Throughout the last 30 years a number of small
countries have implemented a number of tax incentives
to encourage foreign companies and businessmen to
incorporate • companies in their jurisdiction with the
purpose of carrying out their commercial activities
worldwide. The primary reason for doing so was to
boost the local economy in the following ways:
•
Increased state revenue from duties paid to the
Company Registry Department, and revenue stamps;
•
Increasing employment of local professionals and staff
who provide services to the offshore companies;
•
Increasing travel and tourism to the country by high
income individuals and businessmen;
•
Currency deposits to the country's banking
institutions leading to higher liquidity,
profitability and activity for the country's banking
system.
Case Study - The development of Cyprus as an offshore
centre
Cyprus decided to attract offshore enterprises to
boost the economy in the wake of the disastrous
Turkish invasion in 1974. Rushing the legislation
through Parliament, establishing the tax incentives
and preferential treatment for offshore companies in
Cyprus, it managed to attract 83 offshore
establishments in 1976. There are now some 32,000
offshore companies in Cyprus and the Central Bank
registers approximately 350 new ones every month. With
the entry of Cyprus in the European Union a
reorganization of the current tax system took place in
order to go along with the European Community
legislation and instructions. The new changes allow to
the Cyprus International Business Companies to
clarified and accepted as prestige European Union
corporations and at the same time have the privileges
of the low taxation in comparison with other European
countries.
Offshore services are one of the fastest growing
sectors of the Cypriot economy. According to
government figures in 1995 it brought US$ 355,3
million in foreign exchange, around 4% of the GDP of
the island.A breakdown of new registrations during
the past three years showed that 25 % came from the
European Union, 60 % from other European States, 7 %
from the USA, 6 % from Asia and the remaining 2 % from
Africa and Australia.
The vast majority of the offshore companies do not
maintain physical offices or staff in Cyprus and are
managed by their lawyers or accountants on the island,
taking advantage of the local tax incentives. A survey
carried out by the Cypriot Offshore Enterprises
Association revealed that 78 % said their reason for
choosing Cyprus as a base of operation was the low
offshore tax 4,25 %. IBC incorporated until the 31 of
December 2001 (as per Central Bank Of Cyprus
annousment ) will be taxed with the rate 4.25% until
the 31 of December 2005, if no changes of shareholders
will take place. After the 31 of December 2005, all
the companies will be taxed at the rate 10%. The
survey revealed that nine out of ten companies would
choose Cyprus again if they had to make the decision
over again.
The factors and advantages that developed Cyprus into
a successful offshore centre include the following:
• The tax and other incentives offered for offshore
companies in
Cyprus;
•
The network of favorable tax treaties that
Cyprus
maintains with other countries;
•
The Cypriot " British modelled" legal system and
corporate law;
•
A strong banking system and very strong commercial
banks;
•
Abundance of Cypriot professionals and graduates, the
vast majority being educated and trained in
Western Europe
or the
USA;
•
Continuous support, promotion and progressive
legislation from the government;
•
The English language being widely known and used as
the business language;
•
Modern infrastructure and telecommunications;
•
Minimal level of crime;
•
The convenient geographical location of the island.
BASIC CONDITIONS TO QUALIFY FOR THE TAX INCENTIVES
1.
The offshore company must belong to non-residents of
the country in which it will be registered.
2.
The company must not earn any income nor carry out any
commercial activity within the offshore jurisdiction
where it has been registered.
Example 1 – With the new legislation, owner of IBC may
be Cyprus residents as well as non residents
-
Cyprus registered companies , local or IBC will be
taxed at the l rate of 10 % on profits.
Example 2 • no commercial activity in the jurisdiction
-
An English non resident company's profits earned from
activities outside Great Britain are not liable for
tax in the United Kingdom. The part of the income that
is earned from activities in connection with the
United Kingdom will be taxed at the normal English tax
rate.
Example 3 - no commercial activity in the jurisdiction
-
An importer of automobiles from the
USA wished to form a
Delaware
company to be utilised as a middleman for his
purchases. However, this was not advisable since the
client's middleman company (an American company) would
buy the cars from another American Company and export
it to a foreign country, therefore the profits would
be considered as raised in the USA and therefore taxed
at the normal American tax rates. This would defeat
the initial purpose of the client to minimize
taxation.
The term "offshore" is not a legal term but simply a
description used for convenience by professionals to
describe corporate entities which are wholly owned by
non residents and derive their income from activities
outside the jurisdiction. From the legal point of view
these companies do not differ in any way from the
companies registered and owned by the local residents
of that particular jurisdiction.
2. LEGAL
FRAMEWORK
2.1. The
Company Name
The right to use a certain company name is granted by
the Registrar of Companies. A proposed company name
may not be approved on the following grounds:
•
The name is the same or similar to existing names,
creating
confusion or false impression of association or may be
perceived as misleading. Words such as Crown, Royal
etc. are not allowed.
•
Words such as International, European, National may be
sensitive and may be granted upon certain conditions.
•
Words such as Bank, Insurance, Investment, Fund
require a special licensing procedure and special
capital requirements prior to being granted.
Example 1:
For an Isle of Man company to include the word
International in its company name it had to prove the
fact that it maintains offices in a number of
countries. The Registrar granted the name with the
condition that the company is incorporated with a
minimum share capital of 100,000 Sterling Pounds.
Points to Note:
•
Some offshore jurisdictions are flexible about company
names, allowing duplicity of company names.
•
PPB INC applies and maintains a list of ready approved
names by the Registry authorities. These names, most
of them generic in nature, are ready for incorporation
upon selection by the client.
•
If the client wishes to propose an individual company
name we request that three or four names are given in
order of preference to maximize chances of approval.
•
If the client wishes to use the offshore company as an
independent party from his local company then the name
for the offshore company should not have any
similarity to his local one.
2.2. The Company's Share Capital
The authorized share capital
is the monetary amount of shares, which the company
has the right to issue, or sell, to the shareholders.
The authorized share capital can be raised subject to
a shareholders meeting and approval.
The issued capital
is the amount the company actually issues and sells to
the shareholders, and it can differ from the
authorized amount. For example a company may be
registered with $1000 authorized capital, and issue
$600 of it. This means that it still has the right to
issue $400 more.
Note:
It is a common misconception that the issued and
fully paid capital of the company should be deposited
in the company bank account and stay there for the
duration of the company's life. This is not the case.
The contribution of capital may be carried out by
settling one of the offshore company's first
liabilities, which are the formation fees to PPB INC.
PPB INC invoices the offshore company for its
services, and the client, by settling these fees,
contributes capital to the company.
Therefore in this way the offshore company can be
registered and be fully operational without any
deposits to the company's bank accounts and without
any further requirements regarding its capital.
The Company's Shares
Shares can be registered or to the bearer. The owners
of the registered shares are documented in the company
records and the public records of the Companies
Registry. Bearer shares are not associated with the
name of the shareholder; physical possession of those
shares indicates ownership.
Note:
Most of the banks are not willing to open bank
accounts for companies with bearer shares as they can
not trace the ownership at any point of time. As a
measure against money laundering the Central Bank of
Cyprus instructed the commercial banks in Cyprus not
to open bank accounts for companies with bearer
shares.
2.3.
Memorandum of Association
The Memorandum is a document signed by the
shareholders of the company, which sets out the
activities in which the company will do business. In
accordance with the ultra vires doctrine established
by English courts, companies are only authorized to
conduct such activities as are listed in the
Memorandum. PPB INC includes a number of objects that
give the flexibility to the client to carry out any
normal commercial transaction.
There are some jurisdictions that allow the inclusion
of a "general paragraph", which, in essence, says that
the company has the right to engage in such
activities, which, in the opinion of the directors,
are beneficial to the company.
Example of a general paragraph and only object
included in the Memorandum of Isle of Man companies:
"There are no restrictions on the exercise of rights,
powers and privileges of the company".
2.4.
Articles of Association
The Articles represent a contract between the
shareholders and the company. They provide detailed
guidelines as to the management of the company's
affairs, and set out the rules for the interrelation
between the shareholders, the company, and the company
officers.
Example:
Two owners of a new offshore company with a
shareholding of 60 % and 40 % respectively were
discussing the possibilities of equal decision powers,
even though one of them was the majority shareholder.
PPB INC proposed for the company to issue two groups
of shares; Class A shares amounting to 60 % of the
total shares which had the right to appoint one
director to the board of directors, and Class
Â
shares amounting to 40 % of the shares that had the
right to appoint one director to the board of
directors. This provision was inserted in the Articles
of the company. For the articles of the company to
change, a special resolution must be passed requiring
at least 75 % of the shares voting to do so. Therefore
none of the two shareholders could withdraw or alter
that provision. In this manner the two owners of the
company with different shareholding had the same
powers. Usually law offices have standard Articles of
Association, which can be changed prior to
registration of a new company, or amended in the case
of an existing one. It should be taken into
consideration that the latter option above takes
considerably longer.
2.5.
Shareholders
The shareholders are the legal owners of the company.
The shareholders of a company can be physical persons
or corporate bodies. The minimum number varies with
jurisdictions.
Note:
For jurisdictions that have a minimum of two
shareholders and there is only one owner of the
company this does not create an inconvenience in the
case where the client utilizes the PPB INC nominee
services for anonymity. In this case two PPB INC
trustee companies (thus fulfilling the requirement of
the two minimum shareholders) will hold the shares on
behalf of the one and only owner of the company.
Obviously the same two trustee companies can
accommodate a larger amount of beneficiaries if
necessary.
2.6.
Directors
The directors are legally responsible for all of the
affairs of the company before the shareholders, as
well as the government. They are answerable for the
actions of the company in a court of law. Their number
also varies according to the jurisdiction. Some
jurisdictions allow for corporate directors i.e. a
company may act as directors of the other company.
Note 1:
In the case where the client utilizes the PPB INC
nominee services for anonymity PPB INC appoints a
minimum of two nominee directors so that at any point
of time a director is present and available if his/her
services are required by the client. The nominee
directors are professional and qualified members of
PPB INC.
Note 2:
For the jurisdictions where the directors should be
located out of the country of incorporation for
example England and the client utilizes the PPB INC
nominee services for anonymity PPB INC appoints three
nominee directors located in three different
countries. The reason for this is that the company in
this manner does not have the majority of the
directors in any single country and thus is not
taxable in any of the three countries the directors
are located in.
Note 3:
To use a Double Tax Treaty, the client should know
that one of the requirements for tax residency
determination is the location of the management and
control of the company. In other words, the directors
of the company should reside in the country which is
to be considered the tax residency of the company.
2.7.
Secretary
The company secretary may be a physical or a legal
person, and is responsible for the good standing of
the company in relation to the Registrar and other
government bodies. The secretary keeps the statutory
registers and prepares the notices, returns and other
documents, which must be delivered to the Registrar of
Companies as per the jurisdiction's requirements.
Note:
It is unfortunate that this term coincides with the
description of an office secretary and thus may be
confusing.
2.8.
Distribution of duties
This is probably a good point to mention a very
important aspect of English Law on companies, and that
is distribution of duties. In other words,
shareholders, directors and bank signatories have
completely separate rights and duties in the company,
and are completely independent of each other. All
three may be the same persons, or they may be three
different groups of persons. Mr. A can be shareholder,
Mr.
Â
the director and Mrs.
Ń
-the bank signatory.
2.9.
Registered office
In accordance with the law, the registered office of
the company must be located in the country of
incorporation. The address of the registered office is
considered the address where official and legal
documents may be served on the company.
Registration documents, trust documents, Powers of
attorney , apostilled documents and legalized
documents
3.1. The
incorporation documents
Incorporation documents are issued by the governmental
body of the jurisdiction responsible for the company
registration and records. The incorporation documents
vary from jurisdiction to jurisdiction. The
incorporation certificate includes the name and date
of registration of the company. Additionally depending
on the jurisdictions there may be certificates showing
the company registered directors, the company
registered shareholders, registered address and other
information.
3.2.
The trust documents
The trust documents are prepared and delivered to the
client after receiving the necessary information from
the client. The trust documents include:
•
Confirmation letter from the Trust Company
•
Declaration of Trust
•
Instrument of Share Transfer (without date)
•
Share Certificates
•
Pre signed resignation letters from the nominee
directors and secretary of the company (without date)
There are two types of Powers of Attorney that the
company can furnish the beneficial owner in order to
establish a visible connection with and official
authority from the company. (In addition to the
ownership relationship which the client may not want
to be visible). The Power of Attorney is issued upon
written instructions from the client.
The first type is the general Power of Attorney with
the company rendering all authority to the attorney to
act on behalf of the company. This Power of Attorney
is usually, but not necessarily, intended for the
beneficial owners of the company.
The second type is a specific Power of Attorney with
limited authority to perform specific functions on
behalf of the company. A specific Power of Attorney is
usually requested for the client's associates or
members of his management and personnel. Nominee
directors usually issue the Power of Attorney for the
period that their work as directors has been paid for.
3.4. Apostilled documents
Anyone who has had to conduct legal matters in one
country on behalf of a person, legal or physical,
residing in another, has probably faced the problem of
the acceptability of these documents, and questions
about their authenticity. The Hague Convention was
signed on
5
October 1961 by a number of countries, in order to
unify and standardize the method of legalizing
documents issued in one country, for use in another.
The apostille itself is a certificate issued by a
government body of one of the convention member
countries, confirming the authenticity and legality of
the document to which it is attached. It is used
regularly in cases where documents of a company must
be presented for various things such as opening bank
accounts, buying shares, or registering a rep office
in another country. Apostilled documents are, in
accordance with the rules of the convention, fully
acceptable in such cases as genuine legitimate
legalized true documents.
3.5.
Legalized documents
Another way of legalizing documents, in other words
providing confirmation of the authenticity of the
document to the party to whom the document is
presented, is the legalization of the documents. This
is done by the Embassy of the country where the
documents are intended to be used. An original
document is first legalized at the Ministry of Foreign
Affairs of the country where it is issued; in other
words the Ministry confirms its authenticity. Then
the document goes
to the Embassy, which, accepting the confirmation of
the Ministry, legalizes the document also. The
Embassy, in cases where documents in the language of
the recipient country are required, can also confirm
the correctness of the translation of the documents.
Thus, the end result is a document, the authenticity
and legality of which is fully confirmed by the
Embassy of the recipient country, and as such will be
fully acceptable for legal transactions within that
country.
The vast majority of the owners of offshore companies
utilize nominee directors and nominee shareholders in
order to maintain anonymity and confidentiality. There
are many reasons for doing so, including:
•
In most of the cases the offshore company is utilized
as a third independent party having "arm length"
transactions with the client's local market. In this
case the two companies should not have the same
director(s), since the same person cannot sign an
agreement between the two companies in his capacity
of director in both companies!
•
Most countries maintain the tax doctrine that
liability for tax is determined according to the
location of the management and control of the company.
If it is evidenced that the registered directors and
registered shareholders of a foreign company are
located in the local market the income of the foreign
company will be considered as the income of the local
owners, for which they will be liable for tax.
•
The clients want to maintain a low profile / anonymity
for their commercial activities / accumulated profits
/ investments.
•
In some countries according to the Central Bank
regulations citizens are not allowed to open accounts
in foreign banks, open up companies, hold shares, etc.
The trust agreement system allows all the above
actions within the legal framework.
As described above, all of the elements of a company's
legal structure, such as shareholders, directors,
secretary and legal address are clearly visible in the
documents filed in the Registrar of Companies. The
Registrar is a government Department responsible for
the registration and maintenance of companies in the
jurisdiction. It is usually under the control of the
Ministry of Commerce. Files with all statutory
documentation, such as certificate of shareholders,
directors, and so on are kept at the Registrar for
all companies. The public has a right to view these
documents without providing any reasons whatsoever,
for a minimal fee. The law gives this right to the
public so that people may make informed decisions as
to whether to invest in any given company or lend it
money. The reasoning is that since the shareholders
have limited liability, the public should at least be
able to examine the legal structure of the company
prior to making an investment decision.
However, and fortunately for those of our clients who
wish to conduct their business in anonymity, the
legislature of most offshore jurisdictions also allows
for nominee shareholders and directors to be used. In
essence, this means that it is the nominees' names
that are on public display, and not the names of the
real owners. It should be taken into account that
absolute anonymity is impossible in cases where there
are criminal proceedings pending against the company.
The names of the beneficial owners will be revealed
only upon a court order from the Supreme Court. Some
of the reasons for such proceedings may be dealing in
narcotics, weapons, radioactive materials or other
criminal activities. As a rule, inquiries from foreign
tax or customs inspections have no jurisdiction over
such companies and as such no information is revealed.
4.1.1.
Nominee shareholders
are able to hold shares on behalf of the real owners
thanks to the concept of trusts, which was originally
elaborated by English Common Law and goes back to
medieval times. A trust is an arrangement whereby a
person (physical or legal) called a trustee is the
disclosed owner of property, but holds it on behalf of
and for the benefit of another, called a beneficiary.
A written instrument called a Declaration of Trust or
a Trust Deed usually creates trusts. Any third party,
which wants to find out the identity of the owners,
will only see the names of the trustees.
For secure ownership the following documents are
provided by the nominee shareholders to the beneficial
owners of the company:
1. The Declaration of Trust.
This
document signed by the nominee shareholders certifies
that they hold the shares on behalf of the beneficial
owners and lists their responsibilities in doing so;
they can not vote with the shares, they can not pay
dividends, they can not transfer or mortgage the
shares, they can not increase the share capital etc.,
except with the written instruction of the beneficial
owners.
2.
A pre-signed Instrument of Transfer
is a document by which the trustees in effect transfer
the shares back to the beneficiary. This document is
pre-signed by the trustees but not dated. All the
owner has to do to remove the trustees from the legal
structure of the company is to sign the Instrument as
the acceptor of the shares and inform the Registrar of
Companies of the change.
3.
The original share certificates that also belong to
the beneficial shareholder.
Extracts from the Declaration of Trust:
"
We undertake and agree not to transfer, deal with or
dispose of the said shares or any of them except as
the owners from time to time direct. And further to
give full effect to the trust hereby declared we
hereby deposit with the owners the certificate for the
said shares together with a transfer there of executed
by us in blank and we hereby expressly authorize and
empower the owners at any time to complete such
transfer by inserting the name or names of any
transferee or transferees and the date of the transfer
and to complete the same in any other particular.
And we declare that this authority is irrevocable by
us.... And we further undertake and agree to exercise
our voting power as holders of the said shares in such
a manner and for such purposes as the owner(s) may
from time to time direct or determine.
Extracts from the pre signed instrument of Transfer:
"...
and we (PPB INC trustee companies) hereinafter called
the transferors as per declaration of trust dated
(date) do hereby transfer to (names of client)
hereinafter called the transferee, the shares shown
in the schedule hereto held by us in the undertaking
called (name of offshore company) to hold unto the
said transferee(s) his / their executors,
administrators and assignees..."
4.1.2.
Nominee directors and secretary
Similar to the trustee (nominee) shareholders, nominee
directors and secretary may also be used, in order to
achieve full anonymity. These are individuals, or
legal persons, who undertake the functions of these
positions, in order to provide anonymity for the
client. It is understood of course that these persons
can not possibly be as familiar with the business of
each individual client as the client himself is, and
as such act only, and strictly, in accordance with the
wishes and instructions of the client.
It should be pointed out that there is no such term as
nominee in the eyes of the law. As such, directors
even if acting as nominee, nevertheless are legally
responsible for the activities of the company.
Therefore, directors should approach their posts with
full awareness of the responsibilities and obligations
that go with them.
For total control of the company by the client upon
their appointment, the directors and secretary should
give to the real owner resignation letters, signed but
undated. Also the nominee directors and secretary must
confirm that they are prepared to cease rendering
their services upon a request from the owners. In this
way, the owner may remove them from these positions at
any time he sees fit. Thus, as we look at the nominee
structure as a whole, the client is simultaneously
provided with total anonymity on one hand, and full
freedom to effect changes in the legal structure of
the company on the other. All the documents proving
ownership and anonymity, yet enabling him to alter the
structure, are in his possession.
Extract from the undated and pre signed resignation
letters:
" ...
I hereby give you notice that I wish to render my
resignation as a director of your company as from
today, due to other commitments.... "
We have therefore considered the two issues that any
client should normally consider;
•
the secure ownership of the company for the client in
relation to the nominee shareholders
•
the ultimate control of the company by the client in
relation to the nominee directors
It is also important that those making use of offshore
companies with nominee directors and nominee
shareholders retain an established and reputable
management company like PPB INC to provide these
services.
There are two additional agreements that govern the
relationship between the management company, nominee
directors and nominee shareholders on the one side and
the beneficial owner and client on the other.
1.
The first document is the engagement letter that lists
all the work that the management company will carry
out for the company, like accounting, auditing and
filing the relevant tax applications if necessary, and
sets out the responsibilities of the nominee directors
and nominee shareholders to act in accordance with the
clients' instructions.
Extracts from the engagement letter:
" ...
in the provision of services referred to the above, we
shall not be liable for any loss to the company
however we shall be responsible if those losses arise
because of any willful and individual fraud or wrong
doing by our side"
2.
In the same manner that the above documents protect
the client, the indemnity letter signed by the owners
of the company will protect the nominee directors and
nominee shareholders, in the event that the beneficial
owners of the company engage in illegal, criminal and
fraudulent activities that will in any way endanger
the nominee officials of the company. It is quite
logical for the nominee directors not to be
responsible for matters beyond their control.
All client information is securely kept at the PPB INC
head offices in Nicosia, Cyprus. All service and
administration of the clients take place from the head
office, in this way guaranteeing confidentiality and
total discretion. No information regarding clients is
kept at any office other than the central office in
Limassol.
PPB INC POLICY
•
We maintain confidentiality –We recognize
confidentiality as a privilege and even within the
firm we only divulge sensitive information on a need
to know basis.
4.2. Low
or no taxation
The offshore jurisdictions offered by us allow our
clients to run their business in an atmosphere of very
low taxation, or no taxation at all. There are many
types of taxes imposed upon businesses in high tax
jurisdictions, such as income tax, VAT, tax on
turnover, tax on salaries, tax on dividends, municipal
taxes, defense taxes, road taxes, fire-fighter taxes,
real estate taxes, and so on.
When we speak about no tax, we mean it. Our no tax
jurisdictions, such as Bahamas or Gibraltar do not
impose any of the above taxes. A company registered in
such a jurisdiction pays no tax whatsoever of any
kind.
If we look at jurisdictions with low tax, we are
talking always about a tax on the actual net income of
the company. A jurisdiction with such a tax is
Cyprus, where the tax is 10% on net income. Net income
is calculated by subtracting from revenue all expenses
incurred by the company in connection with the running
of the business. This includes cost of goods sold,
salaries, travel and hotel expenses, and entertainment
of clients, professional fees, commissions and so on.
There are no limits, other than reasonableness, for
these expenses. Further, salaries themselves are not
taxed at all if the company's personnel is located
outside Cyprus.
Yet other jurisdictions, the Isle of Man for example,
impose a fixed tax (STG750, or USD 1,275) on a
company, regardless of its profits, or losses for that
matter.
It should be added that the company as a legal person
is a legal subject of the country in which it is
registered. As such, it is subject only to the laws of
that country, notwithstanding the citizenship of its
owners, its field of activity or other factors.
Moreover, it is not obliged to register with the Tax
Inspection of any country other than the one where it
is registered.
No wonder that thousands of businessmen and companies
utilize offshore companies for international tax
planning, including world renowned multinationals such
as Pepsi Cola, Tetra Pak, Barclays, RJR Nabisco and
others.
4.3.
Exchange control
In all of our jurisdictions without exception,
offshore companies are not subject to any exchange
controls whatsoever. Say, if a company holds an
account in a Cyprus bank, it can receive funds in cash
or non-cash, in any currency, and also make payments
to any person in any country, or make cash
withdrawals, without any explanations or documentation
whatsoever required by the bank. Thus, the company
operates in a completely unrestricted banking
environment.
4.4. Secure political and banking systems
after the emergence of newly independent countries on
the territory of the former COMECON bloc there has
been quite a number of bank failures, and outright
pyramid schemes, which has cost the public an
immeasurable amount of lost savings and earnings.
Unfortunately the described processes have not ceased
up to the time of the present publication. In summer -
autumn 1998
Russia's
economy was shattered by severe economic crisis. This
depreciated rouble capitals and led to multiple losses
and bankruptcies. The clients of PPB INC in their
majority do not rely only upon their rouble accounts
or state securities. It is the offshore structures'
activity that allows a company to overcome the
hardships of the crisis and stand against its
consequences with greater success than its
short-sighted competitors.
Yet it is not only shaken Eastern European economies
which are suggestive to businessmen regarding the
achievement of safe haven status for their capital.
Banking systems in most developed countries invariably
are on the side of the tax inspector when it comes to
the information access to client records. As such,
securitization of one's business interests and assets
has for years attracted businessmen and wealthy
individuals long before Eastern Europe became a free
market.
Jurisdiction categories: Cyprus, England, Delaware –
USA, Bahamas, Isle of Man, Gibraltar.
5.
JURISDICTIONS
5.1.
Making the right choice
When choosing a jurisdiction in which to register an
offshore company, the client should very carefully
consider the various parameters of different
jurisdictions. One could of course collect over time
volumes of materials and publications on the subject,
yet likely the most effective and reliable way to make
this decision is to consult with professionals dealing
with this information on a day-to-day basis. PPB INC
experts will be glad to assist you with this decision.
Some of the basic factors that potential clients
should consider prior to the choice of the offshore
jurisdiction of their company include the following:
•
Suitability for present purpose and function of the
company
•
Respectability
•
Double tax treaty network
•
Legalization of documents with respective embassy and
apostilled documents
•
Tax regime of the offshore jurisdiction
•
Set up and annual operating costs
•
Disclosure requirements as per offshore jurisdiction
Suitability for present purpose and function of the
company
Will a company registered in a particular jurisdiction
fulfill the requirements of its future use? For
example:
•
A client trading with European multinationals, will
probably choose a company from a prestigious
jurisdiction, such as
England or Cyprus.
