Off Shore Companies

 Off Shore Companies

Off shore companies are those companies which are set outside the jurisdiction of a country. There are number of purposes for setting an off shore company.  Purposes of off shore companies have been explained below

1.    Tax Relief

Offshore companies are normally set up in tax heaven, where there is either no tax or very low tax rate on income. Therefore some counties encourage or allow establishing of off shore companies by keeping the tax rate nil or very low. Thus investment is attracted by providing tax relief to the investors.

2.    Concealment of identity

Off shore companies may be used to conceal the identity of the investors. The information of off shore companies is normally not available to general public. Moreover, these companies are operated by paid director, thus the actual beneficiaries (shareholder or owner) are not known to the world.

3.    Concealment Source of Income

Off company May works as a middle company, first money are transferred to this company and then money transferred to some other business or for personal use. Therefore off shore company may be used to conceal the original source of income.

4.    Black Money Utilization

Limited information are required to set up an off shore companies, similarly limited information available about off shore companies to the world, Thus black money may be invested in these off shore companies and later on this money is transferred back as white money earned by the off shore company.

5.    Easy to Set Up.

There are limited legal formalities for setting up off shore companies, while setting a normal corporate business or company is an extensive process and involves many legal formalities and disclosure are required.