When selecting some service online what is the first thing we pay attention to? Yes, exactly, company origin. When some new online payment system appears, what do we check first of all? Yes, registration. So, in any case those few lines of address play a great role for us, and we perceive them as a key factor determining our choice. However, when choosing some product, e.g., a pack of milk in supermarket we tie the country of the manufacturer with some quality level and make purchases basing on it. But then it comes to some internet financial service we in most cases find some obscure names and addresses in some unknown countries, widely known as offshore countries. So, why are those countries are so attractive for the online businesses? Why do they need it? And how much does it cost to run business in some exotic country?
First of all let’s go to the term “offshore business” itself. According to encyclopedia offshore company is a company which is incorporated outside the jurisdiction of its primary operations. There are three characteristics of offshore companies:
• it should be incorporated under the offshore companies regulations of relevant offshore jurisdictions.
• it should be incorporated by incoporators outside the offshore jurisdiction where it is incorporated.
• it should not conduct substantial business within the offshore jurisdiction where it is incorporated.
Today there is a great number of territories have officially a status of the offshore zone: Andorra, Anguilla, Antigua, Aruba, Bahamas, Bahrain, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Djibouti, Dominica, Dublin, Ghana, Grenada, Guam, Guernsey, Hong Kong, Isle of Man, Israel, Japan, Jersey, Labuan, Malaysia, Lebanon, Liechtenstein, Luxembourg, Macau, Malta, Marianas, Marshall Islands, Mauritius, Micronesia, Montserrat, Nauru, Netherlands Antilles, Niue, Palau, Panama, Philippines, Puerto Rico, Samoa, the Seychelles, Singapore, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Switzerland, Tahiti, Tangier, Thailand, Turks and Caicos, Uruguay, Vanuatu and the United States (particularly, Delaware, but some other states have offshore characteristics).
The main advantage of offshore companies is easiness of running the business. The benefits of offshore companies are evident: easiness of business set up, low taxation, loyal laws and protection of the foreign jurisdiction. Such form of business became a real heaven for the organizations and especially for financial institutions such as online payment systems. Being protected by the law of some offshore country such companies can operate worldwide without any fear of being prosecuted.
So, how to open a company in offshore? Actually it is not a long procedure. You needn’t to go to any exotic country and to speak to local agencies in their language to get the desired address. Today it is enough just to open your favorite browser, choose one of the numerous companies dealing with registration in offshore jurisdictions, select the offshore country you like and contact the registering company. What happens later is not your trouble since the company will do everything itself.
Today the most popular offshore jurisdictions are Panama, the Seychelles, Costa Rica, Singapore, Switzerland, Belize, Cyprus, Hong Kong, USA Delaware and others. Every customer has his or her own preferences and the choice of the jurisdiction depends solely on the consumer, since only he/she knows what will be the best for their business.
What about the registering companies? As we have already stated today there is a great number of companies providing services in the sphere of offshore business registrations. One of such companies is CSR-corporation offering registration and formation of offshore companies in all reputable jurisdictions. The company offers a full rage of services starting from consultations and ending with additional services to your company, such as virtual office and etc. Besides CSR today we can see significant activity of such companies as OCRA, SeychellesOffshore, FletcherKennedy, and others. Actually all of them have almost the same range of services, however the prices varies.
Usually the formation of offshore company is performed as follows:
If you are a newbie and do not anything it would be better for you to address the company advisors. They, knowing the offshore jurisdictions to a nicety will help you to find the best jurisdiction for your business, including money aspects.
Having chosen the company you need to make a written request, or order the company. Usually companies provide ready made forms and you will need just to complete them and indicate such key factors as prices, services and terms, and your precise contact details. Also, here you can choose where to select from the list of ready-made companies or to create a new one. Actually all the companies have that list of ready-made companies. Those ready-made companies are the same companies that have already been created but have the so-called “open” configuration, and are to be finalized in accordance with client’s requirements. Having made an order you need to wait for a while to let the company staff to process your order. Usually this procedure takes up to one business week however, the terms depend on the company.
After completion of your order processing the company will address you for payment. Here, advance payment is a usual thing and not a single company will work under other terms and conditions. The only exception is the regular customers. For payments the companies send the invoices and there specify all the payment options available. Usually payments are made via bank transfers, or credit cards. However, the latter ones are not so popular along with the online payment systems.
The prices of the companies range. First of all they depend on the company type, jurisdiction chosen, additional services and the registering company itself. Usually the prices for the whole registration start from $600, the upper level is determined by the customer. However it rarely exceeds 10-12 thousand USD. The most common price is about $1,000. However, some companies offer special suites which include various services and provide some discount. So, for example, SeychellesOffshore offers its clients wishing to open business in the Seychelles Premium Incorporation Package for $999 which includes all the fees, preparation of all documents, legalization, provision of a corporate nominee director and shareholder, registration of office and provision of Registered Agent, delivery cost. CRS corporation offers to register your company in the Seychelles just for 680 Euro.
Once the payment is accepted the registering company starts fulfilling its obligations. The registrar collects the necessary papers (in addition to the papers provided by you), files them to the appropriate government bodies and pays all the necessary fees and capital duties.
Usually such procedure lasts 1-10 business days, sometimes longer. The period needed for company formation depends on the created company itself. Sometimes, especially if it comes to some financial institutions it is necessary to pass several certifications and verifications which are carried by various bodies, hence the registration and company approvals may be drawn out.
After obtaining the necessary approvals and passing the certifications the registrar sends you by a regular mail or courier all the documents confirming your authority and legality of the company.
And… our congratulations! You’ve become the owner of the offshore business with all its benefits and advantages. Now you can run your business and get great profits from it however you should keep in mind that some jurisdictions such as the Seychelles, for instance, demand paying annual renewal fees. However it doesn’t mean that you will be required to pay the whole amount you paid to get the registration. It usually varies from $500 – $3000 depending on company type and jurisdiction. Non-payment of those fees results in annulment of the registration and loss of the offshore registered company status. Though usually government thinks of its “businessmen” who usually busy and sometimes forget paying their taxes and fees and changes them together with your professional fees.
And if the government of the offshore cares about you, why not to care about yourself and make your company even more profitable by lowering your taxes and obtaining more freedom in business? Of course, offshore businesses have such disadvantages as impossibility to make deals with the local companies. But actually having refused servicing the population of Panama, for example, you open new horizons and eliminate the borders of all the countries worldwide. And it makes sense to consider…
Related posts: