How to Benefit More from an Offshore Company
In order to maximize the benefits, one should:
- Have a clear concrete reason for company formation—a reason on which to follow on to satisfaction, your primary motivation.
- Create a global mindset.
- Change how you view other countries.
- Broaden your horizon of residency. Overcome your fear of staying away from your country.
- Have a positive view of foreign companies and financial accounts.
- Do thorough research on the country your choice in terms of their laws, financial/economic stability, and political stability.
- Maximize on your country’s international influence and public relations.
- Always ensure you and your company abide by the laws and regulations of your jurisdiction and your offshore jurisdiction.
- Always do the business that you love and enjoy. It will make you feel fulfilled watching it grow.
- Last but not least, know that it always seems difficult to try out a new thing/territory, business included, but it does not have to be so.
Advantages of Being a Corporate Entity
- It allows the owners/investors to transfer ownership to another party in such a way that they can take business risks that enables growth without affecting the personal finances of their owners, shareholders and directors.
- It has a lower tax rate than a sole proprietorship or partnership business.
- Raising capital can be done through the sale of stock.
- Tax restrictions are lenient in case of the loss of Cary forwards.
- Debts or financial liabilities incurred by the company are not deductible from stakeholders and shareholders. The company bears losses.
Disadvantages of Offshore Companies
- Because information is not publicly available to the general public, many of these companies take advantage and form/engage in criminal and harmful businesses. However, in Singapore, the law enforcement department has access to such information.
- One has to deal with cultural differences.
- Difference time zone differences require one to be careful when setting timelines for tasks.
- Problem resolution is difficult.
What to Consider Before Incorporating an Offshore Company
- If the company is contemplating being an investment holding entity.
- You intend to use your intellectual property in different jurisdictions.
- Relief and tax planning.
While it is true that offshore businesses have various advantages, the reason for forming such businesses and the benefits hoped for may be different from one person to another. Some may be having offshore companies because of political instabilities in their countries or family reasons in the absence of which they could be having the same companies in their home jurisdiction. While others may form them because of additional services/incomes.
In Singapore, there are various offshore investment areas such as intellectual property holding, yatch holding and ship management, trading, and professional services or consultancy.
Maintaining an offshore corporation in Singapore is costly compared to other offshore jurisdictions like Hong Kong, Cyprus, Seychelles or Belize. However, the benefits that you will reap will make the cost insignificant.