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International entrepreneurs set up an offshore company for a variety of reasons, including:
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| 1. | Legally minimising tax - entrepreneurs and organisations set up an offshore company for this purpose. For example, if properly-structured the international income of an offshore company is legitimately tax-exempt. Refer to the Inland Revenue Authority of Singapore website for details of Singapore's beneficial tax rules. Furthermore, an offshore company accesses double tax treaties signed between two countries.
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Transfer pricing - through this strategy, profits are migrated from a high tax jurisdictions (e g Australia) to a low or zero-tax
offshore jurisdiction (e g Hong Kong). By setting up an offshore company, a bridge is created to act between a transaction
that would otherwise take place directly between two high tax jurisdictions. Starting a company offshore to achieve this is legal if properly structured.
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| 3. | Large corporations set up an offshore company when operating in economically and politically-unstable countries. By starting a company offshore, the perception of risk is diminished because asset ownership and the operational base is migrated offshore. |
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A person working overseas, for example a consultant, may set up an offshore company to limit tax exposure. The individual receives a fixed consulting fee in the country of employment, with the balance accumulated offshore. Similarly, designers, authors,
consultants and entertainers consider starting a company offshore to receive fees for services.
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Setting up an offshore company or transferring wealth to an
offshore trust is an ideal asset management strategy for expatriates who do not wish to expose their assets to the tax and inheritance
laws of their home country. Where a person lives outside a territory and owns assets
in that territory (for example, property), then such assets may be protected
against inheritance tax and higher rates of taxation. |
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International entrepreneurs set up an offshore company to invest in property, stocks and
shares, commodities and other assets benefit from anonymity and tax savings.
Funds accumulated by starting a company offshore can be invested or deposited globally, although
funds may be subject to tax where the investments
are lodged.
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Payroll costs and travel expenses are reduced by starting a company offshore, for example paying
employees working overseas from an offshore base. This also offers tax
relief and social security saving benefits for employees. |
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An offshore company can own trade licenses and royalty rights without the company
paying tax on royalty receipts. Healy Consultants advises companies on the sale of patents, technical know-how, and license and
franchise agreements of an offshore company, which is then owned by an offshore
trust. Upon acquisition of the rights, the offshore company enters into agreements
with licensees wishing to utilise the patents, technical know-how, licenses
or franchises around the world. The income, subject to applicable withholding
tax, is accumulated tax-free in the offshore company. By careful selection
of the jurisdiction for setting up an offshore company, withholding taxes can be substantially reduced by the
commercial application of double taxation treaties. |
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Some of our clients choose to set up an offshore company as a captive insurance company for certain types of cover such as product warranty. Starting a company offshore for captive insurance can generate tax deductible premium and tax savings through the offshore insurance company. |
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Contact Us |
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To set up an offshore company, contact email@healyconsultants.com or call us in Singapore at (+65) 6735 0120.
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Back to Offshore Company Formation page. |
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