An offshore company is in simple terms. Offshore zone
In connection with the fight against tax evasion, which is covered in Lately Media, many have learned about the existence of offshore, offshore countries and zones. With this specific information about, "What are offshore countries?" catastrophically lacking. Today we will look at what offshore countries are, where offshore countries are located and why businesses need them.
Thanks to this article, you will understand the following topics:
What are offshore countries?
Offshore countries are those states that offer special conditions for business. To be correct to the end, the term "offshore countries" is inaccurate. The term "offshore jurisdictions" is more appropriate. This is because not only a whole state, say, but also a part of the state - a state in the USA can be called offshore.
Another definition of an offshore country is when a state or jurisdiction is included in the list of offshores of an international organization or another country. For example, Russia considers Liechtenstein offshore, while the EU does not.
Offshore countries and jurisdictions offer special business conditions for foreign entrepreneurs and investors. The most common advantages of offshore countries, which are prescribed in the legislation, are the following:
- Simple and fast procedure for registering a new company;
- Simplified reporting system;
- No need for an audit;
- Reduced taxes;
- Additional protection from creditors, fraudsters and competitors;
- Flexible legislation that allows you to customize your company for specific tasks;
- Increased protection of personal information of owners and directors;
- Access to new markets and financial instruments;
- Much more.
Offshore business and offshore company
An offshore company is considered if it is registered in an offshore country according to the rules for offshore (international, non-resident) companies.
An offshore company may have owners, shareholders, directors, secretaries and other managers. This is determined by the laws of a particular jurisdiction and the type of company chosen: IBC, LLC.
Any modern offshore company, in order to benefit its owner, as well as not involve unnecessary risks, must meet several criteria:
- Registered and legally registered;
- Has a real presence: an office, employees, or at least a working site, server, etc. at the place of registration.
Real presence orsubstance is an extremely important point in modern world. "Paper" offshore companies, which existed only on paper, are today considered as a method of fraud and tax evasion. Only if the company can prove its real activity, it can be used in the international structure and asset protection.
- Leads, which is required by law;
- Engaged in legal activities and has the necessary licenses for this.
It is important to understand that an offshore company is not a magic box that will hide dirty deeds and help launder money or deceive a client. The times when this was possible have passed or are rapidly passing. Companies, their accounts and activities are closely monitored by the law enforcement agencies of the world.
The old schemes that allowed you to evade taxes or hide the face of the true owner no longer work. New schemes are aimed at ensuring safety, protection, reputation, but not at all about deceiving the authorities.
Why then do we need offshore companies in offshore countries?
Why you need an offshore company
An offshore company is a tool that solves certain problems. The list of tasks depends on you and your business. At the same time, any offshore country has its own nuances and peculiarities. In other words, there is no one single offshore company that will solve any kind of problems.
If you want to open a bank, then you need a jurisdiction that issues banking licenses, for example, . If you plan to engage in online gambling, then pay attention to and.
If your task is to protect assets from fraudsters and competitors, look at companies and - these two states leave little chance for those who are used to taking other people's assets, including through the courts. The legislation of these countries is spelled out in such a way that decisions of foreign courts are not accepted here, and in order to start office work in Belize or Nevis, you must first deposit $ 25,000 to the cashier.
If you are looking for a place to register a ship, aircraft or helicopter, then there is a choice:, and others.
If you are interested in a good reputation, access to a skilled workforce and the European market, create companies in , on .
In addition, pay attention to how and where you are going to accept payments. In other words, where should you have a bank account. As practice shows, opening a bank account is many times more difficult than opening an offshore company. We recommend that before buying offshore, sign up for and find out if you can open an account in the right bank together with the planned offshore company: [email protected].
List of offshore countries
The list of offshore countries is an ambiguous thing. The point is how to define offshore. In fact, today almost all states have offshore elements in their laws for foreign investors. The US is in many ways a much more important and larger offshore than St. Kitts and Nevis, and the UK is generally the head of half of the world's offshores, which are called “British offshores”.
Therefore, the list of offshore companies usually consists of either international organizations, or regulatory authorities responsible for taxes or business. In Russia, the “list of offshore companies” is compiled by the Federal Tax Service and currently includes 107 countries and 18 territories.
The OECD has its own list, as does the IMF.
List of offshore FTS
1. Angola |
2. Andorra |
3. Antigua and Barbuda |
4. Afghanistan |
5. Bahamas |
6. Bangladesh |
7. Barbados |
8. Bahrain |
9. Belize |
10. Benin |
11. Bolivia, Plurinational State of |
12. Bosnia and Herzegovina |
13. Brazil |
14. Brunei - Darussalam |
15. Burkina Faso |
16. Burundi |
17. Bhutan |
18. Vanuatu |
19. Gabon |
20. Haiti |
21. Guyana |
22. Gambia |
23. Ghana |
24. Guatemala |
25. Guinea |
26. Guinea-Bissau |
27. Honduras |
28. Grenada |
29. Djibouti |
30. Dominica |
31. Dominican Republic |
32. Zambia |
33. Zimbabwe |
34. Jordan |
35. Iraq |
36. Yemen |
37. Cape Verde |
38. Cambodia |
39. Cameroon |
40. Kenya |
41. Kiribati |
42. Colombia |
43. Comoros |
44. Congo |
45. Costa Rica |
46. Ivory Coast |
47. Lao People's Democratic Republic |
48. Lesotho |
49. Liberia |
50. Liechtenstein |
51. Mauritania |
52. Madagascar |
53. Malawi |
54. Maldives |
55. Marshall Islands |
56. Micronesia, Federated States |
57. Mozambique |
58. Monaco |
59. Myanmar |
60. Nauru |
61. Nepal |
62. Niger |
63. Nigeria |
64. Nicaragua |
65. United Arab Emirates |
66. Oman |
67. Pakistan |
68. Palau |
69. Palestine, State |
70. Panama |
71. Papua New Guinea |
72. Paraguay |
73. Peru |
74. Rwanda |
75. Samoa |
76. San Marino |
77. Sao Tome and Principe |
78. Swaziland |
79. Seychelles |
80. Senegal |
81. Saint Vincent and the Grenadines |
82. Saint Kitts and Nevis |
83. Saint Lucia |
84. Solomon Islands |
85. Somalia |
86. Sudan |
87. Suriname |
88. Sierra Leone |
89. Tanzania, United Republic |
90. Timor-Leste |
91. Togo |
92. Tonga |
93. Trinidad and Tobago |
94. Tuvalu |
95. Tunisia |
96. Uganda |
97. Uruguay |
98. Fiji |
99. Central African Republic |
100. Chad |
101. Ecuador |
102. Equatorial Guinea |
103. El Salvador |
104. Eritrea |
105. Ethiopia |
106. South Sudan |
107. Jamaica |
TERRITORIES |
1. Anguilla |
2. Virgin Islands, US |
3. Gibraltar |
4. Greenland |
5. Guam |
6. Macau |
7 Comoros: Anjouan Island |
8 Malaysia: Labuan Island |
9. Montserrat |
10. Curacao |
11. Niue |
12. Puerto Rico |
13. Cook Islands |
14. Turks and Caicos Islands |
15. Separate administrative divisions of the United Kingdom of Great Britain and Northern Ireland: Isle of Man and Channel Islands (Guernsey, Jersey, Sark, Alderney) |
16. Saint-Martin (Dutch part) |
17. Taiwan (China) |
18. Faroe Islands |
Only 6 countries remain on the EU offshore blacklist: Guam, Namibia, American Samoa, Samoa, Palau, and Trinidad and Tobago. A few dozen more in gray - this means that they have a chance to get into both the "white" and the black list, depending on the implementation of EU requirements.
It is worth noting the following: a black list does not mean “forbidden”. This means that transactions with this state are considered with a little more care. In addition, the lists are constantly changing due to new bilateral agreements.
How to open a company in an offshore country
In order to open a company in an offshore country, we recommend that you follow the following algorithm:
- The first step is to understand what you want to achieve with a company in an offshore country: asset protection, search for new clients, agreements with a foreign partner, tax incentives;
- Then you should seek advice from the specialists of our portal [email protected] and sign up for a free consultation on selecting a bank account (especially if you plan to run an active business or any activity where payment is required);
- Depending on your goals and clients' location, we will advise you where to open an account and which offshore jurisdiction is right for you;
- Determine the necessary Additional services(open an account, hire a nominee service or);
- Prepare documents:
- Translated and certified copies of the passports of the beneficiary and directors;
- Proof of residential address (utility bill);
- If the documents are in order, then pay for the company registration services using a card, bank transfer, WebMoney, WesternUnion, etc.
- Wait for the company registration documents, send the originals of the documents indicated by us;
- Start using a company in an offshore country.
offshore(also offshore or offshore company ) is a certain territory of the country, or a country as a whole with favorable conditions for doing business for foreign citizens (non-residents) in relation to this country.
Description of offshore in simple words
In simple terms, these are foreign countries or their states where you can open a company or do business without paying any taxes and fees.
Among these favorable conditions are low or no tax rates, simplified reporting and document management, the ability to hide the owners of a particular company. Therefore, offshore companies can also be used by scammers, including for transferring money, which subsequently will be simply impossible to find.
History of occurrence
The very first offshore in history was seen in the US in the 1950s. Then one of the enterprises that the US government wanted to see on its territory and receive tax payments from it, the owners registered in another country with low tax rates.
Among economists there is no clear definition of offshore. Some associate the term with geographic location one or another company in relation to the place of residence of the owner, others - with the economic and financial side (in terms of profitable financial and economic conditions For the company).
We cannot say that offshore companies are a modern phenomenon. Its roots go back to ancient greece. There was first introduced a tax on exports and imports. In order not to pay these taxes, merchants looked for nearby territories and smuggled their cargo there.
To Russia this phenomenon came in the 90s. The Swiss company became the first offshore in Russia at that time.
The concept of an offshore zone
Offshore zone - is the territory of a separate state or part of the state, within the boundaries of which foreign companies special conditions are provided for the registration and conduct of their activities.
The presence of such zones causes indignation of some states, because due to low taxation, manufacturers transfer their capital to other countries, thereby avoiding paying taxes to the budget. Offshore zones are distinguished by their investment potential, legislation, level of infrastructure development, political environment.
Companies, in the modern world, can and are able to invest their investments not only in domestic companies, but also in offshore zones, which is basically a more profitable investment.
The most common offshore zones are the countries of Asia and Latin America. There are very highly qualified specialists in the field of investments and a favorable investment climate.
In Hong Kong, the tax rate is the same for everyone. This zone is recognized as the most profitable among all offshore zones.
The offshore zone as a whole includes 27 territories of the world.
Jurisdictions
Offshores are otherwise called jurisdictions.
There are several jurisdictions where you can register your business, for example:
Island offshore
These are small islands located in the oceans. They differ mainly in the complete absence tax payments, the possible lack of maintenance of any financial reporting, confidentiality of information about the owners of firms.
But there is a possibility that when registering your company in an island offshore, it will not be popular with large manufacturers and suppliers, since rather dubious companies are registered in this offshore. The island offshore attracts investors with all possible ways, since there is basically no own production there.
European offshores
Companies with a very high and prestigious status are registered there, they are very popular. A European offshore is different in that you need to pay taxes there, but there are certain benefits for certain types of activities, you need to keep both tax and financial records, the names of the owners are also not kept secret. It cannot be unequivocally said that these territories are offshore, but this practice is observed quite often.
Offshores with a special special taxation regime
Mostly they include territories located in the United States. Russia also has such territories, for example, the Republic of Kalmykia or Altai.
When a company goes offshore, the state loses all mandatory payments to the country's budget for this company. The owner saves on payments, thereby increasing his profit. In various sales or purchase transactions, mandatory payments are also not paid, the owners of these companies are hiding.
There is an opinion that it is precisely because of the presence of such offshore zones that global economic crises, since the money that was supposed to go to the state budget goes into the pocket of the owners in the form of net profit.
IN Russian Federation business owners can be found by annual accounts. It reflects all the persons of the company, having at their disposal more than 5% of the shares of the company, offshore - it is almost impossible to recognize them. This is a great way to be the owner of a company and hide it.
In Russia, registration of a legal entity can take quite a long time and spend a certain amount of money on it; in offshore companies, you can buy a ready-made business right away, or register in a week. But the biggest advantage is the ability not to maintain any reporting documentation, that is, not to disclose the company's revenue.
Offshore companies
An enterprise can be classified as offshore if:
- the owner is a resident of another country;
- the company is registered in one country, but is active and receives revenue in another;
- the company is registered in a simplified way and in a short time;
- there is no information about the owner of the enterprise or firm;
- there is no control over the activities of the company from the outside financial institutions;
- no accounting is kept and there is no other mandatory reporting;
- absence of taxes and other obligatory payments.
Island territories are most dependent on offshore, as they are very poorly developed and do not have their own companies. With low taxes and a simplified company system, they attract at least some capital into their economy.
Registration of a company in an offshore zone
In order to register a company in an offshore zone, it is not necessary to travel to this country. Now you can find a huge number of companies that are ready to help you with this and do everything without your participation. They will help you choose the right offshore for your activity.
An appropriate analysis of all offshores is carried out and the most profitable offshore from all sides is selected. And after 7 days you have the opportunity to get a company anywhere in the world without leaving your permanent place of residence. Such specialized companies can offer you both to register a new company and to acquire an existing one.
But all this comes at a cost. If you are not ready for additional expense, you can try to register a company yourself.
To do this, you still need to analyze all countries, and choose the most suitable for your type of activity. For your company to receive legal address, you will have to rent premises in an offshore country and hire a person who will represent the interests of your company in the first stages.
If the owner wants to be classified, experienced businessmen attract local residents who are willing to become the nominal owners of your company for a small fee. Then you need to pay the registration of the company, the so-called registration fee. It is annual. An additional annual fee may also apply. It is this fact that scares off the lower and middle-level entrepreneurs, since their arrival will be minimal after paying fees.
Pros and cons of opening a company in an offshore zone
The offshore zone is used by company owners in the following cases:
- reduce to a minimum the amount of taxes and fees of the company;
- hide the company's financial transactions;
- withdraw illegally earned money from the country;
- hide the net profit of the owner;
- avoid control by various financial structures of the country.
Nevertheless, the most popular condition is the fact of concealment of purchase and sale transactions by this enterprise. Some countries prohibit certain economic activities. By creating a company offshore, the owner performs any actions permitted by the offshore country, while the name of this person will be classified.
Such actions are beneficial to people with a certain high status in their country, for example, deputies. They can run a company offshore, make a profit, but at the same time not reflect it in their income tax return. Almost all operations with securities take place in offshore countries.
The only drawback is the fact that not all activities are permitted in a particular state.
Offshore accounts and banks
Offshore accounts- these are bank accounts that are located in a different country in relation to the country where the owner of the company lives.
Such accounts are more secure in their use and taxes are paid in minimum amounts. You can open such an account anywhere in the world. Before opening an account with one of the banks, it is necessary to study in detail all the tariffs and conditions necessary for opening and maintaining an account.
All offshore accounts can be divided into specific types, directly dependent on the goals pursued by the owner when they were opened, namely: corporate, private, settlement, current, deposit, savings, security, transit, operational.
Let's take a closer look at these accounts.
Private accounts
Such accounts are opened by an individual who manages it himself or has an authorized person to do so. commit commercial operations this account is not allowed.
Basically, such accounts are of a long-term nature, that is, they bring profit to the owner, for example, by investing money in various securities. In world practice, there are a number of banks, which necessarily include departments that specialize specifically in private investment.
Corporate accounts
They have the right to open no longer individuals, but individual entrepreneurs and various legal entities that are engaged in activities that bring profit to its owner.
These accounts allow you to non-cash payments with suppliers and customers. Such an account is mainly managed by persons with a power of attorney. On such an account, you can also store the profit received by the enterprise. The existence of such an account will reduce the tax burden on the company.
Current and expense accounts
Such accounts are used by offshore companies to move their money. Such an account can be managed remotely, since there is Internet banking, you can receive additional accruals on account balances, carry out various operations, and you can issue a checkbook. The card account involves the issuance plastic card to which your current account will be linked.
Deposit accounts
They involve keeping funds in the account for a certain period of time and receiving additional interest for this. The longer you choose the term of keeping funds in this bank, the higher interest rate.
The disadvantage is the fact that during the entire period of keeping funds in a deposit account, you do not have the right to cash them out. If, nevertheless, you decide to close your account or cash out part of the amount, be prepared to pay penalties. However, when concluding an agreement for opening such an account, it is possible to provide for the possibility of cash flow, but the interest rate will be much lower.
Operating accounts
Operating accounts are the opposite of deposit accounts. These accounts are designed specifically to carry out the maximum number of transactions on your account. The Bank may make claims to this account only in terms of the minimum allowable balance on the account or the minimum annual turnover on this account.
Transit accounts
They are used if the owner wishes to additionally secure all his transactions and conduct them in strict confidentiality.
Security accounts
They are opened for specific purposes, for example, obtaining a loan, in some countries for obtaining a visa. Then the money from this account can be used at your discretion.
Before opening such accounts, it is necessary to study all the advantages and disadvantages of these accounts and banks. Banks may charge additional fees and charges.
If you have no idea about how banks work with these accounts, it is better to use the services of a specialized company that will help you open a really profitable account for you. However, you need to be careful when choosing this specialized company. If you want all account information to be confidential, choose a specialized company based on reviews and recommendations from other people.
Countries for opening an account
It is important to choose the right country for opening an account.
- For example, on Seychelles the account is completely exempt from various tax rates, accounting records are also not kept, there is no control.
- On the Cyprus there is a minimum tax burden, but at the same time, reporting is mandatory, and accounts are monitored and audited.
- The most prestigious for opening accounts are Switzerland And Austria.
Account opening procedure and service cost
The procedure for opening an account is also different in all banks. For some, a prerequisite is the presence of an account holder on the day it is opened at the bank, for others, an authorized representative is enough, and still others can send a bank representative to you and conclude an agreement to open an account. Some require letters of recommendation for you from your business partners.
The cost of opening an account also differs from the country in which the account is opened. In addition to this amount, additional fees and payments may be charged, which must be clarified at the stage of signing the contract.
Offshore banks have the right not to respond to requests from various judicial and law enforcement agencies regarding the accounts of their clients, if such an obligation is not documented. Offshore banks provide services only to non-residents and completely refuse to work with local residents.
Summing up the procedure for opening accounts in offshore zones, it should be said that such an account will allow you to reduce the tax burden, free you from maintaining various reports in whole or in part, reduce control, receive additional investments, and the ability to manage your account from anywhere in the world.
Among the shortcomings, it can be noted that in pursuit of favorable conditions, you can choose a bank with a bad reputation, which can subsequently bring you a lot of inconvenience and problems.
In conclusion, I would like to note that offshore zones help businesses to reach the international level, encourage them to maximize profits, simplify all possible business procedures, provide security and complete confidentiality to their investors.
Good day! This article will discuss what “offshore” and “offshore companies” are, as well as analyze their advantages and disadvantages. Today, the budget of each country is built according to its established scheme. So, countries with more developed industries thrive on taxes from the profits of production, countries with developed tourism exist from deductions from the income of travel companies, etc.! But in this whole chain there are countries that are trying, and today survive at the expense of foreign entrepreneurs! Such countries are usually called "Offshore". Let's take a look at what this concept means.
Offshore is a financial zone (country) in which a citizen of another state registers his business on favorable terms (i.e. with the minimum rate tax), in the so-called offshore companies! Based on this, an offshore company is a company officially registered outside the country where the business is located. Opportunity to withdraw your funds to a country with high economic stability and a proven level of safety bank secrecy gives hope to entrepreneurs in the safety of their monetary assets.
For example, a business owner who is registered in the Russian Federation is required to pay a monthly tax of 20% of his income. If he makes his company offshore, he will pay 5% to the country in which his business is registered. This is especially beneficial, of course, for island states, where there is no fully developed industry of their own, it is these countries that survive at the expense of offshore companies !!! Such countries are divided into three categories, lists:
- The white list is as close as possible to the world standard of taxation.
- Gray list - countries, in which they are only going to bring the percentage of taxation closer to the world standard.
- Black list - probably the most preferred today, a list of companies that do not even think about implementing world standards
There are many offshore countries that are actively used by businessmen, but it is impossible to classify them by parameters better - worse All have their pros and cons!
A few principles of operation of such a taxation system
Let's take a closer look at the advantages and disadvantages of various types of offshore zones. We divide them into three types:
- classic :
- Advantages:
– no taxes;
– lack of state control;
- there is no need to submit reports;
- the highest degree of confidentiality.
- Disadvantages:
– distrust on the part of serious international firms;
- the territorial location is not always convenient, because "distant" companies increase management costs.
2. Prestigious:
- Advantages:
– the prestige of companies established in such zones is significantly increased;
– the possibility of cooperation with serious partners.
- disadvantages :
The need to provide financial statements;
- Incomplete exemption from taxes.
3.Other :
- Advantages:
- with a properly built scheme, taxes can be effectively minimized;
- in fact, these zones do not belong to offshore, so there is no bias towards them.
- Disadvantages:
– beneficial not for all enterprises;
- reporting is required.
Today, offshore companies are very popular among owners of large and medium-sized businesses, for them it is very profitable. The main advantage of transferring business to offshore zones is that the company gets the opportunity to increase the net profit from its activities many times over by legally reducing taxes.
Consider the positive and negative aspects of offshore for the owners of offshore organizations.
Advantages of offshore companies:
- Obtaining the status of a foreign company.
- Tax optimization.
- Storage of capital in a country with a stable economy
- Lack of currency control.
- Confidentiality.
- The ability to freely manage in cash making settlements with companies of all countries.
Disadvantages of offshore companies:
- Negative image.
- Inability to get large loans
- Special attention to offshore companies by representatives of international law.
- Big risks.
In conclusion, I would like to consolidate the topic of the article by formulating in detail the concept of "Offshore zone" - this is a financial zone with favorable tax conditions, where foreign capital is attracted. The economies of countries that receive less money suffer greatly from this! The outflow of money will be observed until all countries have equal conditions for taxation. And this is incredible!
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As a rule, all that an average citizen of Russia knows about offshore companies is that the oligarchs use this tool to hide money from the tax authorities. This is not entirely true. One who is not associated with financial sphere, but on whom the entire economy of the country is built and rests, he must know what this term really means, and whether everything that is connected with it is so illegal. This article will help the unenlightened, but indispensable units of society that support the country's economy, understand the issues of good and evil in the offshore world.
Offshore abroad
Offshores are certain foreign countries or their states with favorable business conditions for foreign persons in relation to that country. Simply put, these are states where you can open a company or conduct business without paying taxes and fees for it. Another plus of offshore zones is that, in addition to a sparing tax regime, they can secretly keep records and hide the real owner of the company. Most of these "tax-free countries" do not disclose information about financial transactions. This is what attracts scammers: to pull off illegal schemes for the withdrawal of funds, to confuse the traces of “criminal capital”, to evade taxes from purchase and sale transactions. According to statistics, part of the taxes that the state, where the enterprise was located before the transfer of rights, received, ends up in the pocket of the owner of the business. Analysts believe that it was offshore zones that influenced the emergence of the global financial crisis, since today a third of the total wealth of millionaires in the world is hidden in offshore structures, excluding valuable real estate and shares, which is about 11.5 trillion dollars, that is, one tenth of all money on Earth.
The history of the emergence and development of offshore zones
The first mention of offshore companies (from the English offshore - “out of the coast”, “out of borders”) was noticed in the middle of the last century in the United States, despite the fact that offshore schemes owe their appearance to the Greeks. From the history of Athens, it is known that the cunning Phoenicians skirted the city with high taxes and transported their goods to other islands, where they knew nothing about the duty. But already in America in 1950 there was a major scandal related to tax fraud. One firm to avoid tax payments registered its activities in another country with less taxation.
Where did offshore originate?
In Russia, the first offshore company was a Swiss company in the 90s. At the same time, the novelty began to gain popularity. There was an impression that highly developed states simply cannot influence the development of offshore companies. And this lack of control is explained by the fact that the most influential people in the world began to actively use such services to increase their capital. And the underdeveloped, predominantly agrarian economies, the countries found their benefit in this and decided to become the so-called tax haven for businessmen. Since then, the sale of tax breaks has become a major source of income for small, low-population states.
Now small financial centers are made not for a set of deductions, but due to contributions from company registrations. And this is quite enough to ensure a high level of living in their country. Due to non-residents transferring their income and firms, new jobs are being created for offshore zone citizens. In general, the offshore zone includes 27 territories of the world. The most common of them are the countries of Latin America and Asia. It is in them that a favorable investment climate prevails, and highly qualified investment professionals work. Today there are up to 70 financial offshore centers in the world. In addition, about 100 more states would agree to become such.
Many states are against offshore zones
The governments of developed countries, no matter how much they would like to prohibit citizens from using the services of offshore zones, are trying to protect this environment only systematically, which is not at all successful. Attempts to impose restrictions are futile, because during their existence, offshore centers have built a full-fledged legislative framework able to protect the rights of its clients. In addition, the situation was aggravated by the emergence of the global web. The Internet makes it possible to remotely manage and conduct business, which is what residents of highly developed countries use.
Any entrepreneur, when choosing a place to register his business, always pays attention to such parameters as the tax burden, the procedure for registering a company, and the frequency of inspections by state bodies. The most favorable regime in this regard is formed in offshore zones - individual territories or even entire states offering extremely profitable terms for class entrepreneurial activity.
Full list of offshore and onshore zones on https://gsl.org/en/offshore/offshore-zones/ in the form of a comparative table.
Offshore zone is in simple words, the territory of the state or part of it, within which non-resident companies have a special preferential regime of registration, licensing and taxation, as a rule, provided that their business activities are carried out outside this state. To designate offshore zones in different countries the terms "tax haven", "tax haven" or "tax haven" are also used.
The concept of "offshore zone" comes from the English word "offshore", which literally means "operating outside the borders." Such a definition is quite appropriate, since such a zone is understood as the whole state or its separate part, within which there is a special regime for registration, taxation and control of companies.
Offshore is a company registered in a country with preferential taxation, having a certain type of ownership and restrictions on conducting economic activity in the country of registration. Offshore allows you to conduct foreign economic activity, paying at the place of registration only a fixed annual fee.
Main features of offshore zones
In offshore zones, as a rule, the following conditions apply:
Preferential taxation;
Complete confidentiality of information regarding business owners and their transactions;
Simple and convenient business registration procedures;
Lack of audits of activities and financial reporting by government departments.
The fact is that the legislative norms of individual countries allow the head offices of foreign companies to register on their territory. For this, foreign firms pay a small contribution to the treasury of the country in which the offshore zone operates, about 300-1100 dollars.
The first offshore zones appeared in the world in the days of ancient Greece. Then the Phoenician merchants carried out the main trading operations on the desert islands of the Mediterranean in order to avoid taxation. This tradition continued into the Middle Ages.
At the same time, Switzerland became the very first offshore zone in the modern sense of the word. It was followed by the Netherlands and many former British colonies.
In order to protect national business, offshore companies are prohibited from engaging in any business activity within the offshore zone itself. The main income of the offshore zone consists of fees for registration and re-registration, tax revenues, expenses of offshore companies for maintaining their permanent representative offices (secretary offices) in the zone. They include the following items: rent of premises, communications, electricity, payment for accommodation and meals, transport, leisure, wage and some social compensations and payments (for example, payment for treatment, etc.) to bureau employees.
In many offshores, mandatory employment of local residents in the secretarial office is required, thereby solving the problem of employment. Equipment, cars, materials imported for the needs of companies are not subject to customs duties. The number of registered non-resident firms in one offshore can reach several tens of thousands.
Companies in offshore zones are mainly representatives of medium or large businesses. It is too expensive for small businesses to register and maintain offshore companies, so it is more profitable for them to organize activities in their own country.
Classification of offshore zones
In order to understand the variety of offshore zones and choose the most suitable one for registering a business, it is advisable to single them out certain types.
The main reason why numerous entrepreneurs register their business offshore every year is the phenomenon low level taxes. In some zones, there are no mandatory payments to the treasury at all. This allows you to expect higher profits.
Nevertheless, tax benefits in all offshore zones are different, which allows us to distinguish five main types of territories loyal to entrepreneurship:
1) Zones with zero taxation (classic zones). Countries that have such offshore companies in their territories do not require foreign entrepreneurs to pay taxes. They charge them only a small one-time fee once a year. Examples of such territories are the Virginia, Cayman, Seychelles, Marshall Islands, Belize, Nevis, Panama and Dominica.
2) Zones that take into account the territorial sign in taxation. In such territories, as a rule, the tax is levied only on the profit that was received within its framework. For companies that register only their head offices in such zones, there are no significant differences between the first and second types of offshore companies. States with such a regime include Algeria, Malta, Brazil, Malaysia, Singapore, Uruguay and Costa Rica.
3) Zones exempting certain types of activities. Offshore companies operating on such conditions provide entrepreneurs with a complete list of activities that are not subject to taxation. Offshore companies in Bulgaria, Latvia, Poland, Switzerland and some other countries work on such conditions.
4) Zones that tax individual legal entities. Cyprus is now considered such a zone. Here, the issue of full or partial exemption from taxes is decided on an individual basis.
5) Zones with low taxation. Offshores of this type do not provide for the abolition of taxes. However, the latter within their framework are so low that they sometimes turn out to be lower than the one-time collection of zones of other species. Currently, such a regime operates in certain territories of Ireland, Estonia, Montenegro, Portugal and Malaysia.
Despite the fact that offshore zones are a subsystem of service zones of special economic zones, classical offshore zones, unlike classical SEZs, have the following differences:
In the SEZ, it is possible to conduct activities on the territory of the zone, but not in offshore zones;
In SEZs, they receive a resident status, but not in offshore ones.
In addition, in offshore it is enough to pay an annual fee, regardless of the scale of activity, but in the SEZ they still pay all taxes and fees, that is, there is a relationship between economic indicators companies and taxes paid.
The difference between countries with moderate taxation and classic offshores is that:
Countries with moderate taxation are often more open than classic offshores (the latter are focused on confidentiality, pay less attention to violations of financial violations, etc.);
Moderately taxed countries often sign bilateral agreements to avoid double taxation, while classic offshore countries do not.
Allocate:
Countries with moderate taxation, this is the practice of a number of developed countries, in which, along with high taxes, there are preferential tax regimes for a number of activities (the so-called onshore-offshore countries), but the attractiveness is political, economic stability, as well as many agreements to avoid double taxation and other aspects.
Tax havens - that is, classic offshore. Preferential taxation for foreign non-resident companies. Companies must conduct their activities outside the offshore (a distinctive characteristic of classic offshore)
Tax havens are like internal offshores within the country. Preferential treatment for registered companies that must operate outside this territory. The difference from tax havens is that the action is only on the territory of the oasis, and not throughout the country. Often used by companies in the same country as the tax haven to optimize taxes.
By registering their business in the territory of other states, companies accept the business conditions prescribed in the laws of these countries.
In particular, we are talking on the process of registration of firms and inspections of their activities by specialized state structures. The legislative environment provides for the distribution of offshore zones into three major classifications.
According to the procedure for registering a business, offshore companies are divided into:
1) free, within which you can register a company by preparing an application and copies of constituent documents for English language(almost all zones);
2) formal, when, in addition to the constituent documents, a number of additional papers from the country of the main activity of the Zone, located on the territory of the EU, will be required.
The nature of audits of financial statements.
There are jurisdictions that do not require the maintenance and submission of their financial statements to government bodies (Vanuatu, Liberia, Maldives, Andorra, Costa Rica, Mauritius).
According to the degree of confidentiality, all offshore companies can be divided into:
Open registry zones that require full disclosure from business owners (Hong Kong, Luxembourg, Switzerland, Singapore).
Zones with a moderate register that oblige entrepreneurs to publicly post information about their largest shareholders and their shares (Belize, Barbados, Lebanon, Malaysia, UAE).
Zones with a closed registry that provide businesses with complete anonymity (Nauru, Liberia, Vanuatu, Mauritius, Liechtenstein).
Entrepreneurs are looking for the most loyal conditions: no taxes, a simplified business registration process, etc. However, growing up in big firm, you have to take care that the chosen territory has a good reputation. Here it is already necessary to make concessions and agree with more stringent requirements.
So, according to the degree of loyalty to the subjects, all offshore companies can be divided into the following categories.
1) Classic offshore territories have the following main advantages:
There are no taxes in such zones, and the governments of the respective states are limited to collecting from entrepreneurs an annual fee of 200-400 dollars.
The authorities do not interfere in the activities of the business and do not check it.
Maintenance and reporting is optional.
The entrepreneur and his company are provided with complete anonymity and confidentiality.
These territories include the Bahamas, Panama and the British Virgin Islands. Despite their high attractiveness, they often become a haven for illegal financial transactions and illegal capital transactions. That is why business partners at the international level are distrustful of companies registered in these offshore zones.
2) Prestigious offshore zones. They do not differ in such loyal conditions, but are highly valued by businessmen from all over the world. Their advantages include:
Availability of low tax rates;
High degree of trust from foreign major partners;
Location in convenient transport accessibility.
At the same time, in such offshore zones, companies are required to submit financial statements in special government bodies, as well as disclose information about the owners of the business and the nature of the transactions.
A similar regime is currently in effect in such states as Cyprus, the Netherlands, Hungary, Luxembourg, and Switzerland.
3) Onshore zones. Formally, they are not offshore, but they provide foreign companies with tax incentives, a simplified business registration regime and some confidentiality.
In this regard, they acquired the status of "onshore territories".
It should be noted that in some zones of this type there is a much more loyal taxation regime than in prestigious offshores.
In this regard, they occupy a middle position within this classification. Examples of territories with a similar regime are England, France, and the United States.
List of offshore zones for Russia
There is no single list of offshore zones; both the International Monetary Fund (IMF) and central banks various countries of the world.
In Russia, the list of states and territories providing preferential tax regime and (or) not providing for the disclosure and provision of information during the financial transactions(offshore) is published central bank Russia.
The list of offshore zones is contained in Appendix No. 1 to the Directive of the Central Bank of August 7, 2003 No. 1317-U “On the Procedure for Establishing Correspondent Relations with Non-Resident Banks Registered in States and Territories Providing a Preferential Tax Regime and (or) not providing for the disclosure and provision of information when conducting financial transactions (offshore zones)” (as amended on December 27, 2006)
The list of offshore zones for tax purposes was approved by order of the Ministry of Finance of Russia No. 108n dated November 13, 2007, the following states were included in it:
1) Anguilla
2) Andorra
3) Antigua and Barbuda
5) Commonwealth of the Bahamas
6) Kingdom of Bahrain
8) Bermuda
9) Brunei Darussalam
10) Republic of Vanuatu
11) British Virgin Islands
12) Gibraltar
13) Grenada
14) Commonwealth of Dominica
15) The Republic of Cyprus (excluded from the list from January 1, 2013 by Order of the Ministry of Finance of the Russian Federation of August 21, 2012 No. 115n)
16) People's Republic of China: Hong Kong Special Administrative Region (Xianggang) and Macao Special Administrative Region (Maomen)
17) Comoros Union: Anjouan Island
18) Republic of Liberia
19) Principality of Liechtenstein
20) Republic of Mauritius
21) Malaysia: Labuan Island
22) Republic of Maldives
23) Republic of Malta
24) Republic of the Marshall Islands
25) Principality of Monaco
26) Montserrat
27) Republic of Nauru
28) Netherlands Antilles
30) United Arab Emirates
31) Cayman Islands
32) Cook Islands
33) Turks and Caicos Islands
34) Republic of Palau
35) Republic of Panama
37) Republic of San Marino
41) Separate crown possessions of the British crown: Isle of Man and the Channel Islands (Guernsey, Jersey, Sark, Alderney)