Top Offshore Incorporation: Make An Informed Choice Of Tax Haven Juridsiction
How will you know which is the t
How will you know which is the top offshore incorporation tax haven jurisdiction for you? Why would you need an offshore company? And how would you choose a tax haven?
Generally top offshore 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.
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
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 for your top offshore jurisdiction.
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
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 another reason?
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
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 for your top offshore jurisdiction is dependent on various factors as also 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 water down version. In any case both Seychelles and Mauritius are far enough away and not very important to either the EU or the US at this time.
I recommend Seychelles as the top offshore jurisdiction 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 the top offshore jurisdictions are Switzerland for the complicated cases and BVI for the simple ones.
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