OFFSHORE INVESTMENT HAVENS

The Strange Disappearance of 100,000 American Millionaires

Offshore Companies - Useful Information

Holding Companies

A holding company by its very definition is a company whose business it is to hold shares in and to exercise management and control of other companies. Its uses include the collecting of dividends from the subsidiary which may in turn be reinvested free of tax. In the event of the sale of the shares in the subsidiary to a third party, profits are maximized there being no taxes payable on such sale.

Personal Investment Companies

The business of this kind of company is to invest in securities on behalf of its owners. Its major asset is usually a securities portfolio from which it will earn profits from trading and dividends in a low tax or no tax jurisdiction.

Import /Export Companies

These types of companies are ideal for transfer pricing strategies. Of course there are several variations to strategies but an illustration will suffice. Instead of buying inventory through an onshore company direct, goods may first be purchased by the offshore company which in turn sells the goods to the onshore company at an inflated price. The majority of the profit therefore remains in the offshore tax free company while the onshore company will operate at a loss and may even become entitled to the special tax concessions and/or government subsidies.

Shipping Companies

A company operating ships or aircrafts will incorporate in a jurisdiction under whose flag the ship operates thus avoiding direct or indirect taxes.

Professional Service Companies

These companies allow professionals to secure their income offshore as professional fees are paid directly into the offshore corporation, which company will in turn pay the professional some meagre sum for tax reporting purposes.

Intellectual Property Holding Companies

The use of this type of company is ideal for a developer or purchaser of intellectual property. The owner of a design or other intellectual property when sold naturally shall be entitled to royalties upon its reproduction. Those rights should be sold to the offshore company which will in turn license onshore companies to distribute the same . The offshore company may then receive the royalties from the onshore companies direct and the moneys once paid is tax free.

Finance Companies

A common use of an offshore holding company is to fund a secondary company through loans in circumstances where the secondary company is located in a country that allows for the deduction of interest on such loans as a business expense. This strategy enables a group of companies to in effect lend money to itself and collect interest income in a zero-tax jurisdiction while at the same time allowing the onshore government to subsidize interest earnings. Your local agent can facilitate the opening of your bank accounts in a climate of absolute confidentiality. The offshore banks that we recommend are ideally suited in that they offer just the characteristics and facilities your company demands:

• correspondent banks in major- currency countries
• SWIFT global clearing system capability for bank to bank transfers
• offers cash card/debit card/credit card
• accepts cash deposits
• requires minimum references
• accepts instructions by mail/fax/phone
• computer records are held in-house
• reasonable bank charges
• will accept a power of attorney from local agent to transact account business on your behalf

The banking services offered will usually include:

• Call Accounts
• Current Accounts
• Saving Accounts
• Certificate of Deposits
• Money Market Accounts

Requirements

• Completed resolution authorizing the appointment of bankers
• Bank Reference
• Copy of identification page of passport or drivers licence
• A minimum deposit of US$1000.00
• Specimen signature
• Verification of residential address

Most agents will facilitate this by:

• Preparing all mandates and resolutions
• Submitting the full application to the bank
• Ensuring the swift completion of the process by the bank and advising the client of such completion.
• Facilitating communication between client and bank with respect to the account
• Receiving on the client's behalf all bank statements and advices issued by the bank