Company Set Up in Offshore Jurisdictions: BVI, Belize, Seychelles and Panama.

Investors and companies around the world have been benefiting from advantageous corporate structures and favorable tax regimes for years in order to increase profitability. With the economic turmoil pushing countries to impose tax reforms, numerous companies are looking to benefit from the best possible tax planning solutions through company set up in offshore jurisdictions. In general, an offshore company is a legal entity formed in a territory which could entail a zero or low tax rate, or even complete exemption of taxation. Offshore jurisdictions present good possibilities to legally optimise profitability and enhance effectiveness of a business, as a careful selection of jurisdiction allows for utilizing the various benefits of legislations across different countries, according to each business needs and goals. Benefits of Setting up an Offshore Company Setting up a company in a well-renowned offshore financial hub offers many advantages on a multitude of levels. The below list includes a number of benefits sought and attained when you incorporate a company overseas:

• Tax savings with important reduction on personal and corporate tax
• Strict confidentiality and privacy with no public disclosure requirements
• High levels of asset protection and estate planning
• Protection from lawsuits and creditor claims
• Ease of operation with simple statutory obligations and less bureaucracy
• Reduction of start-up and management expenses
• Increased cross border sales
• Minimised foreign exchange risk and reduced bank transaction costs
• Lack of restrictions on the remittance of profits and capital
• Developed banking services and world-class investment management

Selecting an Offshore Jurisdiction In international business, the selection of an offshore territory to register a company demands meticulous consideration. It is vital to choose a jurisdiction that is well-matched to particular corporate, personal and financial needs. The right jurisdiction for an international company formation will be determined by the following factors:

• Political and financial stability
• Flexible corporate characteristics (limited liability, low capital requirements, minimal statutory responsibilities, nominee shareholders allowance, availability of bearer shares, etc.)
• Favorable tax regime
• Versatile legislation offering complete privacy and confidentiality
• Encouraging company, banking and citizenship legislation
• Professional multilingual corporate business services
• Modern communications infrastructure
• Comprehensive range of banking facilities

Below are listed four of the most prominent offshore jurisdictions for favourable company formation around the world; British Virgin Islands, Belize, Seychelles and Panama. British Virgin Islands The British Virgin Islands (BVI) is one of the oldest and most well-renowned offshore financial hubs in the world, with one of the most stable and affluent economies in the Caribbean. BVI is a British Overseas Territory with outstanding political solidity. The jurisdiction preserves a low international profile and an immaculate reputation, thus keeping it away from the downsides related to some less reliable tax havens. English is the main language and the US Dollar the official currency. There is an independent judicial system based on English Common Law and numerous tax treaties are maintained with the EU and USA. The island has a tax free corporate legislation and a contemporary Companies Registry, encouraging the growth of offshore activity. The most common corporate structure used by international investors is the International Business Company (IBC). The BVI company law permits the administration of the IBS to be carried out either in the BVI or from any other jurisdiction in the world. The main features of forming a BVI IBC:

• Only one director and shareholder is needed, who can be the same person.
• The director and shareholder may be a company or a natural person of any nationality.
• The identity of the director or shareholder is not disclosed in any incorporation document and no public records are held.
• Board meetings can take place in any other jurisdiction.
• IBCs are exempted from all taxes and stamp duty.
• There are no minimum share capital requirements.
• Registered and bearer shares can be issued.
• Taxes are not imposed on any banking transactions.
• Directors are eligible to safeguard IBC’s assets by passing them on to other corporate bodies or trustees.
• Accounts or other annual reports have not to be filed with the government.
• The annual license fee for the IBC is lower than in many other territories.

Belize Belize is positioned in Central America, bordered by the Caribbean Sea. The country has an exceptional status of peace, democracy and stability, and the second highest per capita income in Central America. The Belizean legal system is based on the English Common Law and English is the official language of the country. Belize is considered as one of the most secure and confidential offshore territories in the world concerning the issue of information disclosure to foreign parties, as it does not reveal any banking or financial data whatsoever, since it is not under any information exchange agreement with other jurisdictions. The country has arguably the fastest registry around the globe, where same-day set ups are typical and IBCs are registered in just a couple of hours. Its contemporary and advanced offshore corporate regulations offer flexibility of the highest standards and efficient tax planning. Moreover, Belize has launched a highly attractive Offshore Banking Act, which reinforced its banking privacy regulations in order to attract international banking institutions. The main features of setting up a Belize IBC:

• A minimum of one director or shareholder is required, who can be the same person.
• The director and shareholder may be a legal entity or a natural person of any nationality.
• Incorporation documents or any other public records do not disclose the name of any director or shareholder.
• Director and shareholder nominee services are permitted in order to secure secrecy.
• IBC shares can be issued in any main currency.
• IBCs are not subject to any taxes or stamp duties.
• Bearer shares are permitted.
• No exchange control regulations apply.
• No restrictions apply for an IBC to undertake any lawful business and investment operations, except from trust, banking and insurance activities which require a specialised license.
• Good Standing Certificates can be attained from the Belizean Registrar.

Seychelles Seychelles is an archipelago situated in the Indian Ocean. It is an emerging, progressive and competitive offshore financial centre that offers competitive legislation and easy incorporation. The number of international companies registering in the region is increasing progressively, along with its popularity and recognition in the professional world.  The government has always been promoting business and investment activities and has actively supported foreign investors by passing legislation relating to non-discrimination against foreigners in conducting business in the country. With robust business and financial connections to both Western Europe and South Asia, Seychelles has grown to be the most successful offshore financial services provider in the Indian Ocean region. The Seychellois offshore company law is founded upon time-tested concepts of some of its most prominent competitors. After a systematic refinement and upgrading, Seychelles offers now an unrivalled offshore corporate package.  Seychelles IBC is the most sought-after offshore company structure available in the jurisdiction, boasting great flexibility, complete exemption from taxation, fast incorporation and low maintenance costs. The main features of setting up a Seychelles IBC:

• Only one director and shareholder is required, who can be the same person.
• Directors and shareholders can be a natural person or legal entity of any nationality.
• Physical presence is not required in order to set up an IBC.
• Confidentiality is highly preserved due to no information sharing agreements.
• Information on the company directors, shareholders and beneficial owners are not required by any public authority.
• The only documentation held in public files is Memorandum of Association and Articles of Association.
• Seychelles IBC is exempted from any taxation.
• No reporting requirements on accounts, annual returns, taxation or any other financial information.
• There are no minimum or maximum capital restrictions.
• Authorisation to issue bearer shares.
• The minimum annual license fee payable is only $100.

Panama Panama is positioned in Central America, bordering the North Pacific Ocean and the Caribbean Sea. It is a presidential independent jurisdiction with high political stability. Panama’s economy is largely based on a well-advanced financial services sector and its official currency is the United States Dollar. Panama is highly regarded as one of the most respected business hubs in the world, with the largest per capita income in Central America. The factors that contributed to the development of the jurisdiction as an important corporate, commerce and financial centre is the country’s privileged position, a well-educated professional infrastructure, low levels of bureaucracy, an advanced telecommunications system and an excellent banking system. Panama has the second largest banking system in the world, boasting highly stable institutions and the most favourable confidentiality laws applicable. Company and foundation set up in Panama is highly sought-after among investors and businesses that seek optimal tax planning and asset protection solutions. Panamanian IBCs and foundations are highly flexible legal structures that offer exemption from all local taxes and income received outside the country, with no foreign exchange restrictions and high levels of protection. The main features of setting up a Panama IBC:

• A minimum of three directors is required.
• Nominee directors and shareholders are allowed.
• Any individual or legal entity of any nationality may become a shareholder.
• Panama IBCs require three officers for the position of president, treasurer and secretary, who may be natural persons or corporate bodies.
• An officer may hold more than one position, but the president and secretary should not be the same person.
• Sensitive information about shareholders and beneficial owners is not filed with the Registry and not available to the public.
• Directors’ and shareholders’ meetings can take place in any region of the world.
• IBCs are exempted from local taxation when conducting activities outside Panama.
• There are no foreign exchange controls or restrictions on the free movement of currency.
• No requirement to submit annual accounts, records or audits.
• Permission of holding shares in bearer or registered.
• No requirement of a minimum paid-up capital.
• IBCs must maintain a Minute Book and Stock Register which can be kept in any offshore territory.

The most popular form of Panama foundation is the Private Interest Foundation, which is a legal entity between a trust and a corporation that does not have any owners, but is intended to benefit a group of individuals in general. A Private Interest Foundation may own any property, multiple corporations, bank accounts, trusts or property investment. The regulations of the entity are completely confidential, as they do not have to be filed with a public registry and can be amended at any point. The most important uses of a Private Interest Foundation are the elimination of taxation, asset protection, estate planning, secrecy and protection of the founders and beneficiaries of the foundation. The main advantages of setting up a Panama Private Interest Foundation:

• Full exemption from taxation including income tax, wealth tax, inheritance tax, transfer tax and real estate tax.
• No requirements to file annual tax returns and financial statements.
• Easy and fast incorporation with a flexible structure.
• No requirement of minimum and maximum capital.
• simple administration and management procedures.
• Establishment of business relationships and opening of bank accounts worldwide.
• The founders, members of the foundation council, protectors and beneficiaries may be physical persons or companies of any nationality.
• The founders, the members of the council and the protectors may be beneficiaries of the foundation, without any requirement to disclose their name and identity.
• The founders and members of the council may conduct their meetings anywhere in the world and may be represented by a proxy.

Michael Chambers & Co. provides a comprehensive range of offshore company incorporation services in favourable jurisdictions, so that companies can take advantage of a range of benefits. We have years of offshore company set up experience and are able to provide tailor-made solutions to our clients. Whether you are seeking for tax planning suggestions or asset protection vehicles, Michael Chambers & Co. helps you set up the preferred company structure to ensure tax savings, anonymity and lawsuit protection. Our International Tax Planning team will guide you on selecting the most appropriate jurisdiction to form your business in and handle efficiently all aspects of company registration in line with your requirements. We can also provide all the required associated corporate and fiduciary services you may need along the way.