Many people associate the word "offshore" with tax evasion
or other more serious criminal activities. While it is true
that people from this element of society are intimately
interested in offshore for the privacy benefits that can
shield their illicit activities there are also legitimate
and completely legal reasons to pursue the formation of an
offshore company.
What is Offshore Company Formation?
Forming an offshore company simply means incorporating a
business in a country other than the one you reside in. It
does not have to mean incorporating in a tax haven. You
can incorporate a business in the UK which would be
offshore to you if you lived in Canada for example.
The media at large has had a field day with the offshore
industry and in particular, tax havens, seemingly only
reporting about them when a serious crime has been
uncovered. It stands to reason since these tax havens
promote privacy that they really have no recourse to fight
back in the media since drawing attention to themselves and
their clients is exactly the opposite of their intention.
Why Form an Offshore Company?
There are a number of positive benefits that can be
realized through offshore company incorporation. The
lion's share of people that are drawn to offshore company
formation are seeking greater privacy in their financial
dealings, increased layering for asset protection purposes
and a reduced tax burden on capital gains.
Forming your business offshore does not preclude you from
paying your fair share of taxes on income in your home
jurisdiction. The advantage of having an offshore business
is once you have paid the taxes in your home country and
moved this money to an offshore tax haven, your money can
grow there tax free. In general, tax havens will not
charge a capital gains tax nor will they tax foreign
derived income.
Why Incorporate in Panama?
Incorporating a company offshore also provides many privacy
benefits in your financial dealings. Specifically, the
Panama IBC, can be incorporated in bearer share form. This
essentially means that ownership of the company is
anonymous and can be changed simply by passing the share
certificates to another person.
Bearer share corporations can own real estate, boats, cars,
bank accounts, trading accounts among other assets. This
"anonymous" ownership provides a layer of privacy in that
your personal name is not associated with any of the
transactions for the business nor in any public registry.
Panama also offers the ability to layer asset protection by
having a Panama foundation own the corporation. As with
the bearer share corporation the Foundation ownership can
remain private and is virtually untouchable even by the
court system since Panama foundations have no owner.
Depending on what services and level of privacy protection
you desire there are quite a few different scenarios you
could pursue when considering Panama to form your offshore
company.
The first step would be to do some internet research trying
to identify good sources of unbiased information about
offshore company formation in general and then specifically
about Panama. As you research you will start to get a feel
for the industry in Panama as well as identify potential
service providers.
It cannot be stressed enough that incorporating your
company through a Panama law firm or lawyer is the best
method to ensure your corporation is created in the proper
way. When dealing with a law firm your communications are
covered by attorney client privilege which provides you a
layer of privacy protection that cannot be offered by other
companies that will perform the formation duties on your
behalf.
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To learn more about the offshore services industry or
panama company formation please visit the author's website:
http://www.offshorelegal.org/
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