OFFSHORE COMPANIES

motivations for OFFSHORE services

The principal motivation behind the demand for offshore services from both individuals and corporations are:

  • Tax Minimization
  • Asset Protection
  • Risk Management
  • Cost Reduction
  • Confidentiality Avoid Bureaucracy

Many offshore and tax planning jurisdictions have made efforts to ensure that their company law provides the following features:

desirable corporate characteristics

  • Limited Liability.
  • Minimization of directors liability.
  • Minimal or optional statutory filing obligations.
  • Nominee shareholders allowed.
  • Disclosure of beneficial ownership either not required or limited to special bodies, such as offshore authorities or central banks.
  • Broad range or permitted company names and suffixes to denote limited liability.
  • Low capital requirements The ability to hold directors and/or shareholders meetings anywhere in the world.
  • The absence of or the optional requirement for the audit of accounting records.
  • Confidentiality, in most common law tax jurisdictions beneficial ownership, director and shareholder etails are not a matter of public record.

OFFSHORE LLC AS AN ASSET PROTECTION TOOL

The Offshore Limited Liability Company (“LLC”) has become a very popular entity used in the offshore industry because of its flexibility, because it is tax neutral and because it offers a high degree of asset protection.

There are only a few offshore jurisdictions that have enacted LLC legislation. Among them, Nevis is by far the most advanced jurisdiction because it explicitly provides for charging order protection and it also provides that the charging order is the exclusive remedy of a debtor of a member.

The U.S. Internal Revenue Service has indicated that LLCs generally may be taxed either as corporations, or as partnerships, with income and losses flowing through to the members without any incidence of tax effects at the entity level. If the LLC elects to be taxed as a disregarded entity then, there are no foreign information-reporting requirements.

ADVANTAGES OVER A DOMESTIC LLC

Offshore LLCs offer far superior protection than domestic LLCs, especially if the assets are held outside the US in a jurisdiction that does not recognize US judgments because the creditor will have to bring a second lawsuit in the offshore jurisdiction.

If properly structured:

  • A creditor of a member of an offshore LLC with a non-U.S. manager may not be able to obtain jurisdiction in the U.S. over the non-U.S. manager.
  • Judicial dissolution and liquidation by U.S courts is not possible.

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