Offshore Company |
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An offshore company is an effective tool for strategic asset management. Advantages of incorporating an offshore company include: i) income earned offshore may not be subject to tax, ii) depending on the jurisdiction, there can be no capital gains or inheritance tax, iii) tax is not deducted from interest earned. |
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Jurisdictions often associated with being 'tax havens' have come under increased attention from governments trying to eradicate tax evasion activities. Singapore does not carry any tax haven image and there is strong demand for offshore company formation within this jurisdiction. |
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Practical uses for Offshore Companies |
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| Transfer Pricing | Overseas Property | ||||||||||||||||
| Professional Service | Employment Companies | ||||||||||||||||
| Inheritance Planning | IPO and Capital Raising | ||||||||||||||||
| Asset Protection | Licensing Company | ||||||||||||||||
| Investment Companies | Captive Insurance Company | ||||||||||||||||
| Shipping Companies | Single Purpose Trustee | ||||||||||||||||
Transfer pricing, also known as profit up-streaming, is the strategy of moving profits from a high tax jurisdiction to a low or zero tax offshore jurisdiction. What is required to achieve substantial tax saving is to interpose a low or zero tax offshore jurisdiction company in between a transaction that would otherwise take place directly between two high tax jurisdictions. Transfer pricing is not illegal if correctly structured and implemented. For example, an offshore corporation may act as a distributor or sales company accepting orders directly from the customer and arranging delivery of the goods direct to the customer from the manufacturer or place of purchase. The surplus arising on the difference between purchase and sales price may be accumulated free of tax. This can be of particular interest where goods are purchased in one country and sold in another, yet the businessman is located in a third country. Goods may be shipped directly from the supplier to the purchaser with the supplier invoicing the offshore company, which then invoices the purchaser at a higher price, retaining the profit offshore. One of the major benefits of offshore companies would be that of minimizing international tax exposure through effective international tax planning. Healy Consultants provide advice to entrepreneurs on offshore tax planning opportunities. |
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Using a coherent offshore tax planning strategy, a person working overseas is able to limit his tax burden by receiving, into the country in which he is working, a fixed level of remuneration and accumulate the balance in an offshore company. Similarly, designers, authors, consultants and entertainers may assign or contract with an offshore corporation the right to receive fees due under a contract for services. |
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People who travel the world and expatriates often find that their connections with foreign countries create uncertainties and undesirable consequences for their wealth on their death. The transfer of wealth to an offshore trust can avoid these difficulties, the wealth is protected in a stable environment well away from the unwanted attentions of the tax and inheritance laws of foreign jurisdictions. Where a person is domiciled outside a territory and owns assets located in that territory (e.g. property), then such assets may be protected against inheritance tax and higher rates of taxation by holding the assets through an offshore company. |
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High net worth individuals gain privacy and save on professional fees by using an offshore corporation as a personal holding company. These entities may be suitable for inheritance planning and reducing the costs and time delays in probate. |
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The offshore company is investing in property, involved in online currency trading, stocks and shares, commodities and other assets, while providing anonymity and tax savings. Funds accumulated can be invested or deposited throughout the world, although the funds may be subject to the tax regimes of the countries in which the investments are located. There are countries with tax-exempt bonds or bank deposits where interest is paid gross. Healy Consultants can advise of the most efficient solution to meet your offshore tax planning requirements. |
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Yachts or ships may be owned by offshore companies and registered in an offshore jurisdiction which can prove a cheaper and more tax-efficient method of ownership. For more information, visit our Ship Registration in Singapore page. |
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Many of the challenges and expenses associated with investment in overseas property, such as holiday villas, may be avoided through the use of offshore companies to hold the title of the property. Sales of the property at a future date can be dealt with quickly and easily by the sale of the company shares to the purchaser. This also saves legal fees and overseas transfer and value added taxes levied by certain foreign countries. It can also be used to successfully avoid capital gains and inheritance taxes. For more information, visit our Asia Property page. |
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Payroll costs and travel expenses may be reduced by paying employees working overseas from an offshore corporation. This may also provide tax relief and social security saving benefits for the employees. |
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Several large corporations in economically and politically uncertain countries often diminish the perception of risk by moving ownership of assets and the base of their operations to offshore companies. For more information, visit our Stock Exchange Listing page. |
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To own trade licenses and royalty rights for which the IBC pays no tax itself on royalty receipts in the offshore jurisdiction. We frequently advise companies on the sale of patents, technical know-how and license and franchise agreements for offshore companies, which is then owned by an offshore trust. Upon acquisition of the rights, the offshore company enters into agreements with licensees wishing to utilize the patents, technical know-how, licenses or franchises around the world. The income, subject to applicable withholding tax, is accumulated tax-free. By careful selection of the jurisdiction, withholding taxes can be substantially reduced by the commercial application of double taxation treaties. |
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For certain types of cover such as product warranty. The creation of the captive can generate tax deductible premium and tax savings through the offshore insurance company. |
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Where the client creates own corporate trustee for family trust, thereby ensuring more effective control during a client's lifetime and saving on third party trustee fees. |
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Contact Us |
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For more information on the benefits of offshore companies and offshore tax planning, contact us at email@healyconsultants.com or telephone us at (+65) 6735 0120.
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Back To Offshore Company Formation page. |
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Buy Healy Consultants' Asia Business Set Up book, to order call +65 6735 0120 or e-mail email@healyconsultants.com
