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Types of Offshore Companies

Typically, our clients utilise the following types of offshore companies to structure international business and for tax planning:

  • Very low or zero tax offshore companies incorporated in jurisdictions often described as tax haven islands, such as the differing types of offshore company that can be formed in offshore company formation centres such as the Seychelles, British Virgin Islands, Belize.
  • Companies incorporated in jurisdictions which offer both offshore companies and onshore companies and which may benefit from favourable tax regulation or special offshore company regimes. For example Gibraltar, although not typically regarded as a tax haven, has a favourable tax regime which effectively means that correctly structured, managed and administered Gibraltar Companies can be utilised for undertaking offshore business and international business without paying tax in Gibraltar provided that any profits arising are not made in Gibraltar. This type of tax regulation is known as "territorial taxation".
  • The LLC or Limited Liability Company and the LLP or Limited Liability Partnership types of company. These classes of company are used for offshore business, international business and tax planning because they have the advantage of limited liability but the flow-through characteristics of a partnership for tax purposes. By this, we mean that profits are divided among the members, in proportion to their respective holdings, and are taxed in their hands. In some circumstances, if all the members or partners are non tax resident in the domicile of the LLC or LLP company and no business is undertaken in that country, neither the LLC or LLP company nor the members or partners will be subject to tax in the companys country of establishment. Such companies are said to be "fiscally transparent" and examples include US LLCs, the Isle of Man LLC and the UK LLP.

The principal uses of all these 3 types of offshore companies are:

  • Trading
  • Investment
  • Holding
  • Financing
  • Personal and corporate tax planning
  • Professional services or consultancy
  • Patent, royalty and copyright holding
  • Ship management and yacht owning
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