Offshore corporations are legally classified as juridical persons and exercise the same rights and capacities as natural persons. As legal persons, offshore corporations can open company, business, trust, investment, and any other account in their name, take legal action, sign and enter contracts, agreements, take and implement decisions. Offshore corporations have limited liability and as a result provide a high level of asset protection to their owners by inherently being able to separate company assets from personal assets; the result being that if an offshore corporation were to fail financially, only the offshore corporation’s assets would be affected and not those of the members personally. Loss in the assets of offshore corporations could be brought on by poor management, unfavorable market conditions, poor sales or any other unforeseen factor that works to the disadvantage of the corporation. It is therefore to ensure that objectives and strategies for doing business with offshore corporations are properly conceptualized and planned before undertaking any major offshore venture.
All in all, the subject of offshore corporations is an interesting one because of the impact that offshore corporations have on the global economy, and thus regions and individual countries. Offshore corporations are entities used for either international (international transactions) business or global trade (establishing subsidiaries, branches, franchise etc. throughout the world), and serve for undertaking a wide range of business activities and transactions as long as these are in accordance with legal requirements. These corporations are one of a kind because of their features, particularly in terms of being automatically granted tax free status upon incorporation and their use for international activities.
Officially, offshore corporations are known as International Business Companies, Business Corporations and Global Business Company depending on the jurisdiction in which they are formed and the name given under the offshore company legislation of that country. Other types of offshore entities like offshore limited liability companies, offshore limited liability partnerships and protected cell companies are often generally referred to as offshore corporations. Each of these have their special structures and unique advantages, thus causing them to be established for varying reasons, purposes and needs.
Support services for offshore corporations are diverse and constantly innovative financial and legal facilities that help business owners to build efficient and effective offshore networks and operations so that goals can be met at satisfactory degrees. Some of these facilities include other offshore entities such as offshore trusts and foundations that can be used to create additional hedges around assets to ensure that they are adequately protected and tax liability is maintained at acceptable levels. Also, legal and financial planners can help in devising international business strategies and plans that could be formulated to cater to the type of operations that offshore corporations have. Other services and facilities that offshore corporations have access to and are worthwhile for conducting business include offshore banking, offshore insurance, offshore investment funds, offshore tax planning and offshore asset management. An integrated approach comprising these offshore facilities creates a reliable and sturdy international network for operations across regions.
Besides gathering knowledge on these approaches, the owners of offshore corporations should inform themselves on tax treaties which are a result of bilateral and multilateral cooperation among countries in resolving tax issues. These matters need to be addressed since considerable numbers of transactions take place daily on a global scale and involve several thousands and millions of dollars that are handled by offshore corporations. Governments are concerned about laying their claims on such wealth and therefore may either choose to restrict offshore corporation transactions to reduce and deter the outflow of capital or to attract and maintain current capital inflows and foreign investment.
Offshore corporations have become an important subject in world politics and influence tax regimes around the world. Because of corporations offshore, quite a few international regulatory agencies were created to supervise banking, insurance services, investment and trade and trustee services. This is to ensure that these services are offered to and by corporations offshore to ensure that standards are set and to eliminate and reduce financial crimes. Some of these organisations that regulate offshore corporations include the OECD, the Basel Committee on Banking Supervision and the Organization of Securities Commission.
It is always wise for offshore corporations to hold offshore bank accounts because of their importance in assisting international transactions and business. Thanks to offshore banking, offshore corporations can transfer funds internationally very easily, make and receive payments, manage offshore merchant account, current accounts, fixed deposit accounts and trading account which are standard services at offshore banks for corporations offshore. In addition to offshore corporations offshore international banking is done primarily online so banking facilities can be accessed on any day and time. If it were not for trained professional employed, offshore banks would have had a rough time sustaining the offshore corporations in the way that they do.