Over the years I’ve come to realize that there’s no escaping financial and economic regulation. These regulations hinder business performance in multiple ways including but not limited to high costs of operations, taxes or restricted access to business opportunities. It’s up to you as an entrepreneur to see how you can side-step regulations to create favourable business opportunities. Despite the inevitability of dealing with regulation, some business environments are easier to navigate than others and this is where we come to the advantages of going offshore. Hence the question, how can I benefit from offshore incorporation?
The United States is downright oppressive for businesses since the governments charge taxes as high as 21% and the labour markets are expensive (wages rose by 3.2% last quarter). Additionally, with the recent trade wars between the US and China, business owners find it difficult to make lucrative profits like they used to. In light of these considerations, incorporating offshore can help you avoid many of these obstacles while also improving business potentials.
This article discusses the many advantages of incorporating offshore.
How Does Offshore Incorporation Work?
Every state has a different set of laws that apply to individuals and corporations, respectively. For all intents and purposes, a corporation is equally as much a citizen of the state than any individual. Some countries give corporations much more leeway in terms of taxation or subsidies than others, while others can be stifling for business. The good news is that just because you’re a citizen of a certain state, your businesses don’t necessarily have to be.
If you set up the business with lax taxation laws like Vanuatu, you’ll virtually pay 0% corporate taxes and all your profits will come back tax-free. You can reinvest higher profits back into the company or take a larger salary to create a better financial cushion. Similarly, if you set up a corporation in Switzerland or in Germany, you can benefit from greater financial privacy and find more business opportunities. Offshore incorporation offers advantages that your home country might not.
Advantages Of Offshore Incorporation
There is no set number or types of advantages of offshore incorporation’s, each location around the world offers different benefits that you could capitalize on. I’ll speak about some of the common advantages that business owners look for when incorporating offshore.
1. Lower Tax Rates
Countries like Vanuatu, Cayman Islands or Belize charge no corporate taxes on any income-generating across borders. Vanuatu, specifically, is an officially recognized tax haven that officially charges 0% corporation tax on offshore companies. Many people come to me saying that they’ll have to shift their operations to Vanuatu before they can take advantage of the tax rates, but that’s a mistake. All you need is a headquarter in Vanuatu that establishes your business as native to the country.
You could set up operations in essentially any country in the world and sell your goods or services there but the governments in those countries can’t touch your money. Beyond the tariffs or duties that you might have to pay, the revenue is treated as the property of The Republic of Vanuatu and subjected to its laws. Although you might have to pay some of the taxes charged by the government in the country of operation, the cumulative tax effect is much lower.
2. Specialist Financial Services
Countries like Singapore are known throughout the world for their expertise in financial management and planning. All business owners realize the importance of generating multiple streams of incomes to help sustain the organization and their personal finances and setting up shop in Singapore can help develop generate greater revenue. Once your corporation is registered in a country like Singapore, you could hand over its financial portfolios to the consultants in the country. With the financial expertise of Singaporean consultants backing your financial strategies, you’ll grow your business beyond all expected potentials.
Many business owners also value their financial privacy and find it difficult to maintain it. Swiss banks are widely known for their specialist financial privacy services and you could take advantage of these as well. If your company is registered in Switzerland, you can continue siphoning money into those accounts to make sure your wealth is effectively invulnerable to an investigation or any form of interference.
3. Potential Business Opportunities
The real estate markets in Asia and the Pacific are the fastest growing industries in the world and most of the world’s teak trade is shifting to South-Central America. As a business owner in North America or Europe, you probably can’t get in on the action to help improve your financial standing. For whatever reasons, most of which are probably logistical or legal in nature, you can’t access far off markets which probably present very lucrative business opportunities.
Relocation to a suitable offshore location might get you access to these new business opportunities to diversify as a business and make more money than ever before.
4. Potential For Dual Citizenship
Vanuatu, Panama and Nicaragua award investors with dual citizenship if they invest a minimum amount of funds in select industries. Vanuatu incentivizes investments in tourism real estate like hotels or resorts while Panama and Nicaragua welcome investments in forestry. These three countries aren’t the only options of course, you can also consider investing in the Cypriot shipping sector for a passport. Offshore incorporation can open a path to a dual nationality as well as great profits.
5. Greater Profits And Revenues
Each of these advantages ultimately culminates in greater financial opportunities. With lower tax rates, access to better financial conditions, business opportunities and dual citizenship you can create a financial legacy that many will remember for generations. Going offshore is a simple enough task that yields greater financial gains that help set you up to live life on your own terms.
Here are a number of articles on offshore incorporation, enjoy!
When you are ready to talk to someone about Offshore Tax Services, please contact us HERE
And our guide among guides: The Ultimate Guide to Going Offshore. The information here is amazing and you will want to download a copy for your personal library.
It is part of being a perpetual traveller that you follow the prescriptions of the flag theory. Going offshore helps you meet many of the standards set by the Flag Theory to help you attain financial and economic liberty, that it free from any government oppression. There are plenty of offshore locations around the world that you can choose from to help set you up comfortably for a very long time.
I hope you enjoyed this article on how you can benefit from offshore incorporation.
About The Author
Mikkel Thorup is the host of The Expat Money Show podcast and the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran.
His goal is to help Expats like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.