Each year, an increasing number of investors around the world are attracted by international financial centers to establish business in a form of an offshore company, offshore trust, offshore mutual fund, offshore insurance company, open an offshore bank account or even start their own offshore bank. It is estimated, that around 60% of the world's wealth is held on offshore accounts by using offshore companies or offshore trusts and that around 50% of the world's trade in goods are transacted through various offshore jurisdictions.
An offshore company is a company that is incorporated in a foreign nation. Typically,an offshore company does not conduct most of its business in a country where it is officially based. An example of an offshore company would be a corporation that is formally headquartered in British Virgin Islands(or other typical offshore jurisdiction), but carries out most of the operations in the Russia.
Thus, in most cases, an offshore company will be run and managed by the nationals of the country which comprises its primary market or constitutes its main base of operations. Most prominently, offshore company structures are established in order to benefit from loose government regulation and low taxation. For those very reasons, a domestic company may often move offshore to become an offshore company. An offshore company is also referred to as a non-resident company.
The main advantages of offshore companies are:
- nominee services through lawyers
- highest level of privacy protection
- limited liability without any paid up capital requirement
- no taxation on any kind of income
- no accounting requirements
- no reporting requirements
- no accountants costs
- no auditing
- no requirements on profession or financial standing
- business can be conducted internationally
- and many more
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