obvious for many of our clients, especially when it comes to offshore banking. “I don’t have any business and look for an offshore bank account for saving and investment purposes, why might I prefer a corporate account instead of a personal one?”
UK is increasingly gaining in popularity as an attractive location for multinational business for many reasons including tax and non-tax ones. A wide range of international treaties and flexible domestic legislation let British holding company regime compete with that of Denmark and Holland attracting more and more investors.