Formation Company & Tax Advisory

Sunday, May 20, 2018

Income Tax Return of Off-Shore Companies

An Off Shore company is a Legal entity established within a jurisdiction allowing tax incentives, which is protected by a jurisdiction that guarantees its total or partial tax-free status. Yearly operating expenses of an Off Shore company vary widely depending on the type of company and jurisdiction where it is localized. In some jurisdictions, the company must pay an annual prefixed tax, as it happens in the Republic of Panama.

In some jurisdictions, Offshore companies can trade or do business only outside of the Country to be tax free, while in other ones companies can do business both locally and internationally. The Legal restrictions that Off-Shore companies suffer in almost all jurisdictions worldwide, generally prevent them from having a permanentestablishment in the Country that established them. Given this reason, Off-Shore companies are mostly used for activities unrelated to a specific and precise geographic position, e.g. the creation of holding companies or asset protection, static asset protection activities. In most jurisdictions, these companies are characterized by a simple administrative management since they are not required to submit annual reports or financial statements.

Certain countries as Hong Kong, Singapore and Uruguay apply the so-called territorial tax system. The general principle of this method requires that individuals and/or legal entities which can be residents or non-residents, are taxed only on income generated within their Country's territory, while gains got outside of their Country are tax-free (except in Hong Kong where the combined income is demanded if part of it is operated within the Country). So a company that does business only abroad can generally operate tax-free but, unlike in other Off-Shore jurisdictions, to take advantage of the exempt status you must have some specific parameters which change from Country to Country.

Most operations of Offshore companies are:

Clearly the Legal behavior of Off Shore companies must be examined under the light of EU and international rules, an Off Shore company should not be used as an elusive tool, but as an opportunity that international Law makes available to optimize one's investments and to protect the assets and/or privacy.

It is important to mark that every situation or problem is a unique case that requires a specific customized solution. Following an Assignment, BBC-LLP will work to identify the best solution. Confidentiality, consulting dedicated to get to know each individual need and customized consultancy, are elements that mark Bright Business Consulting LLP company as capable of addressing the issues related to the sensitive issue in object, where "Warranty & Assistance" - are the first goals. Our focus is: to lead the Customer to the most appropriate Service.

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