The term “offshore” typically refers to business activities or investments conducted outside one’s country of residence. An offshore company, also known as an international business company (IBC), is a business entity registered outside the home country of its directors, shareholders, and beneficial owners. Offshore company registration can occur in various jurisdictions, including the British Virgin Islands (BVI), Anguilla, Belize, Seychelles, Bahamas, Panama, Cayman Islands, and more. This is often pursued to achieve various financial, legal, or tax advantages.
Why Offshore Company Formation?
Offshore companies are widely used to protect assets, legally minimize tax obligations and provide corporate structures necessary for international business operations. Businessmen and foreign investors especially from countries with high taxes became attracted to these offshore jurisdictions and enjoy total exemption or at least a substantial reduction of the taxes from their profit.
Why Opt for Offshore Company Formation?
Benefits of an Offshore Company:
- Mitigating Taxes: Tax avoidance is generally classified as a crime, however, there are ways to mitigate taxes without breaking the law.
- Reputable Image: Incorporating an offshore corporation in Singapore conveys legitimacy and prestige to your business, as Singapore is not considered a tax haven. This conveys seriousness and professionalism to stakeholders such as employees, lenders, and other experts you may engage with during your offshore company registration process.
- Optimize confidentiality
- Lower maintenance and operating costs
- As a vehicle for holding assets such as Intellectual Property and real estate Investments
- Offshore company formation can improve cross border sales for the holding company
- Decrease capital gains and inheritance tax when you park your assets under an offshore entity
- Ease of compliance reporting in certain offshore jurisdictions
An offshore company is good for businessmen, consultants, traders, expatriates, holding intellectual property rights, for the custody of real estate, or inheritance purposes.
Factors To Consider for offshore company registration
- privacy and protection,
- professional services and investment management options available,
- international banking options,
- for a business, available workforce,
- tax filing and payment obligation,
- locals audit or reporting requirements,
- world image/perception, and h. countries that offer specialized structures (niche markets).
Incorporation Checklist for Singapore offshore companies:
- Company Name Approval
- Name must be approved by the Company Registrar prior to incorporation.
- Directors
- Minimum 1 local director
- Shareholders
- Minimum 1 local or foreign shareholder
- Company Secretary
- 1 local secretary required
- Paid-Up Capital
- Minimum paid-up capital of S$1
- Registered Address
- The company must have a local registered address
- Incorporation Agent Is Appointed
- You must engage a professional firm for registration
- Required Documents for Incorporation
- Copies of shareholders’ and directors’ passports
- Identification of proposed shareholders and directors with residential addresses
- If the shareholder is a corporate entity, information about the parent firm
- Bank Account Opening
- Individual must be physically present
- Registration for GST
- Company may need to register for GST
- Obtain Business Licenses or Permits
- Certain business activities require licenses
- Follow Ongoing Compliance Requirements
- Relocation to Singapore
- You are free to incorporate and operate your Singapore offshore company from overseas without the need to relocate
Types of business:
- BVI – Business company
- Marshall Islands – International business company
- Cayman Islands – International business company
- Cyprus – Limited liability company
- Malta – Limited liability company
- Bermuda – Bermuda exempt company is most popular
- St. Kitts / Nevis – International business company
- Liberia – corporation, LLCs, partnerships, and not-for-profit businesses
- Mauritius – Global Business Company Category 1 (GBC1, offshore) and the Global Business Company category 2 (GBC2, international)
- Hong Kong – Limited liability company
- Seychelles – International business company
Features of International Business Company: a. a convenient entity type for opening an offshore bank account and obtaining a credit card, b. a confidential company for an international holding, acting as a parent company, c. an ideal vehicle for legitimate transactions, such as e.g. real estate investments, d. an optimal and confidential way of investing offshore, e. IBC may serve all your private and business necessities when you are abroad, f. a handy corporate tool for a yacht or ship registration, and g. an excellent structure for employee recruiting initiatives in the international business setting.