Categories of Offshore Companies

Offshore companies are classified according to various criteria. More about the different types of offshore zones for business read in this article.

A large part of offshore zones can be divided into three groups:

• Classic offshore zones;
• Zones with reduced taxes;
• Other areas, which combine certain factors and create favorable conditions for financial and tax planning.

The first category includes countries, at the legislative level, completely removing the tax burden from offshore companies (instead of fees, the government requires the payment of a fixed amount, which ensures the renewal of the license to conduct business).

Many classic offshore companies are quite undemanding to maintain financial accountability and transfer of documentation to the state structure, up to a full exemption from having to do it. British Virgin Islands and Panama are among them. At the same time in other classic offshore companies, it is necessary to prepare and deliver all financial records.

In the second category are states providing generous tax breaks for offshore organizations. At the same time offshore must keep strict financial records. Examples of such countries are Hungary and Cyprus.

The third category includes states or administrative units, which formally do not support the practice of offshore. However, registration in this region allows to use the features of the legislation to build a sound financial scheme to minimize the actual tax. A good example of such country is the Netherlands. If the registered company has a holding or financial activity outside the state, then tax collection will be less than 1%. It is important to remember that strict requirements for maintaining financial reporting are retained. One of the most popular offshore zones of the third type is England.

Offshore areas in the USA should be considered separately. In fact, they cannot be considered a full-fledged offshore. However, the laws of the individual state can create the conditions for virtually complete exemption from the tax collection of those companies that conduct business outside the state. Financial statements are not abolished as well as the requirement to pay all taxes of the Federal level.

Each category of the offshore zones has its own features, so the choice of the jurisdiction company of the offshore type should be made carefully. You should consult with a specialist before you start processing documents. And you can choose the "right" legal framework for your companies. Besides, the risk of possible errors in the management of organizations-residents will be reduced. Our advice is a company registration in Dubai, D&A Consults offer you to start your business. An additional advantage will be the development of an optimal financial scheme that allows you to earn and save money by using offshore companies.

There are not a strict formal definition of the offshore zones, using by people all over the world. For this reason, it is impossible to reliably determine the total number of offshore.