How to Set Up an Offshore Company

Summary: This guide has been written to explain all the features and benefits of offshore company formation. It has been designed to help you decide whether incorporating in this way is right or you. It includes the 'how to' information that you'll need if you decide that you'd like to go ahead and establish a business offshore.

What types of offshore company are available?

The following three types of company are the main types on offer in the offshore jurisdictions most commonly used for offshore company formation: -

1) Company having a share capital - These companies issue shares, and once the initial cost of a share (both capital and premium) has been paid, the shareholders have no further obligation to the company. 

Subject to the rules of the individual company from this point on the shares can be sold or transferred, and the shareholders have the right to enjoy any profits from the company and any proceeds of a liquidation.

2) Company limited by guarantee - the individual members of the company agree to pay up to a maximum ‘limit’ in the event that the company becomes insolvent. 

The members may acquire certain rights against the company, such as the right to take a dividend, and all the specific rights will be set out in the rules of the company upon its incorporation. 

Membership of the company may terminate on death, and this type of company, also called ‘guarantee company’, has been used by many ‘not for profit’ organisations. 

There are also some highly sophisticated estate planning schemes in place which make use of this type of guarantee company to limit the death taxation or inheritance tax liability an individual’s estate will suffer.

3) Cell companies - some jurisdictions permit the formation of cellular companies. 

The assets and liabilities of this company type are separated into “cells”, in such a way that the assets in one cell cannot be used to satisfy the liabilities of another cell.

What can an offshore IBC be used for?

IBC’s are chosen by many individuals and corporates nowadays for: -

- international trading
- offshore investment
- purchasing and owning real estate abroad
- ownership of intellectual property
- protection of certain asset classes
- employment of overseas placed staff
- efficient tax planning
- offshore e-business

This list is not exhaustive however, it is meant to offer some examples of ways an IBC can be used. 

If you have a specific requirement and would like to know whether incorporating offshore can satisfy that requirement I would suggest you get in touch with one of the major suppliers of offshore company incorporation services on the internet. 

Alternatively you can always with your requirements and we will attempt to find out the information you require. 

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