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http://robertgirga.com/RobertGirga/best-uses-of-an-offshore-corporation/Best Uses of an Offshore Corporation
Individuals and companies often decide to set up an operation outside of their nation of origin. Why do they do so and what are the best uses of an offshore corporation? First and foremost many world economies are growing while the European Union, Japan, Canada, and the United States are stagnant by comparison. Brazil is becoming the economic powerhouse of Latin America with stiff completion from Mexico. Russia has become the world’s largest oil and gas producer. Profiting in Panama has become popular as the small nation at the tail end of Central America grew its economy as fast as China’s during the first years of the century and never saw a recession. With all this growth around the world why limit a company’s business to regions of slow economic growth?
Let’s take a look at the best uses of an offshore corporation, how taking a business offshore saves on overhead, reduces taxes, and can put your business closer to new and expanding markets.
Tell Me about Tax Havens
Setting your business in a tax advantaged jurisdiction may be sufficient justification for going offshore and one of the best uses of an offshore corporation. Many nations do not deduct bank interest throughout the year. Many nations do not tax income that originates outside of the country. Many offshore locations are decidedly business friendly in their efforts to bring investment into the country. This attitude often results in significant tax breaks that last for years.
Effective Nations in which to Do Business
It is possible to set up a company headquarters in one offshore location, buy products from others, and sell to third locations. In the age of the internet much of business can be handled at the click of a button while profits can be banked in a nation that does not tax profits gained outside of the country. Salaries can be a major cost of doing business as can benefits. Finding a nation where salaries are low and benefits such as health care are covered by the government can result in significant savings in doing business. Countries such as Panama are transportation hubs which adds a completely different factor to business productivity.
Setting Up Shop Close to Your Suppliers and Your Customers
There is nothing like personal contact even in the internet world. When an important production facility is having problems management needs to be close enough to handle the problem. Having office operations offshore and close to suppliers, manufacturing facilities, and customer base can be very cost effective.
Close to the Growth
Brazil is growing and Mexico is catching up. Russia is moving to exploit its natural resource base in on the Pacific. Little countries like Panama are outgrowing debt ridden Europe. One of the best uses of an offshore corporation is to be where the economic action is, to meet the people, deal with the problems