Types of Offshore Companies

1. The Resident Company

A Resident Company can trade in any jurisdiction and whilst it must have a valid address within that jurisdiction for its registered office, its directors (who can be nominees) can be resident in any jurisdiction.

The shareholders can be nominees and details of beneficial owner are NOT required to be lodged at companies registry. A resident company must lodge copies of audited accounts and will be liable for company tax.

2. The Non-Resident Company

A Non-Resident Company in most jurisdictions can make a non-residential declaration at any time from its incorporation. In order to benefit from this tax efficient status, certain conditions must be fulfilled. Whilst the registered office must be in the jurisdiction the majority of the directors (who can be nominees) must be Non-Residents. The shareholders can be nominees, and details of the beneficial owner are NOT required to be filed as public record. Whilst the company will be administered from the jurisdiction, it must be controlled and managed from elsewhere. A Non-resident company is NOT usually required to produce audited accounts or indeed lodge accounts with companies registry. NO TAX is payable in respect of profit or gains, however a small charge, in lieu of tax, an annual duty ranging from £50 to £750 is payable on the anniversary of the incorporation.

This type of company is the most popular type of company used by corporate service providers around the world.

Providing non of the beneficial owners or shareholders are resident in the country, and the company does not trade within its jurisdiction, then it can claim to be non-resident and therefore only pay duty and not corporation/company tax.

3. The Exempt Company

In practical terms, an exempt company, available in some jurisdictions, offers the same benefits as a Non-Resident company. There are however, certain additional criteria that an exempt company might be required to meet. The majority of directors (who can be nominees) must not be a resident in the jurisdiction, but there must be an appropriately qualified company secretary. The company will be administered in the jurisdiction, but the control and management will be elsewhere. An exempt company must not indulge in a range of financial, investment or insurance activities; neither may it be involved in manufacture in the jurisdiction. No resident may have interest in the company. Like a Non-Resident company, the shareholders may be nominees and there are no details of the beneficial owner on public record. Companies accepted in this category are exempt from income tax on the whole of their income.

Non-Resident and Exempt Companies are also often known as IBC’s which stands for International Business Corporations.