OFFSHORE OR ONSHORE?
Every businessman has thought about ways and means of tax optimization and protection of the capital, including through the use of an offshore company. Also, anyone who has decided to put their money into a safe foreign bank and have easy access to them 24 hours a day, understands the need in the offshore (acceptable spelling both ofshore, and offshore (in Russian), it is derived from English. Offshore is “off shore”, ” outside the borders “). Onshore is interesting too, it is opposed to offshore (translated from English – “within the shore,” “inside the borders”). This is a company registered in the territory, not providing tax benefits, irrespective of the fact where the company carries out the activities in the territory or not. For example, European countries are the onshore jurisdictions.
The incorporation of a foreign company makes its owners free of the international investment and financial services. Most offshore and onshore companies are used to obtain credit and debit cards. The carrying of trade with Russian and offshore companies also enjoys the great popularity. In this case the latter is usually incorporated in this offshore area, where companies are fully exempt from the taxation (Seychelles, British Virgin Islands, Belize), where the strict confidentiality is kept, the information about the founders, directors and the organization’s activity is not disclosed, and the management of the company may be implemented with through general power of attorney.
If offshore provide benefits mainly for active foreign economic activities related to export of goods (works, services), loans, etc., then Russia’s legal entities is an indispensable business tool for every day. Nevertheless, for a variety range of operations related to international trade and the disinvestment, foreign offshore companies are simply irreplaceable. Pragmatic time dictates its conditions to the complexity of business structures and the implementation of various schemes with the participation of companies from different jurisdictions. Today it is difficult to carry on business with the company only in Russia, or with only offshore abroad. Based on the proposed objectives, it is necessary to think over a mechanism for optimization of costs. Thus, in Russia companies with foreign investments are prevailed, where the share of a foreign member (shareholder) consists of not less than 10% of the authorized capital. The founders of this company can be both physical and legal persons. Given the nuances of the legislation, such companies can be provided by various tax systems and use them for different purposes and objectives.
Modern economy is inconceivable without the offshore business. Companies in foreign jurisdictions are used in all spheres of activity, namely: international, investment, holding, banking, river boat, transport, insurance, finance and leasing. The main goal is to minimize taxes and protect the capital. For reference: more than 65% of hard currency of the world is kept in offshore banks, about 40% of financial transactions, ensuring the trade between countries is made through offshore financial structures.
The main directions of using of offshore and onshore companies:
• Offshore Company as a holder of bank account
• International commercial activity
• Investment activity of offshore companies
• Offshore Holding Company
• Offshore Leasing Company
• Activities in financial and stock markets
• Administration of property
• Intermediaries in the rendering of services
• Protection of intellectual property, licensing and franchising
• Confidential probate of wills
• Payment of customs duties exemption depositing in the authorized capital of a joint venture, etc.
Incorporating a foreign company, you can significantly minimize the taxation of your local company on absolutely legal grounds. As the result of the interaction of these companies it is actually possible to reduce to zero the profits tax, as well as significantly to reduce the size of social and income taxes. Offshore companies permit to reduce the cost of maintenance of local companies, as well as to increase their profitability. The taxation system in Russia creates many problems, leaving the stability and perspective of profitability growth. Foreign companies have long used reliable and effective methods of optimization of taxation, i.e. legal measures directed to reducing the tax costs. Careful tax planning helps to increase the profitability of the company and to raise its status, which is very important for further development and prosperity of your business.
