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Creating an Offshore Company - How to Decide

Fri, 11/09/2012 - 4:26pm | by monicadear

If your'e looking to start up a new businesses with an international focus, it may be in your interest  to review the potential for offshore company formation, which allows you some additional corporate privacy and protection, as well as tax advantages for certain types of companies.

Here are six main items to research when forming a company outside of your home country:

 

1) What are the rulings regarding "piercing the corporate veil?"

Most companies need to comply with federal and international regulations regarding money laundering, drug trafficking, and other illegal activities. However, if your company is legitimate, the privacy that protects shareholders may be helped by incorporating in a state where there are strict policies about releasing the owners' information.

 

2) What is the economic outlook?

\It is beneficial to start the company in an economy that is growing. Look for factors like high or stable GDP, plenty of import and export trade, construction/expansion, and infrastructure-building such as adequate roads, highways, buildings, and well-educated and trained human resources.

 

3) What is the cultural status?

If working abroad, make sure that the culture is friendly to your own culture, and that your staff can work with a local team with minimal miscommunication or cross-cultural misunderstandings. Many countries offer English-speaking and Western-trained employees and businesses, including India, the Philippines, Panama, and Bermuda and various islands in the Caribbean (British Virgin Islands/Cayman Islands).

 

4) What's the current credit rating for the country?

Countries as well as companies are rated for investment grading by Moody's and Standard and Poor's. Choose a "positive" outlook when finding a sovereign country's credit rating. Also review trends -- is the credit rating on an upward tick or a downward spiral?

 

5) How stable is the country?

Countries with a recent history of civil unrest may not be stable or secure enough, whereas stable governments that are democratic, with well-run and legitimate elections are a better option.

 

6) What is the current banking status?

Banking relies on a well-developed, modernized, digitized banking network, so research the current banking infrastructure of the city or country in which you are anticipating creating the company.

While not for everyone, the potential for developing relationships and business opportunities through offshore financial centers may be a good fit for your needs.

 

Photo by http://www.flickr.com/photos/86931652@N00/4331872047/sizes/m/in/photostream/

 
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