Tax Haven Benefits
The benefits of offshore financial centres and tax havens are numerous. The main ones, and the reasons why individuals choose to go offshore, are that they offer a range of taxation levels from which to choose plus they allow for the creation of offshore entities to increase privacy in addition to having complex and detailed legislation protecting their investors’ assets. A number of individuals use tax havens under the advice of The Offshore Company UK in order to limit or avoid high levels of tax they pay in the country of residence.
As previously discussed, different tax havens offer different levels of taxation. It is, however, important to bear in mind that because an offshore jurisdiction has zero tax, it is not necessarily the best tax haven to suit your needs. There may be other offshore financial centres that offer different benefits that are more appropriate for you. This is why it is important to speak to an offshore tax haven consultant to ensure that you are getting the best advice for your circumstances, helping you to reduce the risk of exposure to tax competition.
Asset protection is one of the main reasons why companies and individuals go to corporate tax havens. Because of the strong privacy legislation in place in many of these offshore financial centres, it is not possible for a third party to gain access to information about offshore accounts, investments or trusts.
Tax Haven Disadvantages
Some people worry about the inaccessibility of their money as it is located in a far away offshore tax haven. However, in this day and technological age this is not an issue. With the advent of online banking, it is now possible and, indeed, expected in many offshore financial centres that their clients will conduct their transactions online. There is, naturally, always more traditional methods of banking but being able to check balances, move money, make payments etc, etc, from your offshore bank account in your chosen tax haven is simple and instantaneous,
The main disadvantage for offshore companies located in tax havens is that many government and governmental agencies will not accept tenders from these types of offshore entities. These contracts would include defence, civil engineering, education, health authority and other such civil contracts. If your business does not deal with and has no plans to deal with these kinds of tenders, then an offshore company is a very valuable vehicle for you. If, however, your business relies on these kind of contracts, then serious consideration would need to be taken as to whether an offshore company would be appropriate for you.
As with any offshore tax haven product, it is essential that proper advice is taken before making such important financial decisions. It is imperative that the offshore financial centre that you choose suits your asset protection needs and your fiscal requirements. With thirty years experience in the offshore industry, our consultants would be delighted to assist you in determining the most appropriate offshore jurisdiction for you.