When considering the creation of an offshore company, choosing the location is crucial. There are many possible jurisdictions around the world, but they do not offer the same benefits or the same level of security.
It is therefore recommended to carefully compare the territories before choosing where to register your company.
How to choose the location of your offshore company?
Tax benefits
Compare the tax system offered by each jurisdiction and check whether it truly aligns with the company’s objectives.
International reputation
The territory's good reputation can facilitate relations with banks, partners, and government authorities.
Political and economic stability
It is recommended to favor a stable jurisdiction in order to limit risks related to the political and economic environment.
Privacy, costs, and administration
The level of confidentiality, operational costs, ease of administrative management, and regulatory requirements must also be considered.
Do not overlook the banking system
It is also recommended to check the quality of the banking system before beginning the process. For an offshore structure, access to a high-performing and stable banking environment can be just as important as the tax system itself.
Which country is best for setting up an offshore company?
Choose a jurisdiction with a strong international reputation and both political and economic stability.
Dubai and the United Arab Emirates have a real economy and an attractive environment for international companies.
The advantages of Dubai
Corporate income tax and wealth tax
In Dubai, there is no corporate tax or wealth tax.
Capital gains and profits
There are no taxes on capital gains or profits.
Dividends
There is no withholding tax on distributed dividends.
VAT
There has been VAT in the United Arab Emirates since 2018, but it does not apply to offshore companies.
Dubai is not the only possible destination
Of course, Dubai is not the only jurisdiction where you can register your offshore company: Florida in the United States, Singapore, Switzerland, etc.
The choice should be made based on your project, the planned activities, the jurisdiction’s reputation, and the applicable regulations.
Which destinations should be avoided?
As you now understand, tax havens are not all equal. In 2015, the OECD established a blacklist to consider before choosing the jurisdiction for your offshore company.
The countries on this list are: Andorra, Anguilla, Antigua and Barbuda, the Bahamas, Barbados, Belize, Bermuda, the British Virgin Islands, Brunei, the Cayman Islands, the Cook Islands, Grenada, Guernsey, Hong Kong, Liberia, Liechtenstein, the Maldives, the Marshall Islands, Mauritius, Monaco, Montserrat, Nauru, Niue, Panama, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Seychelles, the Turks and Caicos Islands, the US Virgin Islands, and Vanuatu.
Not all jurisdictions are suitable for the same activities
Some destinations may be better suited to international transactions, while others may be more suitable for European activities or certain types of companies.
Before you get started, take the time to study the jurisdiction’s reputation, advantages, restrictions, and banking environment.