The Benefits Of Setting Up An Offshore Business

Setting Up An Offshore Business

There are numerous benefits to setting up a business offshore and we go through five of the major ones below.


  1. Lower Tax and Even Tax Exemption


Some countries and territories are business-friendly. They make it very easy for anyone to setup a company in those jurisdictions. In addition, they set very low corporate tax rates to determine business owners to choose them for their new companies.


If you want, you can seek for jurisdictions that allow tax exemption for overseas operations. Visit OffshoreCorpTalk to find out more. You may have to setup several companies to reap the full tax exemption benefits, but the effort will be well worth it. You’ll be able to run your business as usual, but without the need to pay tax on your overseas operations. Since you won’t have any operations in that specific jurisdiction, you won’t have to pay tax locally. How good is this? How is it even possible? The answer is that you can enjoy these benefits by setting up a business in an offshore jurisdiction that allows you to do this.


Hong Kong, for instance, is one of the jurisdictions that allow you to benefit from tax exemption for operations conducted outside HK.


  1. Boost Your Reputation Thanks To Your ‘Central Headquarters’


When you set up a business in Wyoming, USA, for instance, you’ll get a local mail address. This will automatically make your company a US-based organization. In some situations, having a US address for your business can lend it a boost of credibility and authority, regardless of the actual place you run your business from.


This can mean quite a lot for small, online-based businesses that seek for global customers but don’t have their headquarters in a reputable country or location. There’s nothing reputable about operating a global business from your garage or basement.


  1. Get Rid Of Cumbersome Paperwork And Conceal Your Identity


Should you set up your company in Belize, for example, you won’t have to provide an audited financial report on your operations. You’ll only need an internal financial report that’s not intended for tax purposes.


In addition, you can use an offshore company to conceal your identity. Registering an offshore company in Bulgaria, for example, allows you to keep shareholders and directors confidential. All you need to do is to appoint a nominee to represent you in all transactions of your company.


  1. Expand Your Business Overseas And Enjoy Effective Taxation


If you’re ready to take your small business to the global level, you’d be better off setting a company in a jurisdiction that allows you to sell in the regions you’re interested in. You’ll keep your operations legal while also optimizing your tax and your operational expenses.


For instance, if you want to sell to the EU market, you’ll need an Intra-Community VAT number. This is the legal way to do business within the EU. Unfortunately, the only way you can acquire this number is by setting up a business in one of the EU countries. Generally speaking, this is difficult, if not impossible. Nevertheless, Cyprus and Bulgaria are two exceptions to this rule. You can set up a company in one of these countries to get your Intra-Community VAT number. In addition, you’ll benefit from much lower tax rates. Bulgaria’s tax rate is 01%, the lowest in Europe. Cyprus has a 12.5% tax rate which is also quite good.


  1. Invest Your Excess Cash To Grow Your Business


This is rather stating the obvious. The less tax you pay, the higher your profit, and therefore the more cash you’ll have to invest into the growth of your business.


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