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6 Advantages of Offshore Setups to Your Business

You’re probably privy to the term “offshore” but to put things in proper context, offshore basically means being located beyond one’s national boundaries. Setting up an offshore company is a strategic way of expanding one’s business operations internationally.

Another common reason that companies go offshore is that it allows them to take advantage of laws that are not available in their original jurisdiction, but offered by foreign countries where they have chosen to set up their business. These include provisions for tax savings or asset protection from lawsuits.


In return, foreign nations make themselves attractive for offshore investors to generate revenue through filing fees collected from offshore companies.

Advantages of Setting Up an Offshore Office

The following are some of the benefits that offshore companies can offer your business. These advantages have also paved the way for offshore businesses to gain a foothold in many industries across the world.

  1. Tax Savings

Offshore companies are formed in countries with minimal taxes or none at all. Countries in this category are also known as tax havens. One perfect example of a tax haven is Ireland.

Since 1980, Ireland has been home to Apple Operations International (AOI), the primary offshore holding company of Apple, designated to serve as a cash consolidator for a number of Apple’s offshore affiliates.

AOI does not hold a tax resident status in Ireland because under Irish laws, a company only becomes a tax resident of Ireland if it’s being managed or controlled in Ireland. Thus, legally speaking, AOI is not subject to pay any corporate income to the government of Ireland, which gives Apple an excellent workaround in saving billions worth of taxes.

  1. Tax Deferment

Offshore entities can also benefit from tax deferment, which means you get to delay paying your taxes into the future. If you’re a company doing overseas operations, you don’t have to pay taxes on the profits you make immediately. In fact, you can defer paying your taxes for an indefinite period, even until the time you decide to sell your company. You could then reinvest your tax deferment into your offshore company year after year, helping you roll in cash for your business.

  1. Less State Regulation

Taxes aside, you’d also want to be free from overly strict regulations of incorporating a company. In places such as the United Arab Emirates, Caribbean, Seychelles, and Mauritius, offshore companies can operate under limited corporate regulations that usually relate to the filing of income taxes, currency controls, structural restrictions, and the like. This makes it very friendly for offshore companies to do business in these nations.

  1. Limited Liabilities

Offshore companies may also have limited liabilities in terms of asset protection. This means you can shield your assets as an offshore entity from creditors or potential litigations of a particular jurisdiction since your business was only formed there, but the rest of your operations are not within that country.

  1. Global Reach

Taking your company’s operations overseas, especially those that are doing well economically, can open new and exciting opportunities for your business. It ensures that your organization can widen its presence in the global market, especially now that industries catering to the delivery of products and services to customers are in such high demand.

  1. High-Quality, Low-Cost Labor

Many organizations choose to outsource their business because of the substantial savings they can get from offshore staffing. Finding talent that matches your business’ skills requirement, whether it pertains to technical or soft skills, in an economy where labor costs are modest puts you in a win-win situation.

Your gains are not only limited to the money you’re able to save by cutting overhead costs, but also to the kind and level of industry competitiveness that you bring to the global business market.

 

These are just a few of the advantages of offshoring your business. If you want to get ahead of the competition, then you better work your way toward setting up a business in other location.

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