The Use of Offshore Companies Today.
There has been a great deal of publicity recently regarding the use off offshore accounts. At the recent G20 meeting in London it was decided to that the OECD would report back to the G20 group in November 2009 with a list of countries that are considered ‘unco-operative tax havens’.
A great deal of this publicity refers to private or individual ‘offshore bank accounts’. As a Company we have always discouraged the use of private offshore accounts for the purpose of avoiding tax. The European Savings Tax Directive came into effect on the 1st July 2005 and applies to ‘natural persons only, resident in any EU country, on interest received on savings instruments, deposit accounts etc. At this time it does not affect interest paid to companies.
IBC (International Business Companies) commonly know as ‘Offshore Companies’. IBC Companies continue to serve a number of very useful purposes and are perfectly legal, although it is essential that owners of such Companies file returns for repatriated funds in the proper way. Now the positive aspects of using IBC Companies:
1. International trade: IBC Companies are ideal vehicles for international business. We highly recommend the Seychelles as a great jurisdiction for your IBC Company. An IBC Company can trade anywhere in the world but cannot trade in its home jurisdiction. Import and export transactions can be made more tax efficient using an IBC Company.
2. Internet Companies: Companies trading on the internet usually trade on
on an International basis and can in circumstances encounter cross boarder tax problems. Using an IBC Company can solve this problem
3. Confidentiality: An IBC Company gives confidentiality and provides asset protection. Many clients choose IBC Companies to hold assets such as property, boats, planes and intellectual property such as trade marks, patents, copyrights and franchise agreements
4. Consultancy and Employment: Many consultants, real estate agents, security consultants, musicians and entertainers receive income on an International basis. The use of an offshore (IBC Company) can be a tax efficient structure for such Companies and individuals.
Written by Charles Farran, Managing Director, Amanda J Molyneux & Co. www.molybank.com.
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