If you have already decided that you want to set up your business in an offshore financial jurisdiction but you are unsure as to which country you should look at setting up in then this article is for you. Utilising the five factors that we list below in your decision making process when selecting an offshore jurisdiction will help ensure it fits your company’s specific needs.
Costs are one significant factor to bear in mind when deciding on the best offshore jurisdiction for your business. How much are you willing to pay to be in a premium offshore jurisdiction and have you researched what both your initial setting up and running costs are. These are a few of the questions that you should have answers to when looking at offshore jurisdictions. You should consider consulting with a reputable Corporate Services provider before making any firm decisions on where to set up your company.
2) Political and Economic Stability
It should go without saying that having your business in a stable political and economic climate is an undoubtedly positive factor for your long-term viability. Setting up your business in a jurisdiction with great tax incentives and low set up and running costs is a great idea but not if what comes with it is an extremely chaotic economic and political climate.
Being in an unstable location can make it very hard to make effective short, medium or long term plans for your business. Ensuring your business is set up in an offshore jurisdiction with good economic and political stewardship is almost priceless to your company’s success because it allows sound, successful strategic planning and day to day operations to occur. In addition there is the factor of not having to worry about wild currency fluctuations and creating effective currency hedging strategies when it comes to remitting business income to your home country.
3) Investment & Double Taxation Treaties
It is very critical to research whether your home jurisdiction and where your offshore company is set up has a double taxation treaty as this can result in significant amounts in tax payments being reduced. Not being taxed on business income, dividends or royalties are some of the benefits that can accrue by selecting a jurisdiction with great double taxation treaties with the home of your business operations.
There are a number of countries with a extensive range of double taxation treaties in the Caribbean and Latin American region. You should utilise a firm with expertise in this area so that you are aware of all the benefits and challenges associated with each jurisdiction’s taxation treaties with your home country.
The details of investment treaties are very important to know for your business as not only are they fiscal incentives involved but in some treaties it is possible to resolve disputes through arbitration rather than litigation.
4) Tax Rates
Tax rates are of clear importance because it has a direct impact on how much of your business income your company will be able to remit back to your home jurisdiction. It can be a balancing act finding a jurisdiction with a low or zero tax rate and also in that offshore jurisdiction ranking highly in the other five factors we have listed.
5) Offshore Jurisdiction Reputation
Low or even no taxes may be a great fiscal incentive for your business to set up in a specific offshore jurisdiction but don’t be fooled by bright, attention grabbing enticements. Do thorough initial research to see what jurisdictions are on the global financial blacklist.
Having your business in such a location will very likely give your business problems internationally. Your company’s reputation is worth more than zero taxes or no required financial reporting.
We hope this article was of benefit to you when it comes to deciding what locations you should look into being the best offshore jurisdiction to meet your needs. If you require our expertise in assisting you move or set up your businesses in an offshore jurisdiction email us your queries at email@example.com and we will be in touch with you within 24 hours. To find out about our full suite of corporate and legal services visit our website www.ibcservicesbdos.com