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Basic information about offshore companies
ESTABLISHMENT AND ADMINISTRATION OF OFFSHORE COMPANIES
Like companies registered in a continental jurisdiction, also offshore companies
registered in an offshore location must fulfil a number of minimum legislation
requirements. In any case they must have a local representative
(registration agent - we provide as a standard)
- keep their registered office in the country in question (we provide as
a standard)
- must issue and settle a certain minimum amount of the registered capital
- must have a shareholder and statutory representative (shareholders and
directors - we provide as a standard)
- settle the lump-sum tax to the government or the percentage tax on profit
or turnover.
COMPANY ESTABLISHMENT AND LOCAL REPRESENTATIVES
After discussing all the requirements with the client, we will select a
suitable location and we will adapt all to your requirements, and we will
proceed with the company establishment in the country in question.
In most locations it is possible to establish a company in a very short
time. If you require an older company, it is possible to choose from
the list of our pre-registered "shelf" companies ready for use,
some of which being several years old.
Each offshore company must have a representative in the country in question,
who represents it before local authorities. We provide this service automatically
in all offshore jurisdictions and is charged as an annual lump-sum. (see
our price list of services).
REGISTERED OFFICE OF THE
COMPANY
Every offshore jurisdiction requires the company to have its registered
office in the country which is the subject matter of the formation of the
offshore company. Of course, you can lease your own registered office, but
an overwhelming majority of clients prefer our offices or offices of our
partners in the countries in question, at the addresses of which we establish
offshore companies. We establish a company there and we will also provide
it with our registered office for the delivery of possible correspondence.
The price for the lease of the registered office provided this way is charged
as an annual lump-sum amount. (See the price list of services).
OBJECT OF COMPANY BUSINESS
With some slight exceptions, offshore companies can perform all legitimate
business activities which the company founders or company "operators"
will select as legitimate business objectives of the company. Business objectives
may be formed, without limitation to, by the following activities:
- selling, buying, exchanging, donating goods or services
- capital expenditures, borrowing, keeping deposits or any assets
- opening and managing bank accounts
- performing consultations, advisory services and other services to third
entities
- buying immovable and movable assets
- etc.
In general terms, it is possible to state that an offshore company may operate
all activities except for:
- Bank activities
- insurance companies
- trust activities (Trust Deeds, trustees, etc.)
- providing its registered office to other companies
- operating lotteries or Internet casino or betting games
REGISTERED
CAPITAL OF THE COMPANY
In a number of jurisdictions, the company to be established shall pay up
a part or even the entire registered capital. Offshore companies which are
established in the countries with Anglo-Saxon law (de facto an overwhelming
majority of offshore jurisdictions), are subject to paying up only a very
low part of their registered capital, which is very often one dollar only
(one share with a face value of one dollar).
That is why a company which is established e.g. in Grenada and has registered
capital amounting to USD 5,000,000.-, which represents 5,000,000 shares
by USD 1.-, can issue only one share against payment of USD 1.-. The registered
capital of the company is USD 5,000,000.-, it is true, but the paid-up capital
is USD 1.- only. There is not even any requirement on the paying up of the
registered capital in the future unless the client voluntary wishes otherwise.
A similar situation can be registered in other jurisdictions as well, where
one share is issued against payment of USD 1.-, or a sum in a similar amount.
The amount of the registered capital may be subject to higher lump-sum taxes
which stand for the well-known percentage tax. Thus it is not any problem
to establish, in British Virgin Islands, a joint stock company with registered
capital of 500 million American dollars (it is possible to pay up only one
share at a face value of USD 1.-) and to act as a major and strong investment
or capital company, you will only pay higher lump-sum taxes.
There are, of course, also jurisdictions where it is necessary to pay up
a greater part or even the entire registered capital of the company, such
as Switzerland, Liechtenstein, Luxembourg, Britain, Hungary or Cyprus.
The registered capital of the company is formed, in a majority of cases
by a certain number of shares in a nominal value which expresses the amount
of the registered capital. In accordance with your requirements we are able
to arrange for everything in such a manner that your offshore company could
issue some of the below specified types of shares (this applies in general
terms):
- Priority shares
- Registered shares
- Bearer shares
- Shares with voting rights or without them
- Shares without a nominal value or with a nominal value
- employee shares
- etc.
The type of shares and the amount of the registered capital are an important
tool during establishment and formation of an offshore company. That is
why it is suitable to discuss these issues with our consultants in advance
and to ask about all possibilities.
If the client does not impose any specific requirements, we will establish
a company with such an amount of the registered capital that the formation
of the company can be as available as possible from the financial point
of view.
DIRECTORS, SHAREHOLDERS AND NOMINEE SERVICES
An overwhelming majority of jurisdictions require that the companies will
be managed by at least one Company Secretary (Director) and that they will
be owned by at least one shareholder.
Some jurisdictions make it possible that the statutory representative (director)
can be a natural person or legal entity, whether the domicile of such a
person or entity is in the country in question or not.
Shareholder may also be, depending on the type of jurisdiction where the
company is formed, a natural person or a legal entity.
The offshore locations in Caribbean Islands, Central America and in the
Pacific region have special laws which place emphasis on the keeping of
anonymity and confidentiality. Even though the lists of directors and shareholders
must be available at the registered office of the registration agent in
a majority of jurisdiction, this data is not available to third parties,
to the public and often they are not available to governments of foreign
countries either (and thus to tax inspection authorities). Any disclosure
of this data concerning the owners of the company to third parties are generally
subject to significant financial penalties as well as to imprisonment for
several years without suspension.
There are also locations which are advantaged from the tax point of view,
under certain circumstances (Wyoming, Nevada, Luxembourg, Switzerland, Hungary,
etc.), but their companies registers are publicly available, and founders,
directors or shareholders cannot stay in anonymity. In these cases (and
also in other cases) it is possible to use services known as Nominee Services.
For an annual lump-sum amount our company will provide you with the appropriate
number of directors and shareholders who will be involved in the establishment
of the company, although the real founder and user are only you or your
company.
At first sight it could seem that it is not necessary to make use of Nominee
Services for locations which offer maximum anonymity and confidentiality
and where there is no threat of disclosure of confidential information about
the founders or users of the companies because the companies register is
not open to the public.
There are, however, a number of circumstances which require that somebody
can act on behalf of the company. This may concern the signing of contracts,
invoices, consignment notes, orders, issuance of power of attorneys, decrees
and regulations, or a wide range of other circumstances to which it is not
just the optimum thing to add your name and signature on the documents of
the company which is used by you for tax planning purposes.
The statutory representative appointed formally this way (director) acts
on behalf of the company EXCLUSIVELY in accordance with the client's (beneficiary's)
instructions, or in accordance with instructions issued by the persons who
were authorised to do so by the client at our company.
A formally appointed statutory representative within the framework of Nominee
Services DOES NOT HAVE access to bank accounts and DOES NOT HAVE any signing
right to bank accounts of the offshore company either, and cannot handle
the assets of the company.
The entire contractual relation for the providing of the Nominee Services
is legally treated through a contract concluded by and between our company,
director (shareholder) and client, including the letter of resignation from
the posts, pre-signed by the director (this contract is known as Deed of
Trust).
If you have questions about offshore companies please contact us.
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