This is part of our Pillar Content of Flag Theory™ where we detail how you can take a well proven strategy for protecting and growing your self and your wealth apply it. The strategy is comprised of 7 flags, and Offshore Company is the 3rd flag.
As a quick overview, here are some benefits of offshore companies:
- Ability to open a corporate bank account
- No taxes at a corporate level
- Privacy (for both directors and shareholders)
- Strong asset protection
- Professional appearance
- Debts, assets, licenses, contracts can be made or held by the legal entity
- Liability is limited, and you distanced from the actions of your business
Incorporate a company is a prerequisite for any serious business.
Going offshore, you can also experience these benefits:
- Banking/investment opportunities otherwise not available
- Planting a flag in a strategic jurisdiction
- Mitigation of sovereign risk
- Protection from bankruptcy, lawsuits, divorce, civil unrest, and other ‘worst case scenarios‘
- Access to higher risk merchant accounts
- Access to funding or investment capital
It should be obvious that there are tremendous advantages for entrepreneurs who have incorporated, either an onshore or offshore company.
Some legal entities can even lead to passports or citizenship – A Singapore, for example, is one such jurisdiction which allows for residency and eventual citizenship for individuals who set up a company there.
Not every jurisdiction was built the same
Hong Kong, for example, has a yearly audit requirement, something you might not want to deal with. Singapore is great for someone sourcing physical goods, but their requirement of a local director makes it an expensive option.
Incorporation and passports is my business, and every day I’m on the phone with:
- Entrepreneurs who need to incorporate a company, 2nd passport, or offshore bank account
- Service providers across the globe who provide me with a wholesale discount
- Lawyers, accountants, agents and bankers with boots on the ground information
The Best Corporate Structure For Your Business
Whether you are sourcing physical goods from Shenzhen, coding in Berlin, setting up niche sites in Cebu, or writing copy in Medellin, you can use our tools to find out the best place where you should incorporate.
Here is a free tool we made to examine your worldwide options for setting up companies side by side.
Here are some starting options for setting up an offshore company and where you can read more:
There are also some other places where setting up a company can grant you special benefits, such as residency, and in some cases even a new passport. All from starting companies:
How much does it cost to Incorporate?
Short answer: it costs more to get it wrong! If you incorporate in the wrong state in the US (i.e. Florida) and you are the sole owner, you won’t have single member charging order protection – which means that the creditor can easily pierce the corporate veil – simply by nature of you running your own business! And, they can liquidate your assets to pay off creditors. This has happened, and it will happen again, don’t let it happen to you. If you incorporate in Florida, you could literally lose every asset you own (besides your house, which will be protected under a law called the homestead exemption) and pay high tax, but what about if you are smart enough to set up offshore?
Some jurisdictions have hidden costs. A Private Limited Company in Singapore, for instance, requires a local director which can cost $3000 per year, with a $10,000 deposit, and if you want to wind up a company (hey, it happens, not every business works out) it can easily cost you $5000 by the time you get done paying the secretary to get your accounts current with the tax man and you post the mandatory advertisement in the local papers. If a creditor contacts you, you have to start the whole process again. This can easily cost $15,000.
This is our main line of business and it’s what we do on a regular basis for customers. Contact us, we look forward to doing business with you.
If you want to simply learn more, here are some articles:
- Where can I compare jurisdictions to incorporate my company? – Incorporations.IO
- I’m a location Independent Entrepreneur – Where Should I Plant a Company Flag?
- Asset Protection for the Internet Entrepreneur
- Why Incorporate Your Business In Hong Kong?
- Going offshore: Tax Free Company in Paradise
- The real story about Americans going offshore
- Incorporate in Vietnam: How form a Limited Liability Company?
- Tax Free in Philippines
- Is your corporation really tax free?
- Cook Islands Trusts
Large corporations and multinational companies understand the importance of corporate structure because this can have a powerful impact on the bottom line.
The media confounds and exacerbates the problem by publishing misinformation. They have created a label that anything “offshore” means something illegal or is about evading tax. This is a means of scare tactics that confounds the truth of the situation: forming international companies is completely legal, effective, and in many cases, essential.