An offshore haven has many benefits which includes tax savings, privacy and asset protection. Some of the tax havens available today are Dominica, Anguilla, Belize, Panama, British Virgin Islands, Seychelles, Hong Kong, Gibraltar, Singapore, Nevis and St Kitts. These countries all provide offshore services which include the incorporation of offshore companies, offshore partnerships, offshore limited liability companies, offshore trusts and foundations and offshore banking services.
There are many offshore havens available therefore an offshore haven must be chosen with much deliberation. When looking for an offshore tax haven there are a few points to take into account; the tax rate in the tax haven, the levels of protection and privacy provided and the types of legislation in place in the jurisdictions among other points. The best offshore haven is the one which puts itself in a position to not only provide offshore services but one which also have the necessary legislation in place to support these services. An offshore haven can be considered as a good jurisdiction if the laws which are in place are modern and are also very strict when in the areas of asset protection and security for offshore clients, corporations and other offshore entities.
Some of the best offshore havens today have been able to set up regulatory bodies that have the responsibility to supervise the provision of offshore services and regulate how offshore companies and entities operate. These bodies are often called Financial Commissions or Business authorities. The tax haven of Anguilla has established the Anguilla Financial Services Commission, Seychelles has the Seychelles International Business Authority and Dominica tax haven has the Dominica Financial Services Unit. These bodies are responsible for the registration of offshore companies, making proposals to the government with the view of improving the provision of offshore and financial services amongst others.
Clients choose to move companies and assets to the offshore tax havens not only to protect their interests but to take advantage of reducing tax liabilities a reality which has become a burden in many countries which are not offshore tax havens. Taxes in non- offshore haven are on the rise and are not always in the best interest of company and profits therefore tax havens become the better option to many individuals. The tax havens are those countries which levy very low taxes and in some case no taxes on offshore companies. A company registered as an offshore company in a jurisdiction will not have its annual profits subjected to local taxes in that jurisdiction once those profits have been generated outside of the jurisdiction. This means substantial savings for the company which pays no income tax or corporate tax on profits.
Most offshore tax havens are free of withholding tax, capital gains tax or Stamp Duty for offshore companies. Offshore trusts and foundations also benefits from the tax exemptions which have been mentioned above. Most offshore jurisdictions charge a registration fee which is very reasonable and an annual renewal fee to keep companies in good standing order.
Privacy and secrecy are two benefits that offshore business companies and offshore entities enjoy that companies in countries which are not offshore havens enjoy. Offshore legislation prohibits persons who work at companies’ registration offices, registered agents and offshore bank employees from divulging information about offshore entities and offshore bank accounts to third parties. This information can only be given out if the company’s shareholders, beneficiaries of exempt trusts and foundations and or offshore bank accountholders give permission. Breach of this is taken very in an offshore haven and there are stiff penalties in place for persons who divulge information. Only in extreme cases information about offshore entities or offshore bank accounts can be given out and this includes criminal investigations against these offshore entities.
Offshore havens will protect assets placed in offshore companies and offshore trusts and foundations from foreign legislation and seizure. Offshore laws in the tax havens are set up to provide maximum asset protection for clients. To set up an offshore company, offshore trust or foundation in the offshore jurisdictions is quite easy and affordable. In most offshore havens a registered agent can be employed to do paperwork and file them with the relevant authorities for offshore registration.