Debunking the Top Five Myths About Offshore Company Formation
Offshore company formation in tax-neutral territories like the Cayman Islands is often associated with illegal activities, but this is not always the case. In this article, we will debunk the top five myths about offshore companies.
Myth 1: Offshore Company Formation is Expensive
Contrary to popular belief, setting up a business in the Cayman Islands can be done for a few thousand dollars, including purchasing a ready-made company. There is no minimum capital requirement, and one shareholder and one director can incorporate the company, which can be a corporation or an individual located anywhere in the world.
Myth 2: Offshore Company Formation is Time-Consuming
Incorporation must be done correctly, and the procedures vary from country to country. It is advisable to hire a licensed and experienced company formation specialist to handle the task. With professional help, business incorporation can often be completed within 24 hours.
Myth 3: Only Tax Experts can Form an Offshore Company
It is crucial to avoid any conflict with regulators by seeking professional assistance from experts in the offshore jurisdiction. They will keep the minimal reporting requirements under control, enabling businesses to enjoy the complete absence of taxes on money earned outside the Cayman Islands.
Myth 4: Offshore Company Formation is Illegal
This myth is unfounded as long as the company is registered and operates within the laws of the Cayman Islands. As a British Overseas Territory, the country follows English common law, and its laws and court systems are recognized globally. A registered office and agent are mandatory, but these can be obtained through affordable service companies.
Myth 5: Offshore Company Formation is for Criminals
While it is possible for offshore companies to be used for illegal activities, most people use them for legitimate purposes. International watchdogs have recognized that the majority of illegal funds are held in banks and financial centers in the United States. The Cayman Islands follows international tax rules and has not been blacklisted by the EU or the OECD as a tax haven.
In conclusion, offshore companies can be a financially prudent decision for individuals and businesses seeking to protect against inheritance tax, reduce personal tax, or simplify conducting business across multiple jurisdictions.