The concept of an offshore company. What is offshore in simple words? History of the emergence of offshore zones

Turning on a well-known talk show once again, you can observe how the audience is indignant at the fact that some oligarch took the “people’s” money offshore or the news says that a company withdrew money through offshores. It would seem that we should also be indignant, but it becomes more interesting to find out what an offshore is and maybe it’s worth withdrawing your money there? This article will explain what offshore companies are in simple terms.

Optimal taxation options, opening companies and accounts in offshore zones, assistance in choosing ready-made offshore companies.

Which is correct: offshore or offshore?

First you need to understand the spelling. It must be said that there are no clear rules. Many dictionaries use the form “offshore,” and Microsoft Word considers this form to be correct. Wikipedia uses "offshore". Therefore, the article will use a word with two “f”. To completely close the topic of language, it is worth giving the translation of this word from English: offshore - “outside the shore”, which quite accurately describes the essence of this phenomenon.

What is offshore?

An offshore, or more precisely, an offshore zone, is the territory of a state in which special tax conditions apply to foreign companies (there may be no taxes at all).

In addition, offshore companies do not require company owners to make financial statements or conduct any audits. Another advantage is the confidentiality of all data about the company, that is, it will not be possible to find out the true owners and the amount of funds spent through the company simply out of curiosity. It is clear that there are quite a few advantages; they will be discussed in more detail later. It is worth noting that due to such advantages, almost 10% of all money on the planet is stored in these zones. For Russia, these statistics are even more depressing: 90% of large Russian business and the same number of fleets with Russian shipowners are in offshore areas. This will also be discussed further below.

Where are offshore companies located?

It should be noted that there is no exact list of offshore zones, since they differ in conditions, and different countries where cash flows come from may relate to these zones differently. There are several classifications of offshore zones.

Conditional classification:

Island offshores, where there are no taxes and where accounting reporting is not required. These include the following states: Bahamas, British Virgin Islands, Cayman Islands, Belize. The conditions offered in such zones guarantee complete confidentiality about operations and their owners. As a result, the zones have a dubious reputation, since criminal operations for money laundering or promoting terrorism can take place through them.
Offshore zones of increased status. These include Liechtenstein, Monaco, Gibraltar, Hong Kong, Macau. These countries have good tax incentives for some activities, require financial reporting, and disclose ownership information upon request. But companies registered in these zones are much more trusted by partners.
Some zones in countries where there are tax incentives for non-resident companies of that zone. For example, in Russia, this is the Kaliningrad region, where there are benefits for companies registered in special economic zones. Otherwise, the requirements for companies are the same as for all other companies registered in this country.

There is also a classification by the Organization for Economic Co-operation and Development (OECD), which includes the most developed economies peace. This classification takes into account how countries with tax havens apply tax standards proposed by the OECD. As a result, all countries are divided into two categories: the “grey” list and the “white” list. The “gray” countries include those countries that have decided to apply international tax standards, but have not yet sufficiently implemented them: the island states of Nauru and Niue. The “white” list now includes all other zones with tax benefits.

The Financial Action Task Force (FATF), an intergovernmental organization that develops global standards in the field of combating money laundering and the financing of terrorism, has developed its classification of offshore zones. She has a “black” list, which includes Iran and North Korea - countries with highest level risk of money laundering and terrorist financing. The “dark gray” list includes countries that have national regimes that have failed in terms of strategy, or those countries that do not implement FATF recommendations. The list includes: Vietnam, Indonesia, Yemen, Kenya, Myanmar, Pakistan, Sao Tome and Principe, Syria, Tanzania, Turkey, Ecuador, Ethiopia.

The situation with offshore companies in Russia

Because official list there are no offshore zones, Central bank Russia publishes a list of such territories.

Since 2009 the list looks like this:

Caribbean countries:	Pacific countries:	European countries:	Indian Ocean and Persian Gulf:
Anguilla	Brunei	Andorra	Kingdom of Bahrain
Antigua and Barbuda	Republic of Vanuatu	Gibraltar	Union of Comoros
Aruba	British Virgin Islands	Principality of Liechtenstein	Republic of Mauritius
Commonwealth of the Bahamas	Hong Kong	Republic of Malta	Republic of Maldives
Belize	Macau	Principality of Monaco	United Arab Emirates
Bermuda	Republic of the Marshall Islands	Republic of San Marino	Republic of Seychelles
Grenada	Montserrat	Isle Of Man	Liberia (Africa)
Commonwealth of Dominica	Labuan	Channel Islands
Netherlands Antilles	Republic of Nauru
Saint Vincent and the Grenadines	Niue
Saint Kitts and Nevis	Cook Islands
Saint Lucia	Republic of Palau
Turks and Caicos Islands	Samoa
Cayman Islands

The accounts of offshore companies registered in these territories contain many billions of dollars withdrawn from the Russian Federation. Why does this happen?

Taxes

In Russia

The basic income tax rate is 20%, the dividend tax is 9%

Offshore

Taxes are low or non-existent.

In Russia

Let's say that a certain organization receives a profit for the sale of its products in the amount of 1 million rubles. The tax on this amount will be 200 thousand rubles.

Offshore

The same organization sells the same products to an offshore company (its owner is the same as that of the organization) at a reduced price with a profit of 200 thousand rubles. The remaining profit (800 thousand rubles) will be received by the offshore company by reselling the goods. In all these operations, the goods are not exported outside the country. Tax is paid only on 200 thousand rubles earned in Russia. Only 40 thousand rubles.

The bottom line: the organization saved 160 thousand rubles on taxes. Offshore schemes can be used to reduce other taxes.

Secrecy

In Russia

About the final beneficiaries large enterprises can be found in the annual financial reports.

Offshore

The owners of the companies are not disclosed.

As a result: A rich Russian, who does not want to reveal himself, registers a company offshore. Next, this company buys shares Russian company. Thus, the business is protected from cases of persecution.

In addition, opening an offshore company and managing it is much easier and cheaper than in Russia.

Will the withdrawal of money from the country stop?

Bills have been adopted, amendments have been made to the tax and civil Code aimed at deoffshorization of capital. A tax amnesty was even declared for money transferred outside the country. But as time shows, cash flows from the country are not decreasing, but only increasing. If in European and American enterprises no more than 1% of assets belong to offshore companies, then in Russia this percentage is much higher and is unlikely to decrease soon.

In legal terminology, the definition of offshore began to be used in the 50s of the 20th century in the USA from the publication of an article about one well-known company at that time, which moved its head office to another country and thereby avoided increased attention by the US government.

In this article we will talk about what it is and the principles of working with it.

Basic terms and definitions

Literally, the term offshore is translated from English as “offshore”, that is, outside a given country, therefore it is of an economic and geographical nature.

An offshore zone is a state or part of it - a region, a state on whose territory they operate special conditions for registration and conduct of business by non-residents, that is, citizens of other countries.

The emergence of these zones is due to different approaches to the tax policies of states and the lack of unified international laws. Offshore zone for management economic activity a non-resident can essentially be any state whose tax policy compares favorably with the politics of his native country.

How economic phenomenon Such schemes appeared in Ancient Rome, when traders, in an attempt to reduce their tax costs, bypassed or bypassed areas with high tariffs, trading on neighboring islands.

Today, an offshore company is considered to be one that does not conduct its business activities in the country of actual registration, and its owner is a non-resident, that is, a citizen of another state. For example, an American who has registered his company in Cyprus, but conducts his main activities in the USA, becomes the owner of an offshore company.

Offshore business includes companies that are engaged in a variety of activities - trading, financial, construction, manufacturing. We can highlight the main characteristics that classify an enterprise into this category:

non-resident of the owner in relation to the country of registration;
commercial activity is conducted outside the country of registration;
simplified registration procedure;
confidentiality and anonymity in relation to the owner of the company;
absence or significant simplification of currency and financial control of activities, accounting and audit;
low taxation or replacing it with a single fixed fee.

Offshore zones

Offshore zones or, as they are more correctly called, jurisdictions, are a state or territory in which tax benefits apply to non-residents and simplified registration of a legal entity. They are conventionally divided into three categories:

island territories - usually small islands in the Caribbean Sea, Indian and Pacific oceans;
European states;
administrative-territorial entities in the USA, Malaysia and some other countries. Some experts include Russian territories here - Kalmykia and Altai Territory.

The emergence of offshore zones was historically and geographically determined. In the 1970s, Britain's island colonies gained independence and became independent states. But at the same time they were faced with the problem of insufficient budget funding.

Since all these states are islands and often have a small territory, their economy and industry are poorly developed, and the extraction of natural resources is very limited. As a colony, they received subsidized aid. Having lost it, governments had to think about alternative sources of filling the state treasury, and registering companies offshore became an acceptable solution.

Many European countries also have similar budget financing problems and, in order to attract foreign capital, are simplifying the tax system and registering enterprises.

These include Switzerland, Austria, Liechtenstein. Companies registered in these states have positive reputation And high level customer trust. However, these countries have more stringent tax systems, mandatory accounting and auditing compared to island countries.

Island zones include Seychelles, Bahamas, Virgin Islands, Bermuda, Cayman Islands, Cyprus, Panama, Trinidad and Tobago, Dominican Republic and others. The peculiarity of the island zones is the complete absence of income and dividend taxes, a cheap and simple registration procedure, complete confidentiality of the owners, but at the same time the dubious reputation of the company.

Registration of a company offshore

As noted above, opening companies in free economic zones is very simple; you don’t even need to be in the country. Nowadays, these issues are being pondered by specialized firms that analyze such zones, compile comparative characteristics to simplify the choice of country, they deal with legal and financial issues - as a result, the client receives a ready-made enterprise in just a week. In such companies you can purchase an already existing offshore company with a history and “experience” of work.

Thrifty owners can also easily register a company on their own, for this you need:

First, analyze the countries and determine the most favorable tax conditions for your type of activity.
Secondly, organize a secretarial bureau that will perform a representative role and rent premises for it, thereby obtaining the legal address of the enterprise. If the owner wants to remain completely in the shadows, he can attract local residents who willingly agree for a small fee.
Thirdly, it is necessary to pay the state registration fee, the amount of which in island zones varies from 50 to 800 US dollars, and in European countries can reach several thousand.

A ready-made company can be purchased for $300, but the price maximum can exceed $10,000. Registration fees must be paid annually, and some countries use a single flat tax system. Therefore, there is no economic benefit for a mid-level entrepreneur to maintain an offshore company.

There are also certain restrictions on activities, including a ban on conducting business activities within the country of registration. This provides some financial stability to the state and eliminates the risk of economic takeover by international companies.

Advantages and disadvantages of working offshore

Offshore companies are created to achieve certain goals:

minimizing the amount of taxes and fees;
concealment of a financial transaction;
concealment of company owners;
removal of “criminal” capital from the country;
concealment of the owner's real income;
lack of currency and financial controls.

The scheme for minimizing the amount of taxes paid is simple - assume that in country X the income tax rate is 20%. An enterprise in country X, carrying out trading activities, receives 1 million US dollars of net profit, of which it pays 200 thousand dollars to the state treasury.

The same enterprise can sell goods to an offshore company at a lower price, receiving a profit of 200 thousand dollars, and the offshore company, having resold the same products, receives the remaining profit - 800 thousand dollars. Income tax in country X is paid in the amount of 40 thousand dollars, in offshore zones it is zero. The result is that the company saves 160 thousand dollars, which it can receive in the form of a loan from a foreign company.

The same schemes are used to evade value added tax, personal income tax, various duties and excise taxes.

The insurance scheme can be viewed at real example the well-known transnational corporation Phillips. An insurance company, Kingstone Captive Insurance, was registered in Bermuda, whose main activity was insuring Phillips operations.

The manufacturer of well-known equipment transferred to this company most of its profits as an insurance payment, thereby reducing its taxes, and Kingstone Captive Insurance annually credited Phillips for the same amount. It is reliably known that Phillips saved more than $18 million under this scheme.

The big advantage of offshore companies is secrecy of transactions and confidentiality of information about owners. In many countries statesmen It is prohibited to engage in entrepreneurial activities in order to avoid lobbying for dubious and unprofitable legislative projects for the country.

Registering a company on Seychelles, a deputy or official receives guarantees of complete anonymity and can calmly promote his commercial activities, while evading taxes and declaring his income as individual.

According to approximate estimates of experts, more than 12 trillion dollars are stored in the accounts of offshore banks, this is approximately one third general condition all the millionaires in the world.

Lack of exchange controls allows for profitable transactions on the securities market and currency exchanges; approximately 80% of such transactions are carried out in offshore zones. Lack of accounting and mandatory audits leads to complete misinformation about the nature of the company’s activities and prepares fertile ground for criminal operations and transactions. The disadvantages of doing business in offshore zones for companies boil down to restrictions on such activities by the state.

Impact on onshores

The activities of offshore companies have a negative impact on onshore states. Onshore is a company that is registered in the territory where the main part of its activities is concentrated. Here open accounting is maintained according to the full tax scheme. This is the direct opposite of offshore. Such states suffer mainly from under-receipt of taxes and, accordingly, under-formation of the budget.

Many experts are inclined to argue that the global economic crisis arose precisely because of the spread of the activities of offshore companies. Approximately 90% of Russian large businesses have been transferred to free economic zones.

With increasing financial instability in the United States and the national budget deficit, the government took anti-crisis measures that led to increased taxes. Large companies, in response to these measures, transferred their business to offshore zones, mainly to the British Virgin Islands, where more than 800 thousand enterprises are registered.

Legality of working offshore

From the point of view of the company’s activities within the offshore zone, one can say about the legality of its economic and financial transactions. But from the point of view of the state from which he left this business, the complete opposite is observed.

As described above, the state is losing huge amounts of unpaid taxes, in addition, there is a significant outflow of capital and real investment to other countries, which does not support or develop the national economy.

Many offshore companies carry out illegal activities to finance terrorism, due to the fact that in free jurisdictions there is no financial control over transactions and there is no mechanism for open contractual relations; all activities are completely secret.

From this point of view, offshore companies pose a great threat to the entire society, therefore special organizations have been created that are developing measures to prevent the development of such businesses:

One of these global organizations is FATF. Its recommendations on preventing the financing of terrorism and laundering of illegal proceeds have been accepted by the governments of most countries.
OECD– organization economic development and cooperation - also maintains lists of countries and territories with simplified tax system and opaque financial and economic laws.

States that support the recommendations of these organizations more closely monitor firms that cooperate in their economic activities with companies from generally recognized offshore zones, limit the amounts of their transactions, carry out full identification of enterprises and their owners, and exercise control over the pricing of products to avoid unreasonable understatement prices

A story about how to choose an offshore company

The video shows the process of choosing an economic zone for doing business:

Offshore(Also offshore or offshore company ) is a certain territory of the country, or the country as a whole with favorable conditions conducting entrepreneurial activity for foreign citizens (non-residents) in relation to this country.

Description of offshore companies in simple words

In simple terms, these are foreign countries or their states in which you can open a company or conduct business without paying any taxes or fees.

Among these favorable conditions are low or no tax rates, simplified reporting and document flow, and the ability to hide the owners of a particular company. Therefore, offshore companies can also be used by scammers, including for transferring money that will simply be impossible to find later.

History of origin

The very first offshore company in history was noticed in the USA in the 1950s. Then one of the enterprises that the US government wanted to see on its territory and receive tax payments from it, the owners registered in another country with low tax rates.

There is no clear definition of offshore among economists. Some associate this term only with the geographical location of a particular company in relation to the place of residence of the owner, others - with the economic and financial side (in terms of profitable financial and economic conditions For the company).

It cannot be said that offshore companies are a modern phenomenon. Its roots go back to ancient Greece. There, a tax on exports and imports was introduced for the first time. To avoid paying these taxes, merchants looked for nearby territories and smuggled their cargo there.

This phenomenon came to Russia already in the 90s. A Swiss company then became the first offshore company in Russia.

The concept of an offshore zone

Offshore zone– this is the territory of a separate state or part of a state, within which foreign companies are provided with special conditions for registering and conducting their activities.

The presence of such zones causes indignation in some states, since due to low taxation, manufacturers transfer their capital to other countries, thereby avoiding paying taxes to the budget. Offshore zones differ in their investment potential, legislation, level of infrastructure development, and political situation.

Companies in modern world, can and are able to invest their investments not only in domestic companies, but also in offshore zones, which is generally a more profitable investment.

The most common offshore zones are the countries of Asia and Latin America. There are very highly qualified investment professionals and a favorable investment climate.

In Hong Kong, the tax rate is the same for everyone. This zone is recognized as the most profitable among all offshore zones.

The offshore zone as a whole includes 27 territories of the world.

Jurisdictions

Offshores are also commonly called jurisdictions.

There are several jurisdictions where you can register your business, for example:

Island offshores

These are small islands located in the oceans. They are distinguished mainly by the complete absence of tax payments, the possible absence of any financial statements, confidentiality of information about company owners.

But there is a possibility that when registering your company in an island offshore, it will not be popular with large manufacturers and suppliers, since rather dubious companies are registered in this offshore. The island offshore attracts investors in all possible ways, since own production There, basically, there is simply no such thing.

European offshores

Companies with a very high and prestigious status are registered there and are very popular. A European offshore is different in that you need to pay taxes, but there are certain benefits for some types of activities, you need to keep both tax and financial records, the names of the owners are also not kept secret. It cannot be said unequivocally that these territories are offshore, but this practice is observed quite often.

Offshores with a special special tax regime

These mainly include territories located in the United States. In Russia there are also such territories, for example, the Republic of Kalmykia or Altai.

When a company moves to offshore, the state loses all payments obligatory for this company to the country’s budget. The owner saves on payments, thereby increasing his profit. In various sales or purchase transactions, mandatory payments are also not paid, and the owners of these companies are hidden.

There is an opinion that it is precisely because of the presence of such offshore zones that global economic crises arise, since money that should have gone to the state budget goes into the pockets of the owners in the form of net profit.

In the Russian Federation, company owners can be identified by annual reporting. It reflects all persons of the company who have at their disposal more than 5% of the company's shares, in offshore areas - it is almost impossible to recognize them. This is a great way to be the owner of a company and hide it.

In Russia, registering a legal entity can take quite a long time and spend a certain amount Money For this, in offshore companies you can buy a ready-made business right away, or register in a week. But most big advantage is the opportunity not to maintain any reporting documentation, that is, not to disclose the company’s revenue.

Offshore companies

An enterprise can be classified as offshore if:

the owner is a resident of another country;
the company is registered in one country, but is active and receives revenue in another;
the company is registered using a simplified method and in a short time;
information about the owner of the enterprise or firm is missing;
there is no control over the company’s activities on the part of financial structures;
no records are kept and there is no other mandatory reporting;
no payment of taxes and other obligatory payments.

Island territories are most dependent on offshore companies, since they are very poorly developed and do not have their own companies. With low taxes and a simplified system for conducting company activities, they attract at least some capital into their economy.

Registration of a company in an offshore zone

In order to register a company in an offshore zone, it is not necessary to travel to this country. Now you can find great amount companies that are ready to help you with this and do everything without your participation. They will help you choose an offshore company specifically for your activities.

An appropriate analysis of all offshore companies is carried out and the offshore company that is most profitable from all sides is selected. And after 7 days you have the opportunity to get a company anywhere in the world without leaving your home permanent place residence. Such specialized companies can offer you both to register a new company or to purchase an existing one.

But all this comes at a certain cost. If you are not prepared for the additional expense, you can try to register a company yourself.

To do this, you will still need to analyze all countries and choose the most suitable one for your type of activity. To obtain a legal address for your company, you will have to rent premises in an offshore country and hire at the first stages a person who will represent the interests of your company.

If the owner wishes to remain secret, experienced businessmen attract local residents who are willing to become the nominal owners of your company for a small fee. Then you need to pay the company registration, the so-called registration fee. It is annual. It is also possible to pay an additional annual fee. It is this fact that scares away lower and middle-level entrepreneurs, since their profits will be minimal after paying fees.

Pros and cons of opening a company in an offshore zone

The offshore zone is used by company owners in the following cases:

reduce the amount of taxes and fees of the company to a minimum;
hide the company's financial transactions;
remove illegally earned money from the country;
hide the owner's net profit;
avoid control by various financial structures of the country.

Still, the most popular condition is the fact of concealment of purchase and sale transactions by the given enterprise. Some countries prohibit certain economic activities. By creating a company offshore, the owner performs any actions permitted by the offshore country, and the name of this person will be kept secret.

Such actions are beneficial to people with a clearly high status in their country, for example, deputies. They can run a company offshore, make a profit, but not report it on their income tax return. Almost all transactions with securities take place in offshore countries.

The only drawback is the fact that not every activity is permitted in a particular state.

Offshore accounts and banks

Offshore accounts– these are bank accounts that are located in a different country from the country where the owner of the company lives.

Such accounts are safer to use and taxes are paid in minimal amounts. You can open such an account anywhere in the world. Before opening an account in one of the banks, it is necessary to study in detail all the tariffs and conditions necessary for opening and maintaining an account.

All offshore accounts can be divided into specific types, directly depending on the goals pursued by the owner when opening them, namely: corporate, private, settlement, current, deposit, savings, security, transit, operational.

Let's look at these accounts in more detail.

Private accounts

Such accounts are opened by an individual who manages it himself or has a person authorized to do so. Commercial transactions are not permitted on this account.

Basically, such accounts are long-term in nature, that is, they bring profit to the owner, for example, by investing money in various securities. In world practice, there are a number of banks that necessarily have departments specializing specifically in private investments.

Corporate accounts

It is no longer individuals who have the right to open them, but individual entrepreneurs and various legal entities that engage in activities that generate profit for its owner.

These accounts allow you to carry out non-cash payments with suppliers and customers. Such an account is mainly managed by persons with a power of attorney. In such an account you can also store the profit received by the company. The existence of such an account will reduce the tax burden on the company.

Current and expense accounts

Such accounts are used by offshore companies to move their funds. Such an account can be managed remotely, since Internet banking is available, you can receive additional charges on account balances, carry out various operations, and you can open a checkbook. The card account involves the issue plastic card, to which your current account will be linked.

Deposit accounts

They involve storing funds in an account for a certain period of time and receiving additional interest for this. The longer you choose to keep funds in a given bank, the higher interest rate.

The disadvantage is the fact that during the entire period of keeping funds in the deposit account, you do not have the right to cash them out. If you nevertheless decide to close the account or cash out part of the amount, be prepared to pay penalties. However, when concluding an agreement to open such an account, it is possible to provide for the possibility of cash flow, but the interest rate will be significantly lower.

Transaction accounts

The opposite of deposit accounts is operating accounts. These accounts are designed specifically to carry out the maximum number of transactions on your account. The bank can make demands on this account only in terms of the minimum allowable account balance or the minimum annual turnover on this account.

Transit accounts

They are used if the owner wants to further secure all of his transactions and conduct them in strict confidentiality.

Security accounts

They are opened for specific purposes, for example, obtaining a loan, in some countries for obtaining a visa. The money from this account can then be used as you wish.

Before opening such accounts, it is necessary to study all the advantages and disadvantages of these accounts and banks. Banks may charge additional commissions and various fees.

If you have no idea about how banks work with these accounts, it is better to use the services of a specialized company that will help you open an account that is truly profitable for you. However, you need to be careful when choosing this specialized company. If you want all account information to be confidential, choose a specialized company based on reviews and recommendations of other people.

Countries for opening an account

It is important to choose the right country to open an account.

For example, on Seychelles the account is completely exempt from various tax rates, financial statements also not maintained, there is no control.
On Cyprus there is a minimal tax burden, but reporting is mandatory, and accounts are monitored and audited.
The most prestigious ones for opening accounts are Switzerland And Austria.

Account opening procedure and service cost

The procedure for opening an account is also different in all banks. For some prerequisite is the presence of the account holder on the day of its opening at the bank, for others an authorized representative is sufficient, and still others can themselves send a bank representative to you and conclude an agreement to open an account. Some require availability letters of recommendation on you from your business partners.

The cost of opening an account also differs depending on the country in which the account is opened. In addition to this amount, additional fees and payments may be charged, which must be clarified at the stage of signing the contract.

Offshore banks have the right not to respond to requests from various judicial and law enforcement agencies regarding the accounts of their clients, if such an obligation is not documented. Offshore banks provide services only to non-residents and completely refuse to work with local residents.

Summarizing the procedure for opening accounts in offshore zones, it should be said that such an account will allow you to reduce the tax burden, free you from maintaining various reports in whole or in part, reduce control, receive additional investments, and the ability to manage your account from anywhere in the world.

Among the disadvantages, it can be noted that in pursuit of favorable conditions, you can choose a bank with a bad reputation, which can subsequently bring you a lot of inconvenience and problems.

In conclusion, I would like to note that offshore zones help businesses reach the international level, push them to obtain maximum profits, simplify all possible business procedures, and provide security and complete confidentiality to their investors.

Almost all of us have heard about the existence of such a thing as offshore companies, but not everyone understands the meaning this term. What are offshore companies? economically? This financial centers, which attract foreign capital by providing various tax incentives and special offers.

There is debate among legal scholars about what exactly can be considered an offshore, so there is no consensus on this matter yet.

Offshore concept

The first country where the term began to be used was the United States of America. Back in the 50s of the last century, newspapers began to write about this new trend, although people at that time still had no idea what offshore companies were.

Newspaper articles told the story of a financial company that managed to escape government control. The company's managers simply chose another location with a more favorable tax climate. Since then, the concept of “offshore” has both a legal and economic-geographical meaning.

The history of the emergence of offshore companies

As for offshore schemes, they took place back in the days of Ancient Greece. Then a tax of two percent was introduced on the territory of Athens on the import and export of various goods. The merchants in this situation were not at a loss and went around the city by the tenth road to avoid taxation. They began to place products on the territory of small islands, where contraband could be imported and exported without duties.

There are many more examples of similar schemes in which offshore countries participated. So, in the 15th century, English traders took wool to Flanders to sell, where taxes were much lower than in England. And in the 18th century, US entrepreneurs tried to evade taxes imposed by England on the import of products through trade with Latin America.

Offshore jurisdictions

Offshore zones are certain powers or parts of countries where special regime registration and business conduct for non-resident companies. Today there are many offshore companies where it is possible to register a company. Conventionally, offshore jurisdictions are divided into several groups:

European. There is a fairly high status here and, accordingly, the high cost of maintaining an offshore. In these offshore zones there are tax breaks only for certain types of businesses. Not all financial analysts call these territories offshore, because there is no black accounting, but on the contrary, an audit is carried out, data on business owners is open and accessible.
Island. In this case, entrepreneurs can open an offshore company on small islands. In particular in the archipelagos of the Caribbean Sea, the Pacific islands and Indian Oceans There is no concept of taxes. Accounting is practically not kept, and information about the owners of companies is closed, that is, anonymity can be maintained. The downside in this situation is the dubious reputation and distrust on the part of partners and consumers.
Entities of an administrative-territorial nature, where there is a special tax regime. Such territories include some states of the USA, Labuan in Malaysia, as well as Russian areas: Altai, Kalmykia, Uglich, etc.

Offshore organizations

Offshore companies are foreign companies that are registered in the same zone of the state that provides tax benefits. Such companies have the right to operate only abroad, and not at the place of registration.

Which countries benefit from having such offshore companies on their territory? Basically, their creation is encouraged by small states, which, through these schemes, find additional revenue items in their budget.

What are offshore companies, and why do business owners need them? Most main goal their use is to optimize taxes and duties. If you structure this organization correctly, you can get important advantages: data confidentiality, cost optimization, the absence of any requirements for accounting, etc.

It is no longer a secret that many well-known companies use offshore companies in order to reduce tax payments. Among them: BMW, General Electric, Microsoft, Pfizer, etc.

Features of offshore companies

One of the most important characteristics offshore companies is the fact that they are non-resident in relation to the state in which they are registered. This means that all control, management and activities are carried out in another country. As a rule, these companies have tax benefits or are exempt from taxes altogether. It happens that they only have to pay an annual registration fee, which is not a large amount.

The registration process itself is much simpler in offshore countries. There is no need to constantly assemble a board of directors, but the use of nominal owners is permitted. In addition, audits and currency controls are not carried out.

One of the specific qualities of an offshore is the ability to hide as much as possible the data of the owner, who usually hires local people to register the company. However, in most cases, it is not possible to completely hide the name of the beneficiary, as these hired directors must know who they are working for to ensure their financial and legal security.

How to open an offshore company?

There are two main ways to register an offshore company: go personally to the country where the said zone is located or contact a company that helps with the registration of such organizations.

Persons who are familiar with what offshore companies are must also have information about how to open them. And companies that do this usually provide a list of certain services. These include:

Assistance in registering a company, including a complete registration package and obtaining certificates.
Sale of a ready-made offshore company registered earlier.
Opening a bank account in order to place money offshore.
Assistance in conducting activities, including secretarial services, telephone numbers.
Providing nominee managers and shareholders.

Main offshore schemes

Today, there are a great many schemes that help evade taxes and provide higher profits. Economists identify the most common offshore schemes:

agency, in which an offshore company finds any company, hires it as its agent and carries out activities through it;
construction - in this case, the offshore organization is a contractor and receives payment for construction services;
transport, which takes place during international transport;
manufacturing - an offshore company pays for the production services and raw materials of the manufacturing company at meager prices.

In addition to the above, transfer pricing schemes, provision of services, registration of new enterprises, supply of raw materials, etc. are also popular. The choice of one or another offshore scheme depends on the tasks and goals that the company sets for itself.

Hello, dear readers of the blog site. “Offshore zone” is an expression we often hear in stories about the economy.

In this article, we will look at what an offshore is, who uses it, and how to register a business offshore.

Offshore - what is it?

What is offshore in simple words? Let's figure it out. Any legal entity or individual, engaged in entrepreneurial activity, is obliged to contribute to the treasury of the state where it conducts its business. Often the amounts deducted are very large. This is clearly seen in the diagram below:

But there are areas where taxes are extremely low or non-existent. As a rule, there is a fixed annual tax, which is very small compared to regular tax rates.

By locating companies in such zones, the tax burden can be minimized. These tax-free zones are called offshore, which translated from English () means “ offshore", i.e., using a more extensive interpretation of the transfer - outside the state of which the owner of the company located in the tax-free zone is a citizen.

The English version of the word suggests writing it with two letters “f”. Therefore, both versions are correct: "offshore" and "offshore".

An offshore is a territory (possibly an entire country) in which preferential conditions are established for foreign companies to do business.

Typical conditions operating offshore:

Basic terms

Offshore company– a commercial company registered in an offshore zone.
Offshore Bank account is an account opened by an individual or legal entity in a bank of a state where the person is not a resident (that is, is not a citizen of that country). In fact, if a citizen of the Russian Federation has opened an account in a bank of any foreign country, then his account is offshore. But most often they mean a bank account in a country where an offshore zone exists.

History of the emergence of offshore zones

For the first time offshore as a term appeared in USA at the end of the 50s of the last century. One American finance company, trying to avoid total economic and tax control of the state, transferred its activities to a territory with minimal taxation.

The essence of offshore schemes was known in ancient times: after a duty was introduced in Athens on imported and exported goods, merchants began to sell their goods on the islands close to Athens, where there was no such tax.

In Russia Offshore schemes (withdrawal of capital to offshore zones) began to be used since 1991. According to research Russian Academy national economy, in 2017 our country ranked 5th in the world in investing capital in offshore companies.

Advantages and disadvantages of doing business offshore

Why is it profitable for many entrepreneurs to register their company offshore? To this there is a number of good reasons:

simplified and prompt registration (the founder does not have to be in the country where his company is registered and then operates);
zero or partial taxation;
legal activities of the company;
entering the international market;
simplified accounting system;
possibility of opening an account in an offshore bank;
confidentiality;
the opportunity to preserve capital if the owner of an offshore company is declared bankrupt in his own country (capital cannot be confiscated from an offshore company to pay off debt).

Offshore business also has its own flaws, the main of which are possible states (deprivation of tax benefits or even “robbery”, as was the case in Cyprus) in relation to companies that have economic relations with offshore companies.

Countries providing offshore zones

There are more than 50 offshore zones. About 32 trillion dollars of foreign companies circulate in their territories. Below are some of the popular offshore zones today:

*Cyprus since 2014 is not an offshore, but a low-tax country, but it is still often called an offshore zone.

There are several offshore territories in the Russian Federation ( free economic zones): Kalmykia, Altai, Russky Island in the Primorsky Territory, etc.

The assignment of this status to these territories was done with the aim of outflowing Russian capital from foreign offshore companies and attracting it and foreign investment into the Russian economy.

Algorithm for opening a company offshore

Exists 2 options for creating a company in an offshore zone:

Purchase of a ready-made registered company.
Creation and registration of your own.

Both options can be implemented by involving professionals (companies specializing in providing such services) or independently.

A brief algorithm on how to create an offshore company on our own:

choose an offshore zone, taking into account the direction of your future activities and the legal norms of this offshore;
come up with a name for the company (it should not coincide with those already in the registry);
prepare a package of documents:
1. The company's charter (a document that contains an indication of the type of activity of the company and the algorithm of work). The charter must be signed by all founders (if there are several of them), and the signatures must be certified by a notary,
2. Agreement on opening a company (a document regulating the shares of the founders, management format, financial policy firms),
3. Order on the appointment of the head of the company,
4. license, if the type of activity of the company in this offshore is subject to licensing;
pay the state fee for company registration;
send the prepared package of documents to State Register selected offshore zone;
in a few days, if everything is done correctly, your company will be given official status and entered into the register. You will be given a package of documents confirming the registration of the company;
open a company bank account.

The attitude of states towards offshorization of business

The state, which receives taxes from business activities into its treasury, capital flight is not beneficial abroad. In this regard, many countries introduce certain restrictions on transactions with offshore companies, for example, increase taxes for those firms that have business relations with companies registered offshore.

There are no sanctions in the Russian Federation for the offshorization of business (except for increased attention from supervisory authorities), but the government is taking measures against concealing the income of offshore companies owned by Russian citizens.

This is justified by the need to combat money laundering obtained by criminal means. These measures are called deoffshorization.

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