When an offshore company is formed, there are many legal advantages which become apparent. Although an offshore company can be formed in a considerable number of countries across the world, there are certain benefits which demonstrate why it is a very popular financial option.
Pay lower taxes
The rate of tax which a business pays at the moment might be very high. In the United Kingdom, a 50% rate of tax has to be paid when profits are more than £150,000 and a 75% tax rate has to be paid by French companies when their profits are more than one million euros (£800,000). There are many countries around the world which charge those who start a business there a very low rate of tax or none at all. In Barbados, a tax rate of 1% to 2.5% is applied to International Business Communities (IBC’s) for profits which are made in this picturesque country. Other countries charge no tax at all and a company can keep all of their profits.
If you start a company, you probably cannot hide your assets. When you don’t want anybody else apart from close business associates to know about your assets, this is possible when you form an offshore company. It is illegal in many countries to disclose information about offshore companies. Therefore, an offshore company can be established to hide private information about who owns it.
Offshore banking can protect assets during a legal case
When a company is sued, their assets are taken into consideration in order to pay what is owed. In the United Kingdom, a business’s assets are used to pay creditors or when they declare bankruptcy. Therefore, managing directors or CEO’s might have their home repossessed or vehicle taken away to pay compensation which is awarded because of a court case. When an offshore company owns your assets, they cannot be used to repay creditors or for compensation when someone sues you. Therefore, if you have a home in the country which your offshore account is in and it is registered under that company, it won’t be seized because it is a business asset.
An offshore account is very simple to run
There are many countries which do not expect offshore accounts to submit Annual Returns. Furthermore, offshore companies don’t have to be audited in many countries. Although a company should run a tight ship, they don’t have to send a tax return by a particular date every year because this might not be a legal requirement in the country which it has been formed in.
If you want to create an offshore account, it is highly recommended that you get help from an experienced professional who is knowledgeable about local laws. Therefore, they will be able to register an offshore account very quickly and hassle-free.
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