CALMANX
Calmanx (Cyprus) Limited
 International Company Management
Operating in Cyprus

What is an Offshore Company?

An offshore company is commonly set up in a tax haven such as the British Virgin Islands, the Isle of Man or Cyprus. Typically, the Jurisdiction used will have no or very low corporate or personal income taxes, capital gains taxes, reporting requirements, or restrictions on company employment policies.

The company, being exempt from all local taxes and restrictions, may not conduct business within the tax haven itself.

What are the benefits of using an Offshore Company?

Corporate Taxation: Offshore tax havens allow the formation of International Companies that have few tax or reporting responsibilities. This means that money can be saved not only from the absence of corporate taxes, but also from reduced  regulatory costs.

Confidentiality: Offshore companies offer complete privacy. Usually the company shares are held in trust with a simple Declaration of Trust document provided to the ultimate beneficial owner. The use of a Trust whereby the ownership is legally vested in the trustee, has the potential to lead to even greater tax planning advantages.

Conducting Business: International Companies have the same rights as an individual person and can make investments, buy and sell real estate, trade portfolios of stocks and bonds, and conduct any legal business activities. The restriction on this is that the company can not do these things in the country of registration.

Employment and Consultancy Fees: Offshore corporations can contract the services of professionals to employers resident in high tax locations or politically unstable areas. This has been particularly useful to computer consultants who may move from country to country as part of their employment. Using an offshore structure allows the fees to accumulate in a low tax jurisdiction.

Investment Protection: International companies can loan funds to corporations in other foreign countries. Investors may set up, but not directly own, an offshore company that loans funds to a development company set up in another country and charge interest rates that will lower tax obligations and protect the long term ability to repatriate investment funds.

Intellectual Property Rights, Franchising and Licensing: An offshore company can franchise or licence intellectual property rights in other foreign countries allowing the profits to accumulate in a tax free environment.

Protect Assets: In combination with a Trust, an offshore company can avoid high levels of income, capital and death taxes that would otherwise be payable if the assets were held directly. It can also protect assets from creditors and other interested parties.

Ship and Pleasure Craft Ownership: Offshore companies may own or lease ships or pleasure craft and pay no taxes on income derived from the vessels.

Assets and Properties held in multiple Countries: If an investor owns properties in more than one country (something which is increasingly becoming the norm) holding the assets collectively in an offshore company simplifies a sale or probate situation as ownership can be transferred by company shares rather than transferring the actual properties owned by the company.

Inheritance Tax Planning: A non-UK domiciled individual may own certain UK assets through an offshore company. The assets owned by the individual (shares) may be deemed to be non-UK assets and therefore not liable to inheritance tax.

VAT: The Isle of Man operates a VAT system that is applied identically to that in the UK, administered by the Isle of Man Customs & Excise Department. The Isle of Man has a customs union with the UK. This can lead to the combined benefits of offshore status coupled with VAT Registration.