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Offshore Operation & Management
There are many advantages including: confidentiality, asset protection, limiting of liability in business transactions, foreign property holding through a company in a third country, unrestricted flow of capital, transfer of assets etc.
Confidentiality - Keep business affairs confidential, Offshore Companies offer complete privacy. If the company shares are held by a Trust, the ownership is legally vested in the trustee, thus gaining the potential for even greater tax planning advantages.
Asset Protection - Protect assets in combination with a Trust, an offshore company can avoid high levels of income, capital and death taxes that would otherwise be payable if the assets were held directly. It can also protect assets from creditors and other interested parties. From competitors, adverse claimants and other parties from whom you wish to keep your business interests private and to secure against future claims such as bankruptcy, judgment creditors and other litigants, etc.;
Protect investments in other foreign countries : International Companies can loan funds to corporations in other foreign countries. Investors may set up, but not directly own, an offshore company that loans funds to a development company set up in another country and charge interest rates that will lower tax obligations and protect the long term ability to repatriate investment funds. This can be especially important when working in countries with strict exchange controls and high tax profiles.
Estate Planning - Family and Protective Trusts (possibly as an alternative to a Will) for accumulation of investment income and long-term benefits for beneficiaries on a favorable tax basis (without income, inheritances or capital gains taxes);
Reduced compliance costs - Tax havens, such as British Virgin Islands, allow the formation of International Companies that have no tax or reporting responsibilities, thus allows cost saving not only from the absence of corporate taxes, but also from reduced compliance and other regulatory costs.
International Tax planning - Offshore corporations can contract the services of professionals to employer’s resident in high tax locations or politically unstable areas. This allow employment or consultancy fees to accumulate in a low tax jurisdiction.
An offshore corporation can buy or lease products from one country and then sell or lease them to a company in another country so the profits of the transaction are accumulated in the offshore company where there is no taxation on profits. An offshore company can franchise or license intellectual property rights in other foreign countries allowing the profits to accumulate in a tax-free environment.
*(Original article by ERI，please cite ERI for repost. All rights reserved)
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