Nowadays many entrepreneurs tend to grow their businesses exclusively in offshore zones. Asking why? The answer is pretty simple – such businessmen are partially exempted from daunting responsibilities of paying taxes, while the only requirement is developing business in the offshore zone. However, as in any other option, offshoring has its own nuances, pros and cons.
Offshore zones benefits
The main advantage of an average offshore zone is lack of taxes, while a home country may oblige a business to tough taxing policy that neither allows normal development nor encouraging potential revenue. In addition, the businessman can take advantage of an opportunity to cooperate with foreign markets, which can significantly accelerate the growth of the company.
Another vital advantage is an ability to open accounts in the most developed countries, which enables you to manage your money at any time, just when it is needed most. Typically, there is no need to submit reports and pass numerous audits. Most importantly, it is not obligatory for business owners to reside abroad to manage their own business; the low and top level management can be delegated to a protege. Offshore zones bribe the businessmen involved in industries requiring passing rigid regulation procedures. Gambling, adult or betting entrepreneurs are likely to resort to offshoring when launching entertainment or online casino website in order to keep out of certification and other complicated processes.
Disadvantages and risks
In particular, the choice of an offshore zone must be carried out with the utmost attention. Moreover, cooperation with popular European firms may be hardly impossible due to the fact that the latter do not trust organizations working in the offshore areas.
Today there are three main types of offshore zones – classic, luxury and others. In particular, the most respectable zones are considered to be those where an entrepreneur must submit reports and pay taxes.
Here is a nutty fact: according to DGFEV, a far-famed German gambling review platoform, more than 50% of European casino revenue goes to offshore-based companies.
By geographical location there are several major offshore zones groups to mention. Caribbean group offers quite standard benefits – the convenience of simple transactions, the lack of audit, accounting and taxation. At the same time entrepreneurs working in this area are typically eligible for full confidentiality of all transactions.
The second group includes a number of islands, including Jersey, Guernsey and Maine. The cooperation schemes offered here are almost identical to the previous group. The only difference lies only in the fact that when you open a company in the offshore zone must be shown all the basic data about the owner.
Cyprus and Gibraltar is another group on the list. With a small percentage tax rate and obligatory audit, these zones are quite popular and prestigious. Actually, launching a company in such offshores is quite costly undertaking.
The fourth group is represented by European countries, such as Switzerland and Luxembourg. The businessmen are mainly subjected to taxation here, but in some circumstances paying taxes is not obligatory.
Finally, the fifth Asian group includes Malaysia, Singapore and Hong Kong. Registration and audit procedures are required here; and if in Singapore and Hong Kong has no taxes, business owners are forced to pay three percent tax in Malaysia.