Incorporating your business offshore isn’t as difficult as it might sound at first, and there are plenty of benefits to make it worth your time.
Many business owners choose to incorporate offshore and while it can be a process, it is also worth it for the benefits you receive. The ability to run your company without interference from the U.S. government is one excellent reason to set up an offshore business.
Other valid reasons for incorporating overseas include:
- Save on taxes
- Function without as many restrictions
- Remain anonymous
- Protect offshore assets
- Keep reports private
Any or all of these reasons can draw the business owner’s attention to the possibility of offshore incorporation. Once you’ve learned about the pros and cons of moving your business or starting it elsewhere, you just need to take the necessary steps to incorporate.
Pros and Cons of Offshore Business
Many companies reach the point where they need to expand and offshore incorporation can be a good start. It’s usually fairly easy to register in a foreign country that has opened its doors to the business world and the ability to work with agents makes it even simpler to complete your application.
The main problem with this type of business is the fact that you will usually not reside in the country that your business is registered in. While this rarely causes problems, it can be an issue in some cases, where you might be required to appear in person for the filing. This isn’t always practical, especially if you live far from the country where your business is incorporated. It’s usually best to stick to a place near your home country so you can easily travel if the need should arise.
It also takes some time to incorporate. Just how long depends on the country that you are applying to. Some countries have systems that function far slower than the U.S. so you should be prepared for the possibility of the entire process taking much longer. To find out how long, talk to others who have incorporated in the same country or ask your agent.
How to Incorporate Offshore
There are two ways to go about setting up your business overseas. The first is to do it yourself and the second is to hire a company to take care of everything for you. There are advantages to each of these choices, but both methods also have their downsides.
A company that does this on a regular basis will be well versed in the regulations in the most common countries. They will be able to get paperwork done quickly and easily and should be able to process everything faster than you would on your own. The downside is that this can be quite costly, which is why many companies do this themselves. However, you won’t need to travel to the country or do anything yourself, apart from provide the company information.
The steps to incorporate may vary slightly from country to country, but they usually follow similar guidelines:
- Fill out and sign an offshore company formation proposal for the country of your choice
- Check that your desired company name is unique (Name should include the type of business model, LLC, Corp, etc.)
- Fill in application forms
- Gather required documents
- Submit documents to registered agent to be checked
- Pay the fees (this process will vary from country to country)
- Receive your offshore company documents
In order to apply for offshore incorporation, you will need copies of the passports for the director and shareholders of the company. If the company is individually owned, then only the owner needs to submit a passport copy.
You’ll also need a reference letter from your bank and possibly proof of residence, though there are several countries which allow non-residents to set up accounts. You will need to check with the country in question before applying, to be sure of exactly what paperwork is required. There will also be different papers required depending on the business model used, whether you have gone with a sole proprietorship or a partnership, etc.
The Best Countries for Offshore Business
You have a few choices when it comes to incorporating offshore, but some countries are easier to work with than others. They offer fewer regulations and allow maximum privacy. These countries include:
- British Virgin Islands
- Cayman Islands
While there are a few other options, these are the safest and most private. You’ll find that most companies that offer incorporation aid will feature these countries and allow you to choose which one you want to work with. If you are doing everything yourself, you’ll want to choose a country that you can get to fairly easily.
In most cases, it is easiest to go through an agent or company that has the ability to speed up the process and ensure that it all goes smoothly. You can complete much of the process on your own, gathering the correct documents and ensuring that everything is in order.