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What is an Offshore Company?

Update Date:2019-5-29 17:16:41 Source:Tannet (Malaysia) Sdn Bhd Views:78

Malaysia Hotline: +603-2141 8908


Nowadays, the world economy is increasingly integrated, and business is increasingly showing cross-border development trends. Many companies often use multinational operations to enhance their capabilities and expand their business areas. The establishment of an overseas offshore company is a quick way for companies to go global, develop multinational businesses, and enhance their international image.


1.  Basic concept of offshore company


What does offshore company mean? As the name implies, is a limited liability company or joint stock limited company established in an offshore jurisdiction, allowing international individuals to establish an international business company on its territory. Investors do not have to visit the local area, and their business operations can be carried out directly anywhere in the world. For example, a trading company is registered in the British Virgin Islands, but its trading business can be conducted between Europe and Asia.


2. The characteristics of offshore company:


(a) Offshore companies must be established in specific offshore jurisdictions.

There are many famous offshore jurisdictions on all continents. These jurisdictions are mainly island countries. In order to attract investment and improve local economic development, the offshore company law has been specially formulated to encourage investments from all over the world to register locally. For a company's business income exemption or a small amount of tax, only a certain management fee is charged each year.


(b) The establishment of an offshore company must be based on the offshore company law specific to the offshore jurisdiction.

For example, in the British Virgin Islands, the local law regulating offshore companies is the Virgin International Business Companies Act, while in the Cayman Islands, the exempted company specifications under Chapter 7 of the Cayman Islands Companies Act. Some areas have special provisions on offshore companies in the common company law.


(c) Offshore companies are not allowed to operate in the local area.

Without exception, offshore jurisdictions prohibit offshore companies from conducting any commercial activities locally and do business with local residents. Once an offshore company violates this rule, it will be revoked.



3. The purpose of offshore company


(a)The company can directly accept orders from foreign customers and the company account can freely accept foreign funds to avoid the foreign exchange.

(b) Offshore company profits are all tax-free and increase profits from foreign trade activities.

(c)  Avoid exchange rate risks, trade activities have autonomy, exempt from import and export company restrictions, and trade information is secure.

(d) The company's information is effectively kept confidential to protect the interests of private offshore companies.

(e)  Foreign exchange funds are freely transferable and are not subject to exchange controls.

(f)  Avoid trade barriers and restrictions in different countries.


4. For the business nature of different companies, the purpose of offshore companies can also be divided into:

(a) Trading company: The benefit is extremely convenient capital operation and ultra-low tax costs.

(b) Holding company: including commercial holding companies and private holding companies with the main purpose of maintaining confidentiality. The top ranked Hong Kong and the second ranked British Virgin Islands are famous choice of offshore company.

(c) International investment: used to hold corporate bonds, stocks, and transactions.

(d) Other uses: yacht holding company, property holding company, asset protection company, public investment company, intellectual property ownership company, transportation company, network company, insurance company, etc.



5. What are the offshore company registration spots?

There are many offshore registered spots in the world, and the offshore policies vary from region to region. Listed below are some commonly used offshore registration spots, such as the British Virgin Islands (BVI), the Cayman Islands, Seychelles, Belize, Samoa, etc.


According to relevant statistics, about 100,000 offshore companies are now established in various offshore jurisdictions each year. Among the many users, the most common reasons for setting up offshore companies are: facilitating trade, accelerating global processes, flexible foreign exchange controls, and legally reducing taxes. So why it is self-evident to register an offshore company abroad, nothing more than registering an offshore company is more conducive to business development.


Tannet Malaysia has been involved in the offshore company registration for 20 years. We have branches in China, Hong Kong and Malaysia to help you set up an offshore company. We offer a range of offshore companies from registration to management and maintenance through one-stop service. For more information, please feel free to call the Tannet service hotline: 603-2141 8908 or email tannetmy@gmail.com, Malaysia company address: Unit 6.06, Level 6, Amoda 22, Jalan Imbi 55100 Kuala Lumpur.

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