There are more than four dozen offshore jurisdictions in the world. How to choose the most suitable one for your business? First, you need to understand how offshore jurisdictions differ from each other.
Choosing the right offshore jurisdiction is best done with the help of experienced professionals. International Wealth experts will advise on international tax planning and provide support services to incorporate offshore company, as well as help you choose a foreign banking institution to open an account.
Differences between offshore jurisdictions
There are two main types of offshore jurisdictions with significant differences:
classic offshore zones
low tax jurisdictions.
The countries of the first group offer total exemption from taxes on commercial activities carried out outside the country by non-resident companies. Foreign companies are only required to pay an annual renewal fee.
The jurisdictions of the second group offer substantial tax incentives for certain types of activities carried out by non-resident companies.
Experts call certain countries classic offshore jurisdictions if they have a special regime for establishing business by foreigners. It consists of zero rates for the main corporate taxes with the obligation to conduct business only abroad.
The state treasury of classical offshore jurisdictions is replenished not with taxes but with state fees, which are taken for the registration of offshore companies and the annual renewal of their activities.
Other advantages provided by classic offshore jurisdictions include the following:
- confidentiality of personal data of beneficial owners
- no requirements to submit financial statements to regulatory authorities and audit the company
- no currency control.
The best offshore zones for opening a company
Our list includes cheapest countries to start a business with attractive tax conditions for foreigners.
So, the best offshore zones for opening a company in 2023:
- Belize – is a country in Central America. With a commitment to the continuous development of offshore financial services, the Belizean government is committed to complying with all OECD, FATF, and EU requirements. Due to this, the listed international organizations have recently excluded Belize from the blacklists of offshore companies. If earlier offshore IBC companies from Belize could only be non-residents, now foreigners have the right to register a company that will become a tax resident.
- Nevis – a small island of 83 square kilometers in the Caribbean Sea. It is part of the island nation of Saint Kitts and Nevis, which is popular among those wishing to acquire economic citizenship by investment. The jurisdiction applies English common law. A business registered in Nevis can easily access financial channels and raise capital due to the absence of currency controls in the jurisdiction. Nevis provides a stable political, economic, and trading environment for investors from all over the world.
- Seychelles – the Republic of Seychelles is a member of the British Commonwealth. It consists of 115 islands located in the Indian Ocean. Its official currency is the Seychellois Rupee, a freely convertible currency. Non-resident companies in Seychelles generally fall into two categories: International Business Companies (IBC) and Companies with Special Licenses (CSL). IBCs are more frequently registered and are a more popular and versatile type of organization for international business. Seychelles applies the International Business Companies Act, which offers favorable conditions for offshore company formation, business, and privacy protection for overseas businesspersons.
- British Virgin Islands – also a member of the British Commonwealth. This is a group of about 40 islands located in the Caribbean region, 25 minutes from Puerto Rico. The jurisdiction applies a legal system based on English Common Law (its Business Companies Act incorporates some terms from Delaware Law). Since a company in the British Virgin Islands offers its owners a high degree of privacy protection, local authorities require a minimum of information to register a business. The most popular legal form is Business Company BVI. It is not required to pay taxes and is tied with currency controls. Many multinational companies and wealthy individuals are turning to the BVI to register companies, making it one of the most popular places in the world to register offshore companies.
- Bermuda – a member of the British Overseas Territories, located in the North Atlantic Ocean. Bermuda has a British legal system, and its offshore insurance and reinsurance industry is the primary economic sector. An offshore company in Bermuda is an exempt company specially designed for foreign investors and is not subject to capital gains, value-added, sales, or gift tax. Companies in Bermuda are one of the traditionally permitted overseas jurisdictions to list on the Hong Kong Stock Exchange.
How to choose the perfect offshore jurisdiction for your business
By far, the best solution when registering an offshore business is to turn to experienced offshore industry experts such as International Wealth. Specialists will not only advise you on the choice of the optimal jurisdiction but will also take care of all the steps for registering a company, opening bank accounts, accounting, auditing, and others.
This approach will save you from the routine, many unnecessary problems, and additional costs.