Offshore Corporations
As our "world" becomes smaller, and few businesses are local or even strictly national, there is an increasing need for internationalization. We think, plan and work with an eye toward expanding our horizons both at home and abroad. The use of a corporate vehicle as a means of this expansion is nothing new. What is new and what must become second nature to professionals of all types is the idea of "offshore" corporations.
No longer will a domestic corporation satisfy the needs of one's clientele. The average business person today is fa more sophisticated than the business person of even ten to fifteen years ago. Corporate structuring and planning have achieved higher levels of complexity than ever before while the need for anonymity remains strong.
Professionals must keep pace and be constantly on the look out for new ways to assist clients. One way is to have a clear understanding of the characteristics of offshore corporations and how they may be put to advantageous use.
Offshore corporations are used outside of the place of incorporation for a seemingly limitless variety of activities including trading, trade financing, holding assets, manufacturing and tax minimization. They are often used for trading with or in countries where satisfactory local commercial or corporate law is deficient or absent. Joint ventures often use offshore corporations when the participants are from different countries and prefer to incorporate in a jurisdiction neutral to all of the parties.
Offshore corporations can also serve to isolate or separate activities, assets or profit centers for tax, accounting or liability reasons. Where assets are cumbersome or expensive to transfer, such as patents, copyrights or trademarks, it is sometimes feasible to have such assets held by separate corporations allowing the individual to transfer the shares in the corporation rather than the asset itself.
In some cases, a offshore corporation, recognized as a citizen or national of the place of incorporation, may confer a trade advantage or may help avoid a disadvantage. It may also be used as an integral part of a trust structure.
Certain countries, moreover, seek to make it attractive to incorporate in their jurisdiction, even when activities are to be conducted elsewhere. In fact, there are so many "tax efficient" jurisdictions that an initial problem for most users is how to select from the available options.
When assisting a client in selecting a place to incorporate, most professionals emphasize the following criteria:
- The legal and political attitude of the jurisdiction toward commercial activities;
- Features of the corporate law that facilitate incorporation and continuing management;
- The level and speed of service obtainable in and from the jurisdiction and cost
Generally, a desirable jurisdiction should be politically neutral, follows a policy of free trade, does not interfere with the commercial activities of corporations, established there, and is politically acceptable to other countries and places in which the corporation may be trading.
Formal diplomatic recognition as well as commercial recognition and acceptability are important. Commercial recognition is a feature of an offshore jurisdiction that is earned. Use of a jurisdiction in financial transactions allows banks to become more familiar and more comfortable with its legal system and forms of corporate documentation.
Most popular jurisdictions have a legal system derived from a major western country and greatly favor corporations which are non-resident in nature. Professionals prefer the western-style legislation since it provides a familiar basis for legal interpretation and facilitates understanding of the laws in international practice, particularly in developed countries. In addition, there is inherent in the western tradition the protection of private property and the promotion of international trade.
In order to be successful, a corporate law must provide those entities under which it is formed with legal capacity to conduct all forms of commercial activity anywhere in the world, allow for a simple management structure and provide the corporation with broad financial powers. In addition, they should be highly confidential and have minimal requirements for maintaining the legal existence of the corporation in compliance with the laws of the place of incorporation.
All jurisdictions have at least two maintenance requirements:
- Maintaining an agent for service of process; and
- Paying an annual franchise fee or tax.
In jurisdictions patterned on United States law, there are generally no further requirements. This should be considered when choosing between the United States type or a United Kingdom (U.K.) style jurisdiction.
U.K. style jurisdictions usually require annual filings regarding directors and officers and at a minimum will request that the annual accounts of the corporation be maintained in the jurisdiction. Such accounts may be subject to review by the Registrar but in some cases need not be filed. This is one major advantage of the U.S. style jurisdictions over the U.K. model.
We offer formation services which are easy to obtain and we guarantee the corporate existence in 24 hours (of working days) for Marshall Islands corporation or limited liability companies.
We are able to offer a wide range of services and we are adequately equipped with trained personnel to handle questions informally and we have a larger base of experience upon which to draw when answering such questions.
Incorporation fee with us for and for Marshall Islands corporation it is US $1500. Annual fee for Marshall Islands corporation or limited liability company is US $900. There are no other mandatory fees or charges either upon incorporation or for the maintenance of the corporation.