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Offshore Company Formation

Guarantee Your Privacy. Company Formation Tips.

The usual first step in going offshore is to form an offshore company. The only real alternative to this is opening an offshore bank account or other offshore financial account in your own name. While the offshore company costs more than simply establishing a secret offshore bank account, the company immediately provides an extra layer of privacy for you.

Before you can take the first step and create your offshore company, you must determine what you want to achieve with that company. The worst thing to do is to start out tied to a specific tax haven, a specific kind of offshore company, or a specific incorporation service.

Company Formation Agents

Many offshore banks and company formation agents will try to convince you that the offshore companies they offer in their home jurisdiction are perfect for you: even if that is not the case. Offshore service providers will tell you facts about the offshore corporations they have on offer. Some may explain to you how IBC incorporation is perfect for your needs, while others will insist that offshore trusts are the perfect solution.

One of the most striking examples of this hucksterism is the way virtually every business of any kind in Panama will try to sell you a Panamanian Corporation owned by a Panamanian Private Interest Foundation. This is an especially deadly mistake for US persons, who are told that since foundations are not specifically covered in US tax law, that they are the perfect loophole to avoid paying taxes.

The biggest problem with that statement is that it is simply NOT TRUE! Every entity in every country in the world is considered by the United States IRS to be considered either: a charitable institution, a Corporation, a partnership, a disregarded entity or a trust. (Please note that only REAL charities will meet the test of being a charitable institution, otherwise they will simply be considered as one of the other types of entities.)

What is an "Offshore Company"?

Perhaps we should start by defining what an offshore company is. Simply put, an offshore company is one which is either untaxed or pays a very low, often fixed, annual tax. Dozens of countries offer corporations, LLCs, trusts and other entities that could be broadly considered offshore companies. Most of these entities have substantial asset protection elements built into them which can range from safeguards against the invasion of the corporate assets through statutory protections such as "charging orders" to advance secrecy for the principals including bearer shares and nominate directors. Any competent asset protection service can delineate these features for you.

The United States as an Offshore Haven

One amazing, and little known fact, is that the United States can be an offshore tax haven for non-US persons.

Delaware is the company formation giant of the United States. They lead the way in helping non-US persons in incorporating an offshore company (for them) in Delaware. They take advantage of a provision in the United States tax code which allows single owner LLCs to be taxed as "disregarded entities". This means that the company will incur no US tax on any income earned outside the United States. And even though the company can have a US tax number, it will not be required to file a US tax return, unless it has US income. So many Russians have been incorporating LLCs in Delaware, that bankers in the Baltic states next to Russia have tightened their restrictions on US companies in order to prevent criminal elements from within Russia opening bank accounts under the guise of these companies.

Similar problems have arisen from Nevada corporations so that they are often considered suspect as well.

It is a fact that companies from various places go in and out of favor as scandals arise from their use. (It is amazing to me that similar sentiments do not attach to onshore companies where far more and far larger scandals, scams, and frauds occur.)

Choosing a Jurisdiction for Your Offshore Company

In order to avoid this problem, Capital Conservator Group has sought out other jurisdictions within the United States that have LLCs, the formation of which can provide offshore companies for non-US persons without the taint of the Nevada corporation or the growing disfavor of the Delaware company.

Because Capital Conservator’s philosophy dictates that we permanently tie ourselves to no specific jurisdiction, bank, or location; we constantly seek out the best partners possible for company formation, asset protection services, anonymous offshore banking, offshore financial services and secrecy.