Cheap Offshores for Your Business: Can Low-Cost Offshore Companies Solve Complex Business Problems?

It is wrong to believe you need a million-dollar capital to establish an offshore company. You won’t need that much money to register a cheap offshore. An inexpensive company created in a tax-free jurisdiction can fulfill its business tasks to the fullest extent. Of course, everything depends on the initial goals of a particular business. Still, with the right choice of jurisdiction and the right structure, such legal entities are quite capable of solving even the most complex business tasks.

Characteristics of cheap offshore companies

The cheapest offshore companies have several characteristic peculiarities, setting these legal entities apart from similar ventures. One of their main features is the low registration and maintenance costs.

A few more characteristics of cheap offshores: 

• Low operating costs. Maintaining a low-cost offshore company will reduce the costs considerably. Sometimes, annual maintenance is around $300–$1000.
• Simple structure. In some cases, one director and shareholder are enough to register a low-cost offshore company. Some jurisdictions even allow them to be the same person.
• No requirements for a physical office or resident employees. Low-cost offshore companies are often not required to have an office in the country of registration or hire a local secretary. All they need is a legal address.
• Minimal reporting requirements. Low-cost offshore jurisdictions do not impose strict financial reporting requirements on local companies. Also, an audit is not required.
• Loyal requirements for minimum capital. Unlike more expensive countries with strict regulations for the size of the authorized capital, in low-tax jurisdictions, such requirements are either minimal or completely absent.
• Simplified company registration process. In some cheap jurisdictions, you can register a company in 3-4 days. However, a personal visit to the country is not always necessary. Everything can be carried out remotely.
• Closed registers of beneficial owners. Access to information about the ultimate beneficial owners, directors, and shareholders is often restricted.

Another distinctive and important feature of cheap offshores is the existence of tax benefits. Such structures are often created to optimize the tax burden.

A cheap offshore is not a reason to relax! 

Registering a company in another jurisdiction imposes some obligations on its owner that must be addressed. Having set up a cheap offshore is not a good reason to relax and let things slide.

What should you take into account:

• Even if the place of registration of a cheap offshore company has zero tax obligations, the company owner should still report to the tax service at their place of tax residence.
• Opening an offshore account (for a company or an individual) does not exempt the owner from the obligation to report on it at the place of permanent residence of the founder and asset manager.
• If the ownership share meets the minimum threshold, a shareholder must pay taxes on his dividends, royalties, and interest and submit reports in full compliance with the CFC standards.
• Tax services of any country closely monitor the actions of their citizens, especially those who have businesses and accounts abroad. Automatic information exchange within the CRS is one way to obtain data on beneficiary owners and account balances immediately.

If you own a cheap offshore company, you can use double taxation avoidance agreements to optimize tax payments. However, suppose the company registration jurisdiction has not signed this type of agreement with the shareholders’/founders’ home country. In that case, they must pay taxes according to the established local rules (without benefits, discounts, and other privileges).

Jurisdictions where you can register inexpensive offshore companies:

What tasks can a cheap offshore be useful for?

Offshore companies registered in low-tax jurisdictions are suitable for a wide range of tasks:

• Asset protection. With the help of this offshore instrument, you can reliably protect your capital from lawsuits, creditors, and other threats at the place of your tax residence. Nevis is considered the leader among offshore jurisdictions for asset protection. 
• Tax optimization. The jurisdictions indicated above offer no tax obligations to offshore companies. 
• Making international trade simpler. Cheap offshore companies can be used in foreign economic activities (export, import). They provide flexibility and ease of management of cross-border transactions. 
• International investment. An offshore account allows you to profitably manage portfolio investments in shares, bonds, and foreign real estate. 
• Ensuring anonymity. Since the registers of beneficiaries in many offshore jurisdictions have a closed format, the owners of cheap offshore companies are provided with a certain level of anonymity. 
• IT business and e-commerce. Companies operating in these areas often choose offshore jurisdictions to reduce taxes, protect intellectual property, and simplify cross-border payments.

Inexpensive offshores can be used to create international holdings. As a result, the management of several subsidiaries is simplified, and tax flows between them are optimized. 

Find out the opportunities offered by tax havens and offshore financial centers.

What kind of business is a cheap offshore suitable for?

Opening an offshore company in a low-tax jurisdiction can benefit almost any business sector. However, some countries restrict the types of activities available to non-residents. Therefore, it is essential to pay attention to this important aspect even at an early stage, when trying to select a place to register an offshore company. Inexpensive offshore solutions are primarily suitable for businesses that need to optimize operating costs, obtain tax advantages, and increase confidentiality. 

These can include the following:

• startups engaged in software development, running SaaS (Software as a Service) platforms; 
• online stores, drop shippers, marketplaces; 
• consulting companies; 
• companies providing remote services as an independent contractor: graphic design, programming, translation; 
• import-export enterprises; 
• platforms for managing cryptocurrency portfolios and trading, etc.

The cheapest offshore can also be relevant for companies engaged in traffic arbitrage, CPA marketing, affiliate programs, and advertising platforms. How can you register a cheap offshore company? You should not contact the first intermediary you meet who promises to create an offshore company in an hour and asks for several hundred dollars for their services. It is better to contact proven specialists who offer real support and announce real prices.

Contact us to receive a free consultation on inexpensive offshore registration.