Creation of offshore companies

Concept and definition

What is an offshore company?

E

n jurisdictions with flexible tax laws it is usual to work with offshore companies, those that are established and registered in a different country from the one in which they operate. Normally, they hardly have activity in the territory where they are created and therefore their constitution is not illegal. The offshore companies are associated with paraΓ­sos fiscales, for being in these areas where they usually register.

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    Keys to the success of offshore companies

    Very common tool in tax planning

    Nor is there no difference between a US or Spanish company and a offshore company. It is the same society that large companies use, such as Coca Cola, Google or Amazon, and individuals around the world. The only difference is its usefulness, the use that is made of it, be it to diversify assets, hide assets, or avoid paying taxes. What also determines its legality or illegality.

    No wonder that the relationship between offshore companies and recent tax scandals like Panama Papers, Bahamas Leaks o Luxleaks. What determines that often, the offshore companies they are used for the constitution of crimes.

    International Tax Planning

    Are offshore companies legal?

    Cestablish and possess a offshore company it is not illegal. Neither is having money in paraΓ­sos fiscales, as long as their tenure is declared to the tax administrations of their country of origin. However, they could become illegal if they are created to facilitate the commission of crimes such as concealment of heritage

    (in order to avoid paying taxes), the Money laundering or the tax evasion, among others or if the origin of its capital is illegal.

    Therefore, offshore companies they are legal. What is illegal is to use them as a means to commit a fiscal crime or against the public treasury.

    Main offshore jurisdictions

    Our worldwide network of advisers is at your disposal to set up your offshore company with an offshore bank account in the jurisdiction that best suits your needs.

    Why don't offshore companies pay taxes?

    Lto most jurisdictions that allow constitution of offshore companies, have flexible regulation and legal legislation, which encourages the entry of foreign capital by offering lax fiscal regimes, where little and / or no taxes are paid.

    These states are free and economically sovereign to offer these advantages and attract foreign investment. One of these advantages is that offshore companies who are domiciled in these territories are exempt from paying taxes since they do not carry out any activity.

    However, they are used by many to defraud the hacienda of origin. Although they are not taxed in the country where they are installed, they must declare their assets and assets in the state where they actually originated.

    On many occasions, these companies are hidden from the tax administration, favoring the currency avoidance, non-payment of taxes and lavado de dinero, which would constitute a crime.

    Information is power

    SIf you want to know more about the main tax havens in the world, feel free to visit The daily offshore news, our news portal related to the latest news on tax havens.