There are a great many benefits to be found when considering the incorporation of a company  offshore.

An offshore company or non-resident company, is a company that does not conduct a large portion of its business in the the country it is incorporated in.

Two popular examples of offshore company corporations include a Limited Liability Company (LLC) and a International Business Company (IBC).

No Place Like Panama

Many companies are opting to transfer part or all of their business' operating functions to countries such as Panama, where taxes are remarkably low for foreign investors. Panama also offers a great deal of tax exemptions and deductions that the companies can benefit from which were implemented to encourage outside investment in Panama. In 1994, Panama passed tax Law No. 8, which opened the door a little wider for offshore company incorporations to receive greater benefits from moving their corporations to the country.

Tax Exemptions To Encourage Investment

Some of the benefits that companies can now receive because of Law No.8 include an exemption from import taxes on their materials as well as an exemption on real estate taxes for the business. They can also receive tax exemptions from taxes they may have had to pay for the use of airports and shipyards. These benefits are additional to many of the other benefits that can be received simply by having an offshore company incorporated in Panama.

Offshore companies have the ability to structure themselves so that the business can realize greater profits due to the ability to minimize their tax liability by deferring some of their capital or investment offshore. With the exception of financial institutions, like banks, it is generally a very simple process to set up offshore corporations and maintain them.

Utilize Nominee Directors For Privacy

These companies, when incorporated using nominee directors, are also able to help provide a certain level of anonymity and privacy to a person by performing their transactions under a private company name keeping the company owners name out of the company documentation and transaction records.

Additionally, in most areas where you can set up an offshore company, such as Panama, there are no laws on thin capitalization (again with the exception of financial institutions) and the offshore companies can be formed with a nominal equity investment.

Companies that incorporate offshore can also benefit from the reduced amount of reporting that they must do. This will vary from country to country, but most jurisdictions will only require a certain amount of information from the company to keep it in good standing, helping to add to the level of privacy.

Another benefit of establishing and offshore company incorporation is that most jurisdictions, including Panama, do not prohibit the company from using their own money for purchasing their own shares. This is called financial assistance, and in many places is prohibited by law. When you have an offshore company  you usually do not have to worry about this prohibition depending on where you incorporate.

Incorporating an offshore company can be a great benefit to businesses  whether they are large or small. Generally, a person or company does not need a large amount of revenue in order to establish such a corporation, though the initial cost can vary from jurisdiction to jurisdiction. Invest some time researching offshore jurisdictions to see which one is right for you.  This author likes Panama and the old die hard Switzerland.