An offshore company is simply a company registered in a jurisdiction other than the one where you live. It does not have to be a tax haven.  For example, if I lived in Canada, I could incorporate an offshore company in Mexico.  I may not actually want to do that but it would fit the definition of an "offshore company".

The big press outlets and government propaganda machines of the world may have a field day ripping apart the offshore banking and offshore incorporation industry for being full of criminals. Despite what these sources would have you believe not everyone who utilizes offshore services is a drug dealer or money launderer.


There are many legitimate reasons to incorporate a company in an offshore jurisdiction which I have summarized into a short list below:

Top 6 Reasons To Incorporate An Offshore Company

1. Increased personal privacy -- when conducting financial transactions your company name appears on transaction records, debit cards etc.
2. Greater anonymity -- when using nominee directors, bearer shares (not all jurisdictions allow bearer share corporations) it is difficult to find out who actually controls a company
3. Limited liability with little or no paid upfront capital requirements -- setting up an offshore company is not cost prohibitive in most jurisdictions
   
4. Legal tax exemptions and lower tax liability -- by  utilizing a tax haven your company is subject to a more advantageous set of tax laws
   
5. Costly court procedures -- multiple jurisdictions, laws and court systems makes legal battles more costly and difficult to fight against you
6. Ease of operations -- since the reporting requirements and legal restrictions are far easier to adhere to offshore you need less resources to run your business making it less expensive to operate