Most people, media included paint offshore accounts as harbors where only people with shady businesses stack up their cash. In the previous years, most people who used offshore accounts did so in incognito mode i.e. with fake IDs and profile pictures. What this did, was to spoil the reputation of offshore accounts. Until the present, people always have that misconception that partaking in offshore activities means avoiding taxes and hiding your assets from the government.
Well, that might have been the case in the past, but even legit business people opt to use offshore accounts. The main reason being due to significant legitimate and legal advantages that offshore accounts have over local ones. Even though years of bad publicity have ruined the image of offshore activities, there are still a couple of reasons why you shouldn’t ignore it.
Offshore Businesses 101
There are quite a number of countries that offer top-notch business environments coupled with proper legal and tax frameworks. A search on the Internet and you will probably come across companies such as Singapore Subsidiary Company Tax. However, prior to opening up an offshore corporation it is best to seek legal advice from someone who understands international tax laws. From there you can proceed to register your business name and opening up a bank and a merchant account to transact your business.
Typically, setting up an offshore account involves moving your firm and assets overseas. Nonetheless, even if your business is legal by all means, you still need to be prepared to answer questions to people who suspect offshore activities.
Here are some of the significant reasons why you should use an offshore company:
Financial Safety and Privacy
One thing that has become prevalent in the current times is a breach of privacy by government institutions. However, for most people financial privacy is critical. In most instances, people always confuse financial privacy with wanting to hide your finances and everything, but that’s not the case.
Cases have been reported where details of people with vast sums of legit cash, have been leaked to the public unknown to them. This is a case of example why somebody may need to set up an offshore account not to evade taxes or hide money from the government but to add an extra layer of security.
Capital Funding in Neutral Grounds
Investors from various countries may want to partner up and raise capital to start a business. Finding a tax neutral ground is always the first piece of business. Tax neutral nations still have more straightforward rules regarding money transfer from different investments.
You can also read: Simple things you need to do to achieve success in your Business
Decent Legal Structure
For business people living in countries where rules are often bypassed, as such, they may not worry about spending extra bucks to get better legal structures. That is why some people are willing to set up their businesses in countries with better legal frameworks bar the high taxes. With this, they will get to enjoy better legal frameworks, operational efficiency, and free and fair court systems.
About the Author:
Vic holds a Degree in Economics from the University of Toronto, when is not at the office, Vic likes to write about current and emerging trends in the business world. He is vastly experienced and has close to 10 years’ experience in Environmental and Resource Economics.