How To Open An Offshore Company With 4 Steps

w3raju October 1, 2020October 1, 2020

How to open an offshore company? Just 4 steps below, we hope you get good preparation for what you need to do before moving.

Step 1: Choosing a company structure

One very first step in setting up your offshore company is to determine an appropriate company structure. There are three common types of business structure that you may consider when going offshore:

International Business Company
Limited Liability Company
Private Limited Company

Each business structure has its striking features and can bring different benefits to meet the expectations of one company. For example, opening an international business company is widely chosen by virtue of its simplified maintenance obligations for businesses. A limited liability company, on the other hand, becomes stand-out among others as its business owners can expect high-level protection for the company’s assets.

BBCIncorp stated in one of its relevant articles: an LLC is “a hybrid of the corporation and the partnership” and with this structure “members are not personally liable for debts or liabilities of the business”.

The last type of business entity in question is a private limited company. It is one popular type in reputed offshore jurisdictions like Singapore or Hong Kong. This type restricts its number of shareholders to be no more than 50 and limits them from publicly trading shares. But great tax advantage is what can make you attracted by this commonly-accepted structure.

Step 2: Picking your ideal offshore jurisdiction

Are you looking for a best-in-fit offshore location to your company? If yes, you are going to the correct direction. The second step on how to open an offshore company is picking the offshore jurisdiction.

Below are some quick notes that will help you better determine your choice of offshore jurisdiction:

Your choice of place should first and foremost, meet your business goals and capabilities.

Secondly, do consider the soundness of your choice of jurisdiction. If you are living in a country in which you witness an economic downturn or financial crisis on a regular basis, then we do not think you would get in your mind an idea of moving your business to the “same place”.

Thirdly, think of the power and tendency in the business world. Incorporating an offshore company does not take your business out of this fact. Suppose your company’s goal set out something relating to expanding to the EU market, you should take notice of “economic substance” rules. Please make sure that you have updated and at least once heard of this top-concerning term when it comes to preparing for the offshore journey of your business in Belize, the BVI, or many other offshore countries.

Note that where you come from can also be a crucial factor. One’s country of residence may fall in the blacklist of some offshore countries, thereby affecting your chance of incorporating an offshore company there. If you are unfortunately on this list, there is a high possibility that you are OUT.

For example, if you are looking for a pro-business and favorable tax market where to develop the fintech sector, Singapore and Hong Kong are highly recommended options for you.

Or, in case you want to seek a traditional offshore financial hub to reap benefits from stronger asset protection and confidentiality guarantee, you can consider Belize or the British Virgin Island.

Step 3: Decide on your company name

You have to select an eligible company name. The eligibility is satisfied if your proposed company name meets certain requirements as below:

It is unique and should not be similar to other existing company names which are listed at the Company Registry;
It shall not involve banned words or government agency related phrases such as Bank, Assurance, Insurance, Foundation, Casino, Fund, Royal, University, Trust, etc.
It must follow specific naming requirements (how the name should be ended) upon each type of business entity.

It is good to know that there is a name-checking tool available to help entrepreneurs and start-ups know which business name has been in existence.

Step 4: Prepare and submit required documents

Documents required to register one offshore company can be different among jurisdictions. In general, you should prepare some basic copies of the following papers:

Passport;
Residential address proof;
Company description and business review;
Certificate of Incorporation;
Memorandum and articles of association
Registers of Board of Directors;
Additional documents as requested.

Be advised that the last three documents are often required for the applicants whose companies have shareholders being a corporate body.

Typically, the Registry of Company is the statutory body to which you should submit needed documents.

For a better understanding of how the setting-up procedure should work on your case, feel free to engage a trusted incorporation service provider like BBCIncorp to save your time and resources!