It is extremely likely that you will be using a company formation agent to take care of all your paperwork when you opt to move your company abroad. However, if you need to know about the numerous procedures carried out by these agents then here is what happens after you have signed.
Everything below is a general description of what occurs in the process. It may differ between each tax haven. First of all let’s figure how long it will take to set up a company offshore. Well, that all depends on the country in question but it mainly varies from one week to a month.
How much does it cost?
Firstly, as you all know the price will fluctuate dependent on what incorporation agent you use and the offshore tax haven you select. The price is very contrasting, for example it could be ranging from £500 to £3000.
Therefore it is paramount you know which one is best suited for your company. Pricing between firms is not always consistent and you need to be aware of sharks out there, who charge much higher than is needed.
This is all about selecting which country you are going to settle your offshore company. You will need to research each country appropriately and come to the conclusion which one is most suitable for your business type and what haven can offer the most to you and your business.
Here you should consider:
• Income tax
• Profit tax
• Local tax
• Ongoing costs
Now you have selected where you want to situate your offshore company, it is now time to select a name for the business. Here you will pretty much have a choice of anything, but make sure it is not taken and is well accepted in the place in which you choose to settle your offshore company. The offshore formation agent will help you with such a matter.
Now you must think about what kind of business entity you would like your business to be. Many offshore jurisdictions have various forms of IBC companies. For instance there are nonresident companies, holding companies or LLPS.
Articles of association must be drafted. This is all legislation that allows you to operate the company and it is often provided by a company formation agent as standard procedure. It may be best to come with a customized paper prior to the meeting, just to make sure everything is covered.
Here we get to the financials. Ensure you have capital investment to be injected into the offshore company and also think about share capital as the method of funding. From the start you may need to transfer money into the new account. Finances are often raised by one of two ways, either take out a loan or use share capital.
There are many types of shares which are also known as classes of share. These are issued by a company and you will need to decide what shares your business will issue.
Here are the different shares:
Bearer shares – These are shares that give a holder of a share a right of ownership. A great benefit with these shares is complete privacy of who actually owns the shares. This anonymity is ideal when trying to start an offshore company, as you want to minimize your tax as much as possible.
A wide range of jurisdictions permit such shares, such as:
• The British Virgin Islands
• The Bahamas
Preference shares – this gives a bearer the fixed dividend receipt.
Class A & B shares – Different classes allows you to give different rights and benefits to each group of share holders.
Now you have decided what shares to use. It is now paramount to select who will be the board of directors. The minimum required is dependent on the selected jurisdiction, therefore it is important to research each offshore tax haven.
Offshore formation agents will try and make sure you use them for this service. However, it is important to remember they charge extra for this and get ownership of your offshore company. Lastly, if you do allow someone to be chief shareholder you need to ensure they are not UK resident so they can avoid the tax provisions.
This post was brought to you by offshore.a1companies.com. They specialize in providing offshore companies with havens to set up their new business. For more information regarding this, please visit the link.