Jilian Consultants Co., Ltd.
Jilian Consultants Co., Ltd.

Why Register an Offshore Company?

In recent years, business has become more and more cross-border, and enterprises often use cross-border operations to enhance their strength and expand their business areas. Overseas off-shore companies have been popular in the world for many years, and have become a hot topic for those engaged in international trade and investment. The registration and establishment of overseas offshore companies is a shortcut for enterprises to go global, carry out transnational business and enhance their international image. What is an offshore company? Why register an offshore company? The editor specially organizes this article, hoping to provide some reference value for my friends!


Ⅰ. What is an offshore company?


An offshore company generally refers to a limited liability company or a joint stock limited company established in an offshore legal zone in accordance with its offshore company law. The local government does not have any tax on such companies, and only charges a small annual management fee. At the same time, all major international banks recognize such companies to facilitate their establishment of bank accounts and financial operations. It has three characteristics: high confidentiality, tax relief, and no foreign exchange control.


Ⅱ. Why register an overseas offshore company?


1. Fast establishment and convenient registration


The registration process of an offshore company is very simple, and it is completed by a professional registration agency, and the registrant does not need to go to the registration place to operate in person.


2. Develop multinational business and enhance corporate image


Registering an overseas offshore company is a shortcut for an enterprise to go global and conduct transnational business.


3. Tax incentives


All offshore jurisdictions stipulate to varying degrees that the operating income and profits obtained by offshore companies are exempt from local tax or paid at a very low tax rate (such as 1%), and some are even exempt from inheritance tax.


4. Facilitate international trade and avoid tariff barriers


The company owns an overseas offshore company, and the company exports products to the offshore company, and then the offshore company exports to the United States and other developed countries, and can get tax-free treatment around the switch tax barrier, and can also successfully bypass the export quota restriction.


5. Avoid foreign exchange management and facilitate investment


By registering an overseas offshore company and conducting overseas financing and listing in the name of the company, the operation procedures for overseas listing can be greatly simplified.


6. Simple and flexible company management


Offshore companies do not need to hold a general meeting of shareholders and a board of directors every year. Even if they are held, the location can be chosen arbitrarily, with a greater degree of freedom.


7. It is convenient for reverse investment, returning to the mainland to establish foreign capital or joint ventures


An overseas company can also invest in the mainland to become a foreign-funded enterprise or a joint venture, and enjoy the benefits of foreign investment and business advantages such as production and sales.


8. Loose legal environment and good confidentiality


The British Virgin Islands, Cayman, Bermuda and other places are partially self-governing British colonies whose company laws are based on the British Business Companies Act. Information about the company's shareholders and directors is confidential and does not need to be disclosed to the public.


At present, the more popular offshore French jurisdictions are: British Virgin Islands; Cayman Island; Bermuda; Bahamas; Mauritius; Delaware, USA ; Coco Islands (Cook Island); Western Samoa (Western Samoa); Isle of Man, etc. Many well-known companies we know such as Tencent, Baidu, Alibaba, Sohu, NetEase, 360 and other companies have registered offshore in the Cayman Islands.