International Tax Planning

Offshore tax planning is an effective tool for strategic asset management. Below are practical uses for offshore tax planning:

Using an offshore company can legitimately minimise tax by properly structuring financial and business affairs. A classic example of offshore tax planning is offshore captive insurance companies. A major trading group establishes an offshore company to insure its various risks and can thereby obtain tax deductions on insurance premiums in its home jurisdiction while investing tax-exempt accumulated premiums offshore. For more information, visit our Offshore Tax Planning Strategy page. Although there has been increased attention from governments regarding offshore taxation policies, effective tax planning does still offer legitimate ways in which businesses can minimise their international tax exposure. International tax planning opportunities include restructuring your company, taking advantage of the low corporate tax rate and various tax incentives of certain jurisdictions.

Using a coherent offshore tax planning strategy, a person working overseas limits his or her tax burden by receiving, into the country in which he is working, a fixed level of remuneration. The balance is accumulated in a company.

The offshore company invests in property, stocks and shares, commodities and other assets, while providing anonymity and tax savings. Funds accumulated can be invested or deposited anywhere in 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 advises of the most efficient solution to meet our client's offshore tax planning requirements.

This offshore tax planning technique takes advantage of double taxation treaties between offshore jurisdictions, and the country in which an investment is made. For example, to see a list of some of the jurisdictions whose governments have signed such treaties with Singapore, please visit the Inland Revenue Authority of Singapore (IRAS) website.

Yachts or ships may be owned by an offshore company and registered in an offshore jurisdiction which can prove a cheaper and more tax-efficient method of ownership. For more information on this offshore tax planning method, visit our Ship Registration in Singapore page.

An offshore company may hold the title of an overseas property. Sales of the property are conducted quickly and easily by the sale of 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 on this offshore tax planning technique, visit our Asia Property page.

To own trade licenses and royalty rights for which the offshore company pays no tax itself on royalty receipts in the offshore jurisdiction. Our firm advises companies on the sale of patents, technical know-how, and license and franchise agreements to 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, withholding taxes can be substantially reduced by the commercial application of double taxation treaties.