Offshore Incorporation For Dummies

Offshore incorporation can be a minefield for the unprepared. Save time and money by following this simple 5 step process.

1. Get a crystal clear idea of WHY you want to incorporate offshore. Is it to protect your identity? Protect your assets? Protect yourself from excessive liability to taxes? The place where you incorporate and HOW you incorporate will all depend heavily on your goals. This is not a simple question and the best idea is to contact a tax attorney before you start giving away your credit card details.

2. Work out your budget. A panama corporation may offer 'bullet-proof asset protection', but at 2-3000 dollars up front, and a similar amount per year to keep maintain it, is it going to pay for itself? Perhaps a cheaper option like a Belize or Seychelles company may offer you a better deal.

3. Get your offshore banking sorted. While some people may only need a company and not a bank account, the vast majority seeking to incorporate offshore will also want an offshore bank account in the name of the offshore corporation to freely move money around. While this is not essential it is highly preferable. Otherwise you may find yourself lumbered with an unusable offshore company burning a hole in your pocket.

4. Decide where to incorporate. This is a big issue for Investors from high-tax countries and not always something that's easy to answer. But here are some guidelines to help you out: UK/EU/US citizens should not incorporate in any 'tax haven' that is still a dependency of a high-tax country. This includes jurisdictions like the Cayman Islands, Channel Islands, BVI and Netherland Antilles, Anguilla, Aruba, the Turks and Caicos Islands (this list is not exhaustive). These countries already have entered into 'withholding tax' or information exchange agreements with the EU and the situation can only deteriorate. Furthermore the laws of some British Dependencies can be overruled or changed by Britain at whim. As a rule of thumb, entirely independent jurisdictions without Tax information exchange treaties offer you the best privacy and Protection. Some examples are Panama, Singapore, the Seychelles and Belize.

5. Decide who to purchase your offshore company from. The cheapest way to incorporate will always be through a registry firm in the jurisdiction itself. This is ideal when you have made up your mind already and know exactly what you want to do with the company. However for those who still have important decisions to make, or need information on how to set up their offshore banking a different approach can be more profitable.

Follow these 5 steps, then sit back and watch as your offshore company makes money for you!