GFS provides offshore incorporation services. GFS will incorporate your company in an offshore jurisdiction and we will assist you with an offshore merchant account for credit card processing. GFS has been providing offshore services for over 15 years. In conjunction with affiliated experts located around the world, we provide a vast array of business services. Bellow are some of the more common offshore topics.
Popularity Of An Offshore Corporation
The growing interest in the United States and other countries regarding the use of offshore entities is a result of the following:
- More favorable business legislation offshore
- Global banking needs such as abilty to accept credit cards
- To develop an international market share
- Ability to invest in global securities
- Increasingly litigious nature of society
While there are various offshore entities to address the above issues, we will discuss the International Business Company ("IBC") throughout this website.
Selecting an Offshore Bank
When selecting a jurisdiction for banking you should make sure that the laws governing banking prohibit the release of information regarding client accounts. In addition, you should make sure that the jurisdiction has high rated world banks as many offshore banks are not insured by the government. Even if a bank is insured by the government, you should still be cautious as the government may not have the ability to bail the bank out and indemnify account holders in the event that the bank has financial difficulties. Obtaining quality insurance on financial accounts is the main reason that US citizens are hesitant to take money to offshore banks. It is difficult to obtain a similar FDIC insurance on offshore bank accounts.
How And Why To Utilize An IBC Or Offshore Corporation
An IBC or international entity which is often called an offshore corporation can be used to expand business activities internationally, develop an international presence, hold assets, invest globally, achieve privacy, segregate high risk assets from more secured holdings, and conduct business while remaining anonymous. While these are only a few of the advantages to using an International Business Entity, there are many others.
An IBC or other international entity is used by many companies to take advantage of jurisdictions with more lenient banking underwriting guidelines and business legislation . Further, an offshore company is required if a company needs an offshore banking relationship such as a merchant account to accept credit cards since an international business presence is often required by the credit card agencies such as Visa. Below are examples of industries which take advantage of offshore jurisdictions:
High Risk Industry
Casinos, sportsbooks, Travel, adult entertainment, pharmacies, health products, and other industries set up entities offshore due to various jurisdictions either prohibiting these activities onshore or not having favorable business
legislation in their home jurisdiction. Also, some businesses can not obtain a merchant account to accept credit cards onshore due to their banks not accepting their type of business or volume. As such, companies will open an offshore merchant account or a high risk merchant account to meet their business needs.
The high risk industries typically operate their business over the internet. Therefore, the need to obtain online credit card processing services from a merchant account provider that provides services worldwide is necessary to the success of their business.
Financial Industry
Financial service businesses such as banking, trustee services, mutual funds, and brokerage firms often start operations offshore as capital, licensing, experience, tax and reporting requirements are less stringent in offshore jurisdictions.
Selecting an Offshore Jurisdictions
The International Business Company ("IBC") is an offshore corporation that may be established in jurisdictions throughout the world. Prior to selecting a jurisdiction in which to incorporate your company, you should determine whether the jurisdiction has the following: legislation governing the type of business you are considering (i.e., legality, necessary licensing requirements, etc.), banks that will enable your business to facilitate business transactions (i.e., credit card processing services if your company will be accepting credit cards for payments from customers), a well established financial infrastructure, quality professionals, tax or financial disclosure requirements, political stability , and reliable communication infrastructure.
There are many jurisdictions in which to incorporate your offshore company. Each jurisdiction has different company structures and laws regulating the business activities and operations of these entities. We will discuss some of the characteristics relating to a business entity such as an IBC. Other company structures exist in these jurisdictions and should be considered prior to incorporating an entity.
Some of the popular offshore jurisdictions include:
Procedures On Operating an Offshore Corporation
Procedures on operating an IBC vary from jurisdiction to jurisdiction. This variation is the reason individuals and companies take their business offshore to take advantage of the more lenient business legislation. Some of the common procedures that are necessary to begin operating an IBC are as follows:
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File the Articles of Incorporation in selected jurisdiction
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Hold a meeting and elect your directors and officers
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Establish and accept the company's By-laws
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Establish financial accounts such as bank account, brokerage,
merchant account,
and credit/debit cards
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Fund the company based on investor and legislation capital requirements
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Obtain the necessary licenses, bonds, and government
approval
prior to establishing an IBC, It is necessary for you to obtain the advise from an attorney or consultant who is knowledgeable in the offshore industry as well as your countries tax and reporting requirements. Contact us for a free consultation.
US Citizens Should Consider The Following When Considering Going Offshore
You should not utilize an IBC if the following exists:
- Threatened or pending litigation
- Your liabilities exceed your assets
- You have insufficient funds to pay all of your creditors
- Your main reason for going offshore is for tax avoidance
Before contemplating obtaining an IBC, you should consider:
the Fraudulent Disposition Act. If assets are transferred offshore to avoid creditors, a criminal offense will have occurred. Not only will you be charged with fraud in the United States, but also the laws in many offshore jurisdictions will consider the transfer an illegal transaction and will allow the veil of secrecy to be pierced.
Further, if you are considering going offshore to not pay taxes as the jurisdiction you plan on incorporating in is a no tax jurisdiction, you will still be required to pay taxes in the USA as US citizens are required to pay taxes on worldwide income. If you believe that your business will qualify for certain tax breaks, you should speak with an international tax attorney to confirm this prior to moving your business offshore.
On the other hand, if none of the above situations exist, then an IBC is an excellent vehicle for privacy, global diversification, and international business activities.
