What is an offshore company?
Anyone who has ever come across the concept of a “company” or “corporation” will know that it is a legal concept, aimed at creating a new, distinct, separate “legal person”. The purpose of creating such a new corporate body is to legally allocate and put some assets into a new “body”, which would then have its own existence and continuity. A corporation can own and can do much of the same as any private individual. A corporation can own assets in its own name, enter into contracts, acquire titles, rights and obligations, be liable for its actions. So, same like an adult human being, a corporation has it`s own legal personality. Even a corporations` life is quite similar to that of a human being.
A corporation is “born” (by a fact of registration in an official Registrar) and it can “die” (by being dissolved or liquidated). In between, the corporation can go on pursuing its aims, which are usually ones of doing business and making profits.
Every corporation consists of several components. Each component has its own purpose. As this article mainly deals with “offshore corporations”, one may ask what is the difference between an offshore company and a “regular” company? Structurally – there is practically no difference! An offshore company is quite simply the same sort of corporation, only it`s created outside the usual domicile country of its owner(s). So, for example in the wider sense of the word, “offshore” for a French individual can be Spain, Australia … or Seychelles. Quite simply, offshore is something that is NOT onshore, NOT nearby the home. However, for quite some time, the term “offshore” has been coined in a much narrower sense – pointing to a company, which is not only formed outside the domicile jurisdiction of its owner, but also has a number of attractive benefits. For instance, incomes of an offshore company can be legally free of tax! Offshore company is free from onerous reporting and book-keeping requirements. It is free from burdensome capitalization rules. A offshore corporation is not required to register its owners on a public file. It`s fast and easy to register, simple to maintain and operate. That`s what most people would deem as an “offshore company”. However, in terms of internal structure, an offshore company still retains most of the components of the “regular” corporation.