Offshore Advisor: Make An Informed Choice Of Tax Haven Jurisdiction

Generally, choices are made on the basis of confidentiality, cost, ease of communication, complexity of the incorporation e.g. trusts, protected cell companies, resident companies or simple IBCs, and speed of response.

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There are different types of jurisdictions:

Well established, full service, expensive, can handle complex incorporations, require extensive Know Your Client due diligence, and are manned by very experienced professionals. e.g. Switzerland, Guernsey.

Full service, focused on international business companies, with experienced professionals, require extensive Know Your Client due diligence, but without the glamour of a Switzerland, but not so expensive. e.g. British Virgin Islands [BVI].

Established only in the last 15 years with extensive tax treaties with selected countries, less extensive KYC due diligence, can handle complex incorporations but have less experience than their European counterparts, are less formal and less expensive. e.g. Mauritius.

Established in the last 10 years, simple KYC documentation, focused on International Business Companies [IBC], have better confidentiality norms because are not so big and do not have disclosure treaties with the US or EU. e.g. Seychelles or Ras Al Khaimah [near Dubai].

A lot though depends on what you are going to use the company for! Below is a table that will help you reach your decision with the help of your offshore advisor.

Type	Full Service	Complex transactions	KYC complexity	Ease of Communication	Cost
Switzerland	Yes	Yes	High	High	High
Guernsey	Yes - focused on financial services	Yes	High	High	High
BVI	Yes but IBC focus	Yes	High	Medium	Medium
Mauritius	Yes. Focused on resident companies with tax treaties	Yes	Medium	Medium	Medium
Seychelles, Ras Al Khaimah	Focused on IBC	Medium	Low	Medium	Low

But which kind of company do you need? Do you want to invest in India or China or a specific country? Or is it for trading overseas? Or for some other purpose?

Why Incorporation	What Do I Need?
Type of Activity	Full Service?	Complex transactions?	KYC complexity?	Ease of Communication?	Cost
Professional Services	IBC only	No	No	Low	Low
Trading	IBC only	No	No	Low	Low
Investment	IBC or Tax treaty company depending on investment size	Maybe	Yes if tax treaty company	High	High
Holding	IBC or tax treaty company depending on country of investment	Yes, if large and investments into multiple countries	Yes	High	High
Dot Com	IBC only	No	No	Low	Low
Property Owning	IBC only	No	No	Low	Low
Shipping	IBC only - but choose a shipping jurisdiction e.g. Panama, Seychelles	No	Medium	Medium	Medium
Employment	IBC only	No	No	Low	Low
Intellectual Property & Royalty	IBC only	No	No	Low	Low
Asset Protection	IBC or Trusts	No if IBC. High if Trust	High	High	High
Will & Inheritance	Trusts	Yes	High	High	High
Multiple Investors in Projects	Protected Cell Companies	Yes	High	Medium	High

Making a choice with the help of your offshore advisor is dependent on various factors including anonymity. Mauritius and Seychelles have followed in Switzerland's footsteps and made it a criminal offense to disclose client information to anyone.

However, since 9/11, both the US and EU have put severe pressure on most of the popular jurisdictions to disclose information. British Virgin Islands [BVI] has signed a comprehensive treaty and Mauritius a watered down version. In any case Ras Al Khaimah, Seychelles and Mauritius are far enough away and not very important to either the EU or the US at this time.

As an offshore advisor I recommend Seychelles or Ras Al Khaimah for most of the simple cases and Mauritius for the more complicated requirements. However if you are more comfortable with the 'Old World' tax havens, then as an offshore advisor I recommend Switzerland for the complicated cases and BVI for the simple ones.

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