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Small Countries Making a Big Impact on the Offshore Investment Biz World
Switzerland is perhaps the best known jurisdiction for company formation services - its reputation as an international leader in privacy laws and corporate offshore banking has made it a household conversational topic. However, with the rise of the international society and an increasingly communicative and mobile population, smaller options have sprung up that are more attractive in some cases, if less well known. We look at the advantages of incorporating your company in a smaller, up and coming jurisdiction.
For UK clients, the British Virgin Isles is a common choice of jurisdiction for offshore investment business incorporation. Banks in the British Virgin Isles have largely English-speaking staff, and quite a stable and transparent legal system. The British Virgin Isles, until recently, levied only income tax and no other duties on local companies and individuals. Now, income tax has been abolished and 'payroll' tax has been made its replacement, with companies and individuals sharing the burden. The US dollar is the local exchange currency here, and exchange controls are non-existent, making BVI a particularly attractive option for investors. Hong Kong and Latin American companies have found the British Virgin Isles generally a preferred offshore jurisdiction, due to similar legal systems and languages.
Anguilla is geographically close to the British Virgin Isles, and offers similar benefits in terms in the eyes of investment management services. The territory was colonized by the British and there is a large English speaking population. The legal system is based on English common law, as is the case for Hong Kong shelf companies and BVI offshore companies. While infrastructure is not extensive, there is a modern airport facility accessible from Florida. Exchange control is non-existent, and while the official currency is Eastern Caribbean dollars, US dollars circulate freely and are available as a base currency for bank account opening.
St Lucia offers most of the practical benefits that other jurisdictions recommended by business consultancy management services. The minimum number of shareholders and directors is 1 each, there is no company secretary requirement, no annual return or audit requirements to fulfill, and most importantly, no tax at all. Offshore investment businesses can elect to pay tax at 1% if they choose, however this is not mandatory. The only drawback, however slight, is that IBCs cannot own real estate or trade within St Lucia. Gambling, banking, insurance and trust management are also prohibited activities for IBCs.
US companies often most comfortable with company formation services and bank account opening in Panama, due to it geographical proximity and closeness to the US. Located in Central America and bordered by Costa Rica and Colombia, Panama is best known for the canal which sees 15,000 ships of traffic per year save thousands of miles on international trips. Telecoms and transport infrastructure here is excellent, and the banking industry is well-developed. IBCs have a choice of over 125 banks in Panama, and are required to have three directors (including a company secretary) and only one shareholder. Nominees are allowed, for privacy reasons.
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