Image source: Plymouth City Council
Setting up an offshore corporation or establishing offshore company incorporation is a great way to keep your taxes low, and increase the profitability of the company. They can be used for everything, from tax saving to asset protection, and anyone can potentially benefit from the offshore business incorporation of such an entity.
The other benefits of incorporating an offshore company are – the ability to trade internationally, financial confidentiality, asset protection, business and land ownership in a foreign country, increased financial flexibility and privacy. Setting up an offshore corporation, however, does not alleviate the need to pay taxes in the country where the income is derived. You may find it interesting that by setting offshore incorporations you can have higher quality of asset protection, than simply setting up your company in the United States.
Different uses of Offshore Companies for asset protection
Most offshore destinations will let you have an offshore company, where earnings are fully shielded from all future liability. The different uses of offshore companies are listed below:
- Use the offshore company to hold real estate. This works best when the real estate is free of mortgages and other encumbrances. The title is transferred to the anonymous bearer share corporation, and so, recorded in the government registry. The confidentiality of the business owner is maintained, and no one can tell who currently owns the property. This is a useful tactic used by people residing in countries with high crime rates, where property owners are at risk of being kidnapped, having their home invaded, being robbed, extorted and blackmailed. It also works as a deterrent against frivolous litigation, since most attorneys would run an asset check before filing a case to make sure that there is something to collect, and real estate is very hard to run away with.
- Use the offshore corporation to write a mortgage against real estate. These could be first mortgage, second mortgage or third mortgage, etc. This, so to speak, removes equity from a property, lessens the risk of you becoming a crime victim, and frivolous litigation.
- Use the offshore corporation to write a loan against property such as heavy equipment, boat, airplane, etc. This removes the equity from the item, thus, removing it from being a focus point of attorneys interested in filing a frivolous lawsuit. The loan can be a subordinate loan or a senior loan.
- Use the offshore company to own your boat. Register the ship in BVI like the majority of cruise lines do. It is a great way of making a wise investment in an ever growing business. Using offshore companies make owning a boat simple and secured.
- Use the offshore company to register your airplane. Provides anonymity and asset protection.
- Use the offshore company to own art, coins, stamps, jewelry or other collectibles. Document and receipt the transfer to the offshore corporation.
- Use the offshore corporation to take loans. The loans can be secured or unsecured. Both the bearer and the corporation could settle for regular payments, interest only, with balloon payment at end of term, or other terms.
- The offshore corporation can be used as an intellectual property company, which holds copyrights, trademarks, software, and licenses.
- The offshore company can be used to invest in stocks, bonds, futures, commodities etc. with everything in the name of the anonymous offshore company.
- Offshore companies can lease equipment, vehicles, machinery, real estate etc.
- An offshore company incorporation can own the shares of other companies or legal entities
- The offshore business incorporation can own bank accounts, trusts, fixed deposits, CD’s etc.
- The offshore corporation can be used for internet businesses. The website can be owned and registered in the name of an anonymous bearer share incorporation, thus providing anonymity and protection from personal liability and protection of assets
- The offshore corporation can be used as a Bidding Entity, where privacy is important, thus concealing the true owners’ identity from the bid process.
The BVI is by far the world’s leading choice for offshore corporate domicile. British Virgin Island has carefully crafted and updated its companies’ and other legislation policies to make sure that they contain robust investor and creditor protection features that many other jurisdictions are envy of.
The BVI has political stability, combined with an efficient and reliable legal system. In addition, BVI companies are accepted for listing in some of the world’s biggest stock exchanges, such as NASDAQ, NYSE, the London Stock Exchange and the HKSE. So, given all of the above, it should be clear that there are no reasons for concern by investors when establishing an offshore BVI company incorporation.