Offshore Business Formation in Panama

The Republic of Panama is on the isthmus that connects North America to South America and is the southernmost country in Central America. The Panama Canal, completed by the United States Army Corps of Engineers in 1914, is a waterway connecting The Atlantic Ocean and the Caribbean Sea to the Pacific Ocean. Tolls from the Canal make up a large portion of the country’s gross domestic product, or the value of all goods and services produced within the country. Panama’s economy is quickly growing, making it a popular choice for offshore business formation.

Panamanian Corporations, the name given to offshore businesses in Panama, are created under Law 32 of the General Corporation Law. This law provides for a flexible corporate structure while protecting privacy. It is an excellent statute for offshore businesses to develop and interact in the international business world. In fact, it is so well-designed that other jurisdictions have mimicked its framework.

This jurisdiction offers a completely tax-free haven for all offshore business activities outside of Panama. Two local citizens act as the organizers and subscribers for the incorporation, and it is customary to have a local registered agent in Panama as well. At least three directors are required; however, nominee directors are typically appointed, as their information is part of public record. The jurisdiction also requires at least three officers to fill the roles of president, treasurer, and secretary. The officers can be individuals, corporations, or some other entity. While an officer may hold more than one position, he may not be both president and secretary. Those named as directors can also be officers.

Shareholder and director meetings are not required, but can be held in any country or by way of virtual meetings. Panamanian Corporations have no reporting requirements nor are there any exchange controls or restrictions.

http://en.wikipedia.org/wiki/Panama
http://en.wikipedia.org/wiki/GDP
http://www.panama-corporations-incorporate-in-panama.offshore-companies.co.uk/

Who Needs an Offshore Business?

Perhaps you’ve heard of offshore business formation, but are not certain if it is for you. Some individuals benefit from utilizing offshore companies, while others do not need them.

You may not need an offshore company if your only intention is to trade stocks or if you are not concerned about confidentiality. If you aren’t able to justify the costs of keeping an offshore business in good standing, then it may not be for you.

However, many investors and companies can benefit from an offshore business. Offshore companies afford more privacy. They do not require as much paperwork, reporting, and meetings, making them less expensive to run and easier to manage. Business run offshore typically have less taxes, and in some cases, no taxes at all.

Self-employed individuals – such as consultants or artists – can benefit from operating as an employee of an offshore company. They can act as both the sole shareholder and director, maintaining control while taking advantage of inherent benefits of offshore business formation.

Expatriates working overseas, particularly those in countries with political difficulties, may find advantages to working through an offshore business. They will be able to avoid or minimize taxes and prevent issues with exchange control in their working country.

Companies involved in investments or property can set up an offshore business to avoid taxes, such as inheritance tax or capital gains tax. In some jurisdictions, funds gained through investing can be deposited in a bank account and the interest or capital gains are kept gross.

Individuals involved in purchasing or using copyrights, patents, trademarks, or domain names sometimes use offshore companies. Royalties may be taxed at a reduced rate, although sometimes still must be taxed at its home jurisdiction.

Regardless of the reason for utilizing an offshore business, one often finds the advantages of confidentiality and protection make them a worthwhile choice. Offshore company formation shuts out the possibility of predatory lawsuits, protects retirement funds from bankruptcy, and allows for the discreet transfer of will monies.

http://www.alexandrougroup.com/en/faqs-offshore-company-incorporation.html
http://en.wikipedia.org/wiki/Offshore_company
http://www.offshoretactics.com/articles/KeyMistakesWhenBuyingAnOffshoreCompany

Offshore Business Formation in Guernsey

The offshore business jurisdiction of Guernsey is the second largest island of the British Channel Islands. Citizens speak both English and French, although the former is the official language. This small island, whose capital is St. Peter Port, is an associate member of the European Union and under European law.

The island of Guernsey is twenty-five square miles of mostly level terrain. It is located approximately thirty miles from the Normandy coast of France and seventy-five miles from Weymouth, England.

Guernsey is unique in that it issued interest-free money, as well as using gold and silver coins, during a fourteen year period following Napoleon’s wars. This move stimulated the economy, enabling the country to keep the job of creating money out of the central bank. Even today, financial services like banking, insurance, and fund management make up thirty-two percent of local income, which may be behind the jurisdiction’s decision to restrict offshore company formation in the business of banking and insurance.

The offshore business formation vehicle that Guernsey specializes in is the Exempt Private Company (or EPC). EPCs must have at least two, but no more than twenty shareholders, and no corporation may have any beneficial interest in the EPC’s shares.

Guernsey does not require corporate taxes, nor is auditing required; however, accounts must be maintained on the company. Only one director is required for a Guernsey EPC, and he or she does not need to be a local resident. A registered office in the jurisdiction is necessary, and the company must have a secretary. Director and share holder meetings can be held anywhere, either within the jurisdiction or even via a virtual meeting. Like most jurisdictions, an EPC in Guernsey cannot do business within the jurisdiction.

While confidentiality is important to most investors interested in offshore business formation, one should realize that in Guernsey, the authorities have the right to know the details of the beneficial owner of an EPC.

While individuals may choose a name for their company, they are required to end it with the word “Limited.”

http://en.wikipedia.org/wiki/Guernsey
http://www.gbsei.com/guernsey.php
http://www.acra.gov.sg/Company/Making_Changes/Annual_Return_of_Local_Company/Exempt+Private+Companies.htm

How to Incorporate an Offshore Business?

While obviously there are conditions that affect the time it takes to incorporate an offshore business, you can generally expect your new company to be formed within two to three weeks.

The steps in creating your business involve first determining exactly for what you will use your business. Are you interested in investing? Owning property? Protecting your privacy? Establishing exactly what your purpose is will make it exceptionally easier to move through the process and be happy with the results.

Next, you will need to select the jurisdiction for your offshore business. It is best to review the pros and cons of each jurisdiction. Check that the area has reliable communication and financial systems, that the political and economic situation is stable, and verify that the legal system is established. Some jurisdictions are more suitable for specific vehicles, so take this into consideration as well.

You will need to prepare the paperwork prior to submitting it to Alexandrou Corporate Services to form your offshore business. Once we receive your documentation, it will take approximately one week to finalize your documents. From that point, your paperwork will be processed, your offshore company incorporated, and the paperwork will be sent to you in two to six days.

If you are not interested in waiting that long, or would like an aged company, you can purchase an “off the shelf” company based in the jurisdiction of Cyprus. Documents will typically be sent to you in one to two business days.

A shelf company is already formed, but without an owner. It will remain “on a shelf,” so to speak, until an individual chooses to purchase it. The new owner will not have to wait as long for their incorporated offshore business and at the same time, they will receive a company that has a past and credibility that goes with that. Investors pay more for shelf companies, not only for their inherent advantages, but also in order to pay the yearly fees associated with them.

http://www.alexandrougroup.com/en/faqs-offshore-company-incorporation.html

How to Reduce Corporate Tax Bill

Businesses are continually seeking ways to reduce costs and increase productivity. Economic troubles have adversely affected many companies, causing layoffs and cutbacks. However, there is an area that businesses can trim without sacrificing quality or manpower.

More and more companies are choosing to incorporate business at an offshore jurisdiction, and many corporations are utilizing offshore banking options. These options provide businesses with a legal, effective method of reducing their corporate tax bill.

Businesses have an obligation to their shareholders to keep profits high and taxes low. Google, for instance, only paid 2.4 percent in corporate taxes in 2010 by setting up a shell company in the Netherlands to receive all profits. Ireland does not tax profits in other European Union countries. The money was then sent to Barbados, which has no capital gains tax.

In many jurisdictions, income earned on offshore accounts is paid in whole without taxes being withheld. Corporations can transfer bank accounts from their home country to an offshore jurisdiction, as Google did, so that they can benefit from this tax reduction.

Some jurisdictions do not have Capital Gains Taxes and many have signed double tax agreements with other jurisdictions, preventing the potential for being taxed twice on the same income. Even if the bank account is held in a jurisdiction without a double tax treaty, a company can establish an Intermediary Holding Company or a shell company, as Google did in the Netherlands. This holding company can be established in a country with a suitable agreement and channel investments for the business.

The various jurisdictions each offer reductions for different types of taxes as well as breaks for different company vehicles. It is important that you review the different jurisdictions to determine which one best suits the needs of your offshore business.

A reduced corporate tax bill is not the only reason to consider an offshore bank account. Other benefits for offshore business formation jurisdiction include the protection of assets, better returns, complete confidentiality, and the ease of advancing overseas business interests.

http://www.belize.com/offshore-banking.html#ixzz1ICW8VJTC
http://offshoresimple.com/why_offshore.htm#4
http://en.wikipedia.org/wiki/Tax_haven

http://www.offshorelegal.org/offshore-tax/offshore-tax/reduce/lower-tax-liability-legally-offshore.html
http://www.businessweek.com/magazine/content/10_44/b4201043146825.htm
http://simonwillison.net/2004/Apr/5/whatIsGoogle/
http://www.theregister.co.uk/2011/01/20/google_q4_2010_results/

How Google Paid Almost No Corporate Taxes in 2010

Google isn’t just a search engine. It is a giant in the Internet realm with the “largest and most scalable platform” for web-based applications. With applications for individuals, businesses, and educators, Google provides Internet apps for everything from blog readers, checkouts, email, chat, calendar, and so very much more. And Google has the profits as proof of its status. Its net income for all of 2010 was $8.51 billion. Google is so big that its name has been deemed a verb by the Miriam-Webster Dictionary.

Google also managed to keep more of the profits by paying less in corporate income taxes in 2010. Using a complicated system that included techniques called the “Double Irish” and the “Dutch Sandwich,” Google reduced its corporate rate to just 2.4 percent.

The top five technology giants are Apple, Oracle, Microsoft, IBM, and Google, in no particular order. The other companies reported rates that ranged from 4.5 percent to as high as 25.8 percent on overseas earning between the years of 2007 and 2009. Even tax economists and experts are amazed at Google’s accomplishment, especially considering that many of the countries that Google operates in have high tax rates, averaging over twenty percent.

So what exactly did Google do?

To break it down to its simplest, Google funneled corporate income through Ireland, where its international operations is located, to a shell in the Netherlands, where it was transferred to Bermuda. Bermuda is a tax-haven that has no corporate income tax.

Google’s Dublin office – which receives payments from advertisers in Europe, the Middle East, and Africa – earned 88 percent of the $12.5 billion in sales outside the U.S. However, Google’s Dublin office only reported a profit of less than one percent, so it didn’t need to pay much of Ireland’s corporate tax, which is 12.5 percent. The money doesn’t stay in Dublin office, but Irish laws tax dollars sent directly to Bermuda, which is why it must first go to the Netherlands. Irish law does not tax some payments in other countries in the European Union.

The shell company in the Netherlands then transfers the money to Bermuda, which is technically an Irish company, which is why it is referred to as “Double Irish” or the “Dutch Sandwich.”

http://en.wikipedia.org/wiki/Tax_haven
http://www.businessweek.com/magazine/content/10_44/b4201043146825.htm
http://simonwillison.net/2004/Apr/5/whatIsGoogle/
http://www.google.com/apps/
http://www.theregister.co.uk/2011/01/20/google_q4_2010_results/
http://www.merriam-webster.com/dictionary/google

Benefits of Discretionary Trust in Cyprus

A Cyprus Discretionary Trust is quite common and allows the trustee leeway in using his or her own judgment in assuring what will be best for the beneficiary. Oftentimes, the settler will provide some type of instruction or guidelines through a Letter of Wishes. If even more guidance is preferred, the settler can introduce a protector (sometimes referred to as a nominator) into the Trust Deed. The protector can prevent a trustee from making certain decisions in some cases. He or she cannot positively influence the trustee.

A Discretionary Trust has its benefits over other types of trusts. Its flexibility makes it a popular choice. Since trustees can use their own discretion, they are able to make changes under different circumstances – within the boundaries of the Trust Deed or Letter of Wishes – without receiving approval from the beneficiaries or the court.

Beneficiaries are not taxed on the assets within a trust fund, since it is under the trustee’s care. The beneficiary has no legal right to the assets; and therefore, cannot be taxed on it. Should a beneficiary file for bankruptcy, the trust fund will not be included, as he or she only has contingent interest in the trust assets. Additionally, no estate taxes are due on Discretionary Trusts.

Individuals choose a Discretionary Trust for a number of reasons. Mitigating tax expenses is a common reason for a trust fund. This is a traditional tax-planning strategy because of the benefits involved. Trusts are often used to provide assets, property, or support to individuals who are otherwise unable – or unwilling – to properly manage them. For instance, mentally handicapped individuals or family members in an unsuitable marriage might be beneficiaries of a trust fund. Individuals may choose a trust in order to remain the trustee, ultimately determining exactly for what the assets will be used.

Those interested in donating to a charity or religious group may use a trust, particularly if interested in doing so anonymously. This will also help for individuals who wish to have control over exactly what the donation is spent on.

For further information of international trusts or offshore business formation please leave a comment on this blog and someone will get back to you promptly.

http://www.ncl-corporate.com/index.php5?page_id=74
http://www.global-money.com/item.php?id=182
http://law.wustl.edu/Library/cdroms/IBL/Tax/American.htm