Generally, it is believed that setting up an offshore company is complicated and almost impossible. However, the truth remains that setting up an offshore company is simple, straightforward and can be completed in a matter of days, if you carry out your assignments effectively. The process of setting up an offshore company, especially in Nigeria, is much less complicated than most people believe.
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An offshore business is a business organization that is formed in a country different from the one where the beneficial owner resides. In other words, an offshore company is one that is formed in a foreign country.
On the other hand, an onshore business is one that is organized and operates within the boundaries of a country, while an offshore company is one that performs all of its operations outside the borders of the country where it is incorporated.
An offshore business is not subject to metropolitan taxes, since it operates as a non-resident corporation, with all of its financial activities taking place outside of the country’s borders.
Business organizations that migrate to or are established in an offshore jurisdiction can avoid paying taxes if their transactions and dealings are limited to outside the country’s borders.
Some of the benefits of setting up an offshore business include:
- Privacy
- High confidentiality
- Tax reduction
- Assets protection
- Legal protection
If you’re thinking of creating and operating an offshore business, it is important you look into certain factors that will help you decide how to structure the business and which offshore location would work best. Some of these factors include:
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State Your Reasons for Establishing an Offshore Business
Otherwise known as “discover your why”. Why do you want to set up an offshore business? What specifically do you hope to gain by creating the company in an international location versus a domestic one? You may be motivated by numerous reasons, however, you can begin by specifically identifying the reasons that led to considering the idea. Write all of the reasons down and refer back to them as you search for the ideal location.
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Recognize Your Target Customer Base
Who are your customers? Where do they reside more? What type of consumers do you want to reach? Being close enough to the targeted base also makes it easier for your sales personnel to visit your potential customers regularly. It also makes it convenient for easy delivery of goods or services without any unnecessary delays. A proper transport system that can efficiently handle imports and exports should also be put into consideration when finding a location for your offshore business.
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Consider Applicable Laws in your Set Location
Every country has its own rules and laws guiding it. It extends to tax and levy being paid at one point or the other. Depending on what you want to accomplish with the operation, the laws in one country may be somewhat prohibitive, while a different one would benefit and protect your company. Knowing what type of commitment and rules you’ll be following, and the protections the company will enjoy, influences where to base the business and the type of incorporation you choose. It is also important to study the banking laws existing in your set location, because you might find that banking laws in some nations are more favourable to your business structure than others.
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Consider the Country’s Infrastructure
You will need a location that has supporting infrastructure like utilities that would help ease your business process. Ensure you don’t make assumptions, by all means. Get your facts right and find out precisely what sorts of modern resources are on the ground, and if they will be sufficient. The last thing you want to do is make plans for a business only to find that basic amenities like power sources will be hard to secure. Making your research and understanding these things will keep you from wasting time and effort.
The point of setting up your business offshore is to take advantage of benefits that are not likely to be found in your native country. Proper research will make it easier to determine where to locate your business and ensure it thrives.
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This article was first published on 30th November 2021
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Grace Christos Is a content creator with a proven track record of success in content marketing, online reputation management, sales strategy, and so much more.
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