What are off-shore companies? Offshore companies are companies that do not conduct substantial businesses in its country of
incorporation. Others call them non-resident companies for that.
Seychelles, British Virgin Islands, Panama are examples of countries that allows and has a number of off-shore companies because having such companies allow and promote a better tourism, makes the country and its neighboring countries and also affiliated countries prosper and known. This becomes a give-and-take situation, a win-win.
The idea is this; offshore companies have a number of benefits for individuals and as a company. It somehow minimizes the overall tax liability of an individual or a company since the business or the off-shore company can be structured so that the profiles are realized in ways to minimize tax. The simplicity of an off-shore business is also superb, well except for regulated businesses, especially for banks or other financial institutions, since some jurisdictions make it relatively simple to set up and maintain such companies.
The level of information that the registrar requires for companies varies from jurisdiction to jurisdiction, but reporting information is also simplified for these types of companies. Remember, the government allows, actually encourages companies to invest to their country.
Asset protection: The assets are organized and transactions are arranged in such a way that they are protected and shielded from future liabilities.
By using the name of the private company, the name of the person transacting and the principal name of the owner/owners may be kept out of the documentation. Offshore companies often have their own special offshore jurisdictions that tend to be lacks and not impose “thin capitalization” rules on such companies. Well again, except for the regulated entities such as banks and other insurance companies. And in return, this allows them to be formed in a purely nominal equity investment-a pretty good one especially for big companies.
Another good thing about offshore companies is the financial assistance they have. They are usually not prohibited from providing and offering financial assistance services for acquisition of their shares and others. This then avoids the hassle procedures some companies have to require in certain financial transactions.
The are a list of types of off-shore companies and a few are Company having a share capital, Company limited by guarantee, and Protected cell companies. Asking what kind of company they are is a must especially when you are the one investing or buying shares. There are also a number of features an off-shore could offer, but these features of course varies from company to company so the best way to know further is ask questions.