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How to Set Up an Offshore Company for 2021: 4 Steps to Go

Due to the epidemic, many clients are faced with a problem that they cannot choose which place is more suitable for them to set up an offshore company. This article is a detailed roadmap that supports every start-up or new offshore investor to save their time and resources. Please read below!

Thanks to many benefits, namely tax optimization, asset protection, or privacy, a large number of business investors have been increasingly flocking to offshore jurisdictions. Some common names that gain in popularity include the British Virgin Islands (BVI), The Cayman, Hong Kong and many more.

 

  1. Don’t Miss 3 Must-Do Steps in the Preparation Stage

Good preparation always makes good results! Below are 3 important steps to prepare for incorporating your offshore company:

You should understand based knowledge about an offshore company and its relevant issues so that you can minimize the potential of any wrong move.

 

2.Company Structure: IBC, Pte Ltd – Which to Choose?

Offshore company is a very broad term. Depending on the jurisdiction you have selected, the flexibility of the business structure you expect, and some other factors, the offshore service provider can suggest the best-suited type to make the most of your benefits.

Normally, there are 2 offshore company structures widely chosen by business players moving offshore.

 

Main Features of International Business Company/Business Company (IBC/BC)

  •  Allow the engagement in international business activities like trade or investment
  • Enjoy a very low tax rate (or be exempt from local corporate tax), if the IBC does not conduct business within the jurisdiction of incorporation
  • Offer fast incorporation
  • Offer banking and corporation privacy
  • Offer minimal reporting requirements
  • Require at least 1 director and 1 shareholder (both can be the same person)

Recommended offshore jurisdictions: Belize, BVI, Seychelles, Marshall Islands, UAE

Here is an example to let you explore more about this type: The BVI vs Cayman Islands: Which is better for offshore company

 

Main Features of Private Limited Company (Pte Ltd)

  • Be a type of privately held business entity with the number of shareholders not exceeding 50
  • Offer limited liability to shareholders
  • Can enter into contracts, acquire assets, sue or be sued under its own name
  • Enjoy low tax rates/tax exemption from income earned from outside
  • Restrict shareholders from publicly trading shares
  • Subject to more reporting requirements than that of IBCs

Recommended offshore jurisdictions: Hong Kong, Singapore

Want to gain insights into Hong Kong Pte Ltd? This article gets you covered: How to Get Hong Kong Offshore Profit Tax Exemption?

 

3.Decide on an Appropriate Offshore Jurisdiction

The offshore location is of an important impact on either advantages or challenges of your incorporated company in that place. There are a range of parameters that should be taken into considerations when making a decision.

Most importantly, offshore company jurisdiction should be an excellently tailored option that can meet your business needs. For example, if entrepreneurs are seeking for a reputed location with highly pro-business for foreigners to incorporate, they have tendency to think of Singapore or Hong Kong as first ideas.

The reputation can also reflect the offshore jurisdiction’s soundness and stability, which can result in the feeling of trustworthiness, and the potential of your business growth. It is advisable to look at its health of economy, politics, legal framework, and even corporate structures availability to know which country suits your business.

 

       4.How to set up an offshore company: Incorporation Procedure

The incorporation process for an offshore company can be enfolded in steps as the followings:
Select a company name
There are certain naming requirements for your company name to get approval from the competent authority which is commonly known as the Company Registry.

Fulfill KYC requirements
To curb illegitimate uses of offshore banking services, most banks need to carry out due diligence before accepting new clients.Please be advised that documents required to submit for your offshore company formation may be varied from jurisdiction to jurisdiction. However, in most cases, the basic documents for the customer verification that would be expected to submit are as the followings:

Basic documents for due diligence obligations:

  • A certified copy of your identification documents like passport
  • An original or certified copy of documents for your residential address verification
  • A detailed description of your company’s business activities

If your offshore company has one of its shareholders being a corporate body, then you must submit additional documents:

  • Certified copy of Incorporate Certificate or equivalent
  • Certified copy of Memorandum of Association
  • Certified copy of Registers of Directors and Members
Deliver documents to the Company Registry
Once you have done all the needed documents, please send them to the Company Registry of the offshore location that you opted for and proceed to register your company!

How to set up an offshore company is relatively straightforward and not complicated if you are fully aware of what you should prepare before to move, and what to do during the incorporation process.

Hiring an offshore service firm

like Elitestage is a wise solution

to your time and resources!

Any question, feel free to contact us.

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