Why It Is Beneficial for Companies to Have Offshore Accounts?

Companies or businesses that have offshore accounts are often demonized by the media. Offshore account holders are labeled as tax evaders and those that illegally stash away their money in some shady bank located on obscure places around the world. However, this is not completely true as it is perfectly legal and offers many advantages. This post aims to highlight the key advantages that companies enjoy by having offshore accounts.

Many countries around the world offer tax incentives so as to encourage foreign investors. For example, tax payable by foreign companies that set up operations and open bank accounts in the offshore jurisdiction of Labuan is just 3 percent provided they comply with certain conditions. Many multinational companies have already set up accounts are taking advantage of the favorable Labuan tax rates. Small countries with limited resources attract investors by promoting a healthy investment climate to attract outside wealth and increase economic activity.

Offshore jurisdictions present an opportunity for restructuring asset ownership through foundations trusts, or corporations. Many companies that are concerned about lawsuits, creditors collecting outstanding debts, or foreclosing lenders choose to transfer a part of their assets to an entity outside the home country. Transfer of ownership on paper prevents companies from becoming susceptible to seizure and other domestic problems.

Many offshore accounts come with the complementary advantage of secrecy legislation as the countries offering offshore jurisdictions often enact laws for establishing strict banking and corporate confidentiality. The offending party will have to face serious consequences for breaching confidentiality. For example, divulging customer identities is considered as a breach of confidentiality. In some jurisdictions, disclosure of shareholder information amounts to breaching corporate confidentiality.

Regulations in some countries restrict individuals and companies from taking advantage of international investment opportunities. Such restrictions hinder the establishment of diversified investment portfolios. On the other hand, offshore accounts offer investors with unlimited access to the best and most profitable international markets because of their flexible nature. Moreover, developing nations present many opportunities, especially countries that are poised for privatization sectors formerly controlled by the government. For instance, the willingness of China to privatize certain industries presents investors with immense possibilities because it is the largest consumer market in the world.

Many countries are prone to different forms of risks, instability, and threats because of political, religious, economic, and ethnic reasons and natural calamities. The more the vulnerability of a country to such instability, the lesser will be the safety and security of the assets of businesses in these countries. Establishing an offshore account in one of the countries that are not prone to such vulnerabilities ensures peace of mind for investors.

If you are looking at setting up an offshore account, you don’t have to look beyond us. At QX Trust Co. Ltd, licensed by LFSA (Labuan Financial Services Authority), we have a team of professionals who have the experience and expertise to provide a full range of services for establishing offshore accounts. The key features of our services are customization and quick turnaround time.