Also referred to as non-resident companies, an offshore company is an entity that is incorporated in a country different from where a person resides. The list of benefits that an offshore company brings to individuals or other companies include:



Anonymity - the name of the principal owner or partner is normally kept private and out of any forms of documentation Asset Protection - assets and transactions are protected against liabilities by virtue of the way in which they are organized Financial Assistance - provisions of financial assistance for the acquisition of their own shares is not prohibited Reporting - registrars of companies, based on their jurisdiction and location, require different levels of information Simplicity - unless the type of business falls under the banking or financial category, most jurisdictions make it easy for the set up and maintenance of offshore companies Taxation - overall tax liabilities are usually minimized based on the structuring of profit realization Thin capitalization - (see the definition in Wikipedia); these rules are generally not imposed on offshore companies by the jurisdiction they are in --- exception: banking, financial, and insurance entities





The two primary examples of offshore companies are International Business Companies or IBC’s, and Limited Liability Corporations or LLC’s. (NOTE: some jurisdictions, such as the British Virgin Islands, have recently enacted new legislation to replace the IBC’s with the Business Company or BC.) What is the difference between an IBC and a LLC?



An IBC is registered in a tax haven. This is an offshore company, incorporated as a tax-free entity, and is not permitted to conduct business operations within the jurisdiction of its incorporation. A LLC is a legal business company that offers limited liability to its owners and provides a more flexible type of ownership.



There are 3 types of business category that offshore companies generally fall under;



Company With Share Capital This means the company offers shares. The shareholder’s obligation to this offshore company terminates once the cost of the share has been paid out. Some companies allow for shares to be sold or transferred, some do not. In a liquidation, shareholders are entitled to reap the proceeds of any sale.



Offshore Company Limited By A Gaurantee If an offshore company terminates business due to bankruptcy the member’s agree to pay out up to a maximum limit. The rules of the offshore company are what dictate what a member’s benefits are within the corporate structure. Death ends the member’s relationship with the company.



Protected Cell Company This type of company is normally identified by the seperation of its assets and liabilities into different "cells" in such a way the one cell’s assets cannot pay for another’s liabilities. These companies are primarily employed for unit linked insurance bonds and umbrella mutual funds.