What Are The Benefits of an Offshore Shelf Company?
An Offshore, International Company is commonly set up in a tax haven like Vanuatu or the British Virgin Islands, where there are no corporate or personal income taxes, capital gains taxes, reporting requirements, or restrictions on company employment policies. The main restriction is that the company, being exempt from all local taxes and restrictions, may not conduct business within the tax haven itself.
A shelf company is one that has already been set up, often years before. Should you require the use of a company that you can demonstrate has been operational prior to a critical date, a shelf company may be what you need.
Key Benefits
Conduct business without corporate taxes: Offshore Finance Centers, such as Vanuatu, allow the formation of International Companies that have no tax or reporting responsibilities. This means you save money not only from the absence of corporate taxes, but also from reduced compliance and other regulatory costs. This is especially helpful to Internet based companies as they can legally conduct business all over the world from a base with no corporate taxation. The lack of extensive tax and other government compliance costs is an enormous savings by itself.
Conduct business as an international entity: International Companies have the same rights as an individual person and can make investments, buy and sell real estate, trade portfolios of stocks and bonds, and conduct any legal business activities - so long as these are not done in the country of registration.
Keep business affairs confidential: Offshore Companies offer complete privacy. If the company shares are held by a Trust, the ownership is legally vested in the trustee, thus gaining the potential for even greater tax planning advantages.
Reduce payroll and travel expense administration: Offshore Companies set up in Vanuatu need not pay social security, withholding tax, or associated expenses of employees working in other foreign countries. This can be a major savings for companies that have staff working on overseas projects.
Allow employment or consultancy fees to accumulate in a low tax area: Offshore corporations can contract the services of professionals to employers resident in high tax locations or politically unstable areas. This allows the fees to accumulate in a low tax jurisdiction.
Protect investments in other foreign countries: International Companies can loan funds to corporations in other foreign countries. Investors may set up, but not directly own, an offshore company that loans funds to a development company set up in another country and charge interest rates that will lower tax obligations and protect the long term ability to repatriate investment funds. This can be especially important when working in countries with strict exchange controls and high tax profiles.
Minimise tax exposure when dealing with international transactions: An offshore corporation can buy or lease products from one country and then sell or lease them to a company in another country so the profits of the transaction are accumulated in the offshore company where there is no taxation on profits.
Maximise profits from intellectual property rights, franchising and licensing: An offshore company can franchise or licence intellectual property rights in other foreign countries allowing the profits to accumulate in a tax free environment.
Protect the long-term survival of multinational companies: By moving their domicile from countries with poor economic or political stability to a more stable tax haven.
Protect assets: In combination with a Trust, an Offshore company can avoid high levels of income, capital and death taxes that would otherwise be payable if the assets were held directly. It can also protect assets from creditors and other interested parties.
Simplify the transfer of assets and properties held in several countries: The sale or probate of properties in different countries can become complex and expensive. If these are collectively held by an offshore company, ownership can be transferred by company shares rather than transferring the actual properties owned by the company.
Own or lease ships or pleasure craft: Vanuatu International companies may own or lease ships or pleasure craft and pay no taxes on income derived from the vessels. Registration fees are low and Vanuatu flag vessels are welcomed in ports world-wide.
Bank Accounts
Moores Rowland shelf companies come with a Vanuatu bank account and if required, a credit card can be assigned so you can access your funds from any compatible Automatic Teller Machine. For more information on the offshore bank account click here.
Trusts
To assure complete privacy, the shares of International Companies are often held by a discretionary trust. The trustees are the legal owners of the company and conduct business according to the Trust Deed and the Letter of Wishes for the benefit of designated beneficiaries. For more information on trusts, click here.
Attributes of a Vanuatu International Company
A Vanuatu International Company, regulated by the Vanuatu 1993 International Companies Act, has many favourable attributes for persons who wish to use an offshore domicile. An international company can be incorporated on the same day as instructions are received. Companies which offer their shares to the public or which intend to hold banking, trust or insurance licences, cannot be registered as international companies. An international company can do what it wishes with its assets so long as it remains solvent. It may distribute its net assets to its owners or gift them to others, purchase its own shares, cancel shares etc. To review the specific characteristics of the International Companies Act 1993 click here.
