Typically, an offshore holding company is set up to passively hold shares of another company. Although an offshore company is very flexible and can be integrated into a wide variety of business arrangements, it is typically not a company used to operate a business.
Advantages of setting up an offshore holding company is that if you incorporate it in the right structure you are able to minimise withholding taxes when dividends are paid to the holding company, and you can potentially receive such passive income free from tax. Furthermore, an offshore company can be easily used for your very own privacy motives. If you are not keen to show that you own a particular business, you can choose to set up your offshore company to be used solely as a holding company as typically, offshore companies are incorporated in jurisdictions which do not have a public register of directors, shareholders or ultimate beneficial owners.
In few words, offshore holding companies are synonym of reduced tax and high confidentiality. Having said that, an offshore company formed in a tax-free country does not mean it goes above complicated tax regulations that are in force in your own country, which would normally be a high-tax jurisdiction. But a clever use of an offshore company can reduce or completely eliminate tax that would be otherwise payable. Incorporating in such offshore jurisdictions which are tax and hassle free allows start-up businesses to grow faster.
Having said this, we recommend to anyone who is considering to incorporate an offshore company to get expert advice located in one’s own country of domicile.
As company incorporation experts, Fairwinds Management is able to incorporate your new offshore holding company in jurisdictions such as Seychelles, Belize, RAK (Dubai) and also other locations. Contact Charlene Sciberras on firstname.lastname@example.org for more info and a quotation.