Offshore companies can be established in low or no tax jurisdictions. The Emirates fall under the ZERO TAX jurisdiction and therefore has no issues of VAT, Corporation Tax.Tax on rental income, CGT Tax or IHT Tax.
The Emirates of Dubai and Ras Al Khaimah (RAK) are far less restrictive then most other jurisdictions throughout the world, you will generally find that the extent to which company information is required to be reported it is generally much lower then other offshore jurisdictions. Business reporting, account auditing, filing of financial records etc., are much more relaxed and are likely to be far less than you would experience if you incorporated ‘onshore’ or in your home jurisdiction.
It is possible to manage assets and business transactions in such a way that assets are shielded from any form of liability. An offshore company can hold ownership of a multitude of worldwide assets and hence protect against creditors. Transferring title of assets to an offshore company means that the settler (the person who gives up ownership in favor of the offshore company or trust) no longer visibly controls these assets. In this way assets cannot be seized in cases of insolvency, marital proceedings, professional negligence, or by the taxman. Regardless of problems in some countries, offshore companies and trusts, when correctly structured, are excellent asset protection vehicles, and are extremely flexible in times of political and economic instability.
The Emirates has strong Client Confidentiality laws and refuses to exchange information with the Organization for Economic Cooperation and Development (OECD.) By conducting business through an Offshore company and carrying out all transactions in the name of the private company, the name of the underlying Principal of the Company can be kept out of certain key documentation.
Apart from certain types of business – such as: Financial Services companies banking which are internationally regulated, the Emirates make it very simple and highly attractive for Offshore Companies to operate with a varity of activities.
Offshore Holding companies can handle dividend receipts from a spread of subsidiaries. This allows a group to centralize its resources and maximize tax benefits. Careful use of tax treaties is necessary to obtain the best results. Offshore Holding Companies can be used, whereby the holding company can fund subsidiaries in a tax-efficient manner. Legal fees are often significantly reduced and publicity can be avoided for high-profile individuals and families.
An Offshore Company is often used to make Investments and accumulate wealth. Just as an onshore company can invest in stocks, shares, property or commodities. The major difference is that the offshore company does NOT have to pay tax on its profits, nor does it have to pay inheritance tax when it is passed on to heirs. In many jurisdictions, withholding Tax is levied on income remitted out of the jurisdiction, but the careful use of double-tax treaties can reduce or even eliminate tax on the investment income. This may enable the Investor to make investments in high-tax countries from an Offshore base with minimal tax liability. Most importantly, the use of an Offshore Company also protects the identity of the ultimate beneficial owner. Anonymity comes automatically with Offshore Companies, and is respected by the law in the Offshore world.
Placing Property into the ownership of an Offshore Company yields many immediate advantages, including the avoidance of Tax on Rental Income, Inheritance Tax (IHT) and Capital Gains Tax (CGT.) Due to the anonymity of the ownership of the Offshore Company, changes only take place in shareholder-ship of the company in the event of death or re-sale, while title of the property remains with the Company. In other words, the Company can be sold instead of the property.
Additionally, any subsequent sale is greatly simplified. In some countries the establishment of title is time-consuming and costly; but once title has been established for a company-owned property it never needs to be dealt with again. Sales by share-transfer almost always save on legal fees, together with any transfer or value-added taxes that are levied in many countries. Government stamp-duties and capital gains taxes can also be avoided in many cases.
Patents, copyrights, trade marks, franchises and other rights such as those in music, computer software and technical know-how can all be transferred to the ownership of a Offshore Company. An offshore company can enter into license or franchise agreements with the original company owner and then receives Royalty payments and license fees.
Some countries have a preferential tax-rate for manufacturers, and this can be exploited by establishing a manufacturing company in the appropriate jurisdiction and separating the manufacturing parts of the company’s operations from its other functions by basing it in such a free-trade zone of the Emirate. Structured correctly, huge savings can be made.
Re - invoicing, Deferral of Profits, Loans,Debit Factoring and Asset Protection are important areas that can benefit your Company through an Offshore structure.
It’s often advantageous to pass ownership of a vessel to an Offshore Company. As well as securing significant tax benefits, it can also provide an easy registration procedure for yachts, which in certain countries can only be registered on the Major Nnational Register with onerous compliance requirements. A separate Offshore Company may be formed to operate or charter the vessel, thus separating ownership and income for additional tax benefits.
Trusts are often used to safeguard family wealth by imposing conditions on the use and distribution of money and assets by present and future generations. Such arrangements may also replace a “ will ” in certain circumstances. Trusts can be used legitimately to avoid ‘forced heir ship’ provisions affecting inheritance. Inheritance, capital gains and income taxes can all be minimized in this way. For further information on the formation of trust funds please apply directly.
There are many features and benefits associated with the establishment of a non-resident company, and different individuals and organizations have their own specific reasons for incorporating in this way. Your financial affairs are YOUR business and as such, there should be a level of privacy and confidentiality. Going offshore provides these levels and this is one MAJOR FACTOR to consider when carrying out your ‘due diligence.’
Import and Export transactions can be made significantly more tax-efficient if they are carried out through Ooffshore Companies. Using an offshore company as an intermediary between a Seller and a buyer of products or services in different countries allows profits to be accumulated offshore.
Although invoicing is invariably carried out via the Offshore Company, the goods can, normally be delivered direct from seller to buyer. Such devices can be particularly beneficial for transactions between EU countries, with VAT accounting problems solved by registration in a suitable location, such as the UK or Southern Ireland, the onshore company then working in conjunction with an offshore company.
Factoring of debts using an Offshore Company also offers possibilities to move money from a high-tax to a low-tax
The ownership of a portfolio of investments through a single offshore holding company greatly simplifies probate procedures upon the owner’s death. Probate can be applied for in one offshore jurisdiction rather than in several different countries where the assets are located.
One of the fastest growing areas of international trade is the Internet. The international nature of the trading and the potential tax implications of dealing across borders can be solved by the creation of an offshore company specializing in internet trading. To obtain favorable tax treatment, it is best to locate the server physically offshore and to have an appropriate domain name. Although the opinion is often expressed that such operations are ‘all in cyberspace’ and therefore location is not important, it remains
a fact that regulation is increasing and planning should anticipate possible future developments.
“Are you amongst the many millions of expatriates working or living abroad?”
Your priorities will be to secure your income and assets for maximum safety and tax efficiency. There are many advantages that come from being an expatriate. We understand your individual circumstances and potential intrusion from overseas authorities. Personalized advice and support is always on hand, regardless of where you live.
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- Establishment of Trading and Investment Holding Companies
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