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The Cost of Forming an Offshore Company

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What is an Offshore Company?

Offshore companies are best described as companies that conduct an insubstantial or zero volume of business within their jurisdiction of incorporation. 

More specifically, offshore companies have three characteristics: 

  • Firstly, they should be registered as an entity within the jurisdiction of incorporation. 
  • Secondly, the “incorporators” should be domiciled outside of the jurisdiction of incorporation. 
  • Finally, the company should transact exclusively outside of the jurisdiction of incorporation.

However, most associate the term ‘offshore company’ as a means of increasing tax efficiency.

Where is the best place to start an Offshore Company?

A lot of factors have to be taken into consideration in choosing an Offshore Jurisdiction, namely :

  • Your company activity
  • Your place of residence
  • Your nationality
  • Where your clients and providers are located
  • Your affinity with certain regions of the globe
  • Your willingness to provide audited accounts or no
  • The kind of banking facilities that you need

All these factors have an influence on which jurisdiction you should opt for. The Wingman Formation Company team will gladly review the options available to you to assist you in deciding which jurisdiction would fit you best. 

For clients who would like a rapid incorporation process, a bank account, keep the fees to the minimum and no accounting requirement, offshore jurisdictions such as Seychelles, Belize, or the BVI are often a favorite pick. 

Jurisdictions such as Hong Kong or Cyprus, which are considered to be Onshore Jurisdictions (even if tax rate is low or nil, need companies to submit audited accounts on a yearly basis to the jurisdiction’s tax authorities). 

Also, an important factor in choosing a jurisdiction is to be sure that your company will be incorporated in a country that has a:

  1. Reliable means of communication;
  2. Political and economic stability;
  3. Good reputation;
  4. Sophisticated corporate laws;

All the jurisdictions we work with enjoy the above-mentioned advantages. 

How long does Incorporation take?

Every jurisdiction has its own incorporation timeframe. It will generally take about two to six days to incorporate an Offshore Company. This is sequel to the required documents being submitted and due diligence carried out.

How are Taxes paid?

Most jurisdictions do not impose taxes on profits made or interest earned by the company. 

Some, like Hong Kong, only tax profits made within the jurisdiction, whereas Cyprus charges a 10% flat tax.

What are Shelf Companies?

Shelf companies are corporate entities that have been incorporated by a provider, who holds the company until a purchaser is found. 

Upon purchase, the ownership of the company transfers from the provider to the third party, who then commences trading activity under the company name. The benefits of purchasing an (off the) shelf company include:

  • Reduction in the time it would take to create a new corporation.
  • The appearance of corporate longevity.

Shelf companies are usually more expensive than newly incorporated companies because of their age.

What are the Incorporation Fees for the different Offshore Jurisdictions?

  • Anguilla – $3445
  • Bahamas – $3400
  • Belize – $2900
  • British Virgin Islands – $3200
  • Cayman Islands – $4900
  • Cyprus – $3800
  • Delaware – $3700
  • Gibraltar – $4950
  • Hong Kong – $11,100
  • Latvia – $3700
  • St Lucia – $2300
  • Malta – $6500
  • Marshall Islands – $2400
  • Mauritius – $3850
  • Nevis – $4000
  • Panama – $3000
  • Dubai – $8000
  • Samoa – $4000
  • Seychelles – $8500
  • Singapore – $6000
  • Switzerland – $7000
  • United States – $1900
  • Vanuatu – $4300
  • St Vincent – $3500

What does the Incorporation Fee Cover?

  • Certificate of Incorporation
  • Memorandum and Articles of Association
  • Registered Address and Agent
  • Share Certificates
  • Resolution for Nomination of Directors
  • Dedicated Agent for one year
  • Corporate Account and Debit Card
  • Standard Virtual Office
  • Notarization and Apostille of Documents
  • Company Seal

What are Offshore Company Annual Renewal Fees?

The annual renewal fees are required in order to maintain your company in good standing and to operate and act on its business activities. 

All companies are required to pay annual renewal fees in order to maintain its good standing status. Due dates for the annual fee are determined by the jurisdiction in which the company is incorporated in. 

Annual fees are also required to maintain the registered address of the company. 

If a company does not pay the annual renewal fees by the due date, it loses its good standing, and the bank may close its bank account at any time. 

Authorities may impose a penalty for late annual fees. Also, the company may be struck off the register after a certain period past the due date, this period is determined by the authorities.

What Next?

Have you got any questions or want to start an offshore company?

We can help.

Learn more about Offshore Companies here