Even though you cannot have a ‘secret’ offshore company these days, some jurisdictions still offer a number of important benefits to international entrepreneurs. In particular, it is quite possible to pay no taxes in an offshore jurisdiction if your company does all its business in other jurisdictions. True, there are economic substance requirements and an annual company registration fee is due but these expenses can easily be compensated because you can seriously save on taxes.
Below we discuss a few offshore jurisdictions located in the Caribbean that you could consider for registering an offshore company. We point out their main advantages as well as some disadvantages that they have.
An offshore company in the BVI
The British Virgin Islands is one of the most popular offshore jurisdictions in the world. A great number of entrepreneurs from different countries register companies there. The BVI boasts the following main advantages:
- A stable political situation;
- No audit requirements;
- The minimum number of company shareholders and directors is one;
- Offshore companies are not taxed in the BVI;
- The cost of company registration is affordable;
- Confidentiality is protected;
- Nominee services are legal;
- No currency control;
- All types of legal business activities are allowed.
The BVI is not an independent country but an overseas territory of the UK. At the same time, it is one of the most prosperous Caribbean jurisdictions. Is it a coincidence? We don’t think so but a stable economy is one of the strongest points that the BVI has.
An offshore company in the Caymans
Many rich and famous people prefer to keep their capitals in that jurisdiction. The Cayman Islands has been able to build an attractive financial, political, and economic model that brings a lot of benefits to foreign investors. The authorities of the jurisdiction guarantee assets’ security, which attracts people from different countries. Tens of thousands of companies are registered in the Caymans and there you will also find multiple banks, insurance companies, and mutual funds.
Main advantages of the Cayman Islands:
- No corporate or personal taxes;
- No need to file financial reports;
- Confidentiality protection;
- No currency control;
- Simple company registration;
- Political and economic stability;
- An opportunity to perform all sorts of business operations abroad;
- Low crime rates;
- An advanced infrastructure;
- A well-developed banking sector;
- High quality legal services;
- No local company secretary needs to be hired;
- No personal presence is required for registering a company in the Caymans.
If you register a company in the Cayman Islands, you can grow and develop your international business. Similarly to the BVI, the Caymans is also a British overseas territory and you there will find everything that you need for successful business operations.
At the same time, we have to point out some downsides that the Cayman Islands has:
- Registering a company is a bit more expensive there in comparison to other offshore jurisdictions;
- No business can be done on the territory of the Cayman Islands;
- Annual reporting is required;
- An offshore company cannot own property in the jurisdiction.
Notwithstanding the downsides, the interest in the Cayman Islands on the part of the international business community remains stable.
An offshore company in Costa Rica
You should consider registering a company in Costa Rica for the following main reasons:
- A stable political situation in the country;
- Strong economic performance;
- The most attractive Latin American country for foreign investors;
- Low crime rates;
- Territorial taxation principle;
- A company can be fully owned by a foreigner;
- The country closely cooperates with the OECD;
- Private property is efficiently protected in the country;
- No taxes for offshore companies;
- Good conditions for business development;
- Good reputation of the jurisdiction;
- Free expatriation of capital;
- The largest international banks have offices in Costa Rica.
The legislative system in the country is based on Spanish civil law. Costa Rica boasts an advanced legal system, a perfect infrastructure, and flexible taxation regulations, which opens wonderful prospects to anyone looking to enter the American markets.
The only disadvantage of Costa Rica that we can point out is a relatively high company maintenance cost. Maintaining a company is cheaper in some other offshore jurisdictions.
An offshore company in Belize
Belize is a small and a relatively young state but it has managed to become one of the most popular offshore jurisdictions in the world. What attracts foreign businesspeople to Belize? Below we list the main factors:
- Sustainable domestic and foreign policies;
- A stable economic situation;
- High speed of company registration;
- A good international reputation;
- Confidentiality;
- A closed Business Register;
- No taxes;
- Low costs of company registration;
- A comfortable business environment;
- Nominee services are allowed;
- No currency control;
- State support for business ventures;
- Records have to be kept but reports don’t have to be filed;
- Corporate assets are protected by law.
The disadvantages of Belize include the following ones:
- Offshore companies cannot work in the jurisdiction;
- IBCs cannot buy property in Belize;
- Since 2013, the companies registered in Belize have had to keep the following documents: financial reports, contracts, receipts, transaction documents, accounting books, and other papers.
At the same time, no reports need to be filed.
Belize is a member of the group of countries that exchange fiscal information with each other. It has a number of bilateral agreements with European countries in particular. However, the ‘exchange of fiscal information’ is actually irrelevant because nominee services are allowed in Belize.
An offshore company in Panama
Panama is among the countries especially popular with foreign investors and entrepreneurs. Rapid economic growth, a flexible taxation legislation, various governmental support programs, and inviting immigration policies – these factors attract a lot of investments to Panama.
The main advantages of the jurisdiction include the following ones:
- Flexible legislation;
- Fast company registration;
- Favorable taxation policies;
- Inexpensive office rent;
- High-speed Internet connection;
- An advanced infrastructure;
- A stable banking system;
- Comparatively low costs of living;
- Inexpensive labor force;
- Free Trade Zones;
- No currency control;
- Availability of nominee services;
- A beneficial geographical location;
- The US dollar is in free circulation in Panama;
- Sustainable foreign and domestic policies;
- Economic stability;
- Multiple benefits for non-residents;
- Income earned in other countries is not taxed in Panama;
- No inheritance tax, no stamp duties;
- No restrictions on registered capital;
- No audit is required;
- No restrictions on capital repatriation;
- No currency control.
Panama also has some disadvantages including the following ones:
- Some restrictions for foreigners registering companies in the country;
- Failure to pay the annual company registration fee leads to a heavy fine;
- Economic substance requirements are in place;
- The information about company owners is not available to the public but a registered agent has to have it. The agent will disclose the information on a court decision.
There are other Caribbean jurisdictions that offer attractive offshore services too. We suggest that you should apply for professional assistance to make the best choice if you would like to register an offshore company.
