Today offshore banking in Singapore is one of the Republic’s fastest growing industries and according to industry analysis the country will be the fastest growing offshore private banking centre in the world within the next five years.
Since the government of Singapore announced significant changes to its laws of taxation back in 2004 the Republic has grown rapidly as an offshore centre of note.
Today offshore banking in Singapore is one of the Republic’s fastest growing industries and according to industry analysis the country will be the fastest growing offshore private banking centre in the world within the next five years.
The success of the offshore banking centre in Singapore stems from many factors, not least of which is the fact that Singapore has some of the lowest taxation rates in Asia. In 2004 when the government announced far reaching changes to its taxation rules it became an even more attractive offshore centre. Today residents of the Republic are not taxed on income earned overseas and any gains one generates from investments made in Singapore itself remain tax exempt.
Singapore is also one of the few remaining grade A offshore centres that has not signed up to the EU’s Savings Tax Directive, which is probably why the amount of money moved from tax havens within the remit of the Directive to Singapore in 2005 surged. Financial assets of non resident investors managed by private banks in Singapore in 2005 rose by 25% which is believed to be the world’s largest gain.
Many of the major international offshore and financial players such as Credit Suisse, Citigroup, UBS and Societe Generale are increasing staffing numbers in Singapore to manage the influx of private funds, and the Republic is definitely making a name for itself as one of the most secure, private and well regulated offshore banking centres unaffected by the EU Savings Tax Directive in the world.
It’s not just European money that’s flowing into Singapore; with India and China rapidly expanding economically and more wealth than ever being generated in these two countries the amount of millionaires in China and India looking for an offshore financial haven in Asia is increasing rapidly. Within the offshore financial industry Singapore is referred to as the Switzerland of Asia, and while the Republic trails the European offshore centre by five places in terms of its size as an offshore private banking centre, it is rapidly gaining on Switzerland in terms of the assets it has under management.
In 2004 the amount of assets held offshore in Singapore jumped by a staggering 40% and as previously stated in 2005 the amount rose by 25%; predictions for 2006 indicate that the Republic will enjoy another successful year and the short to medium term future of offshore banking in Singapore therefore seems assured.
Singapore bank accounts registration
Tuesday, 6 July 2010
Advantages Of Singapore As An Offshore Jurisdiction
Experts agree that finding suitable instruments for investment holding has been a long and on- going struggle. To make matters worse, recent world economic events have lead many global financial institutions to take more stringent and preventive measures to screen the simple acceptance of funds from undesirable sources. Internal policies implemented by many banks now stand as obstacles for offshore companies that wish to open new bank accounts. As a result, opening new offshore bank accounts can be an arduous process.
A viable investment holding option would be to make Singapore an offshore jurisdiction by incorporating a company in Singapore. A Singapore company can be viewed on par or even better than many other offshore companies. Services and products offered through a Singapore offshore international centre provide clients with wealth maximization and tax minimization benefits.
Many clients believe that it is impossible for Singapore to achieve the same results as other well known offshore jurisdictions, however this is a misconception. Following are some key considerations to support choosing Singapore as an offshore jurisdiction.
1. Incorporate Offshore for Substantial Tax Savings
One of the attractive features of going offshore to Singapore is that it has minimal tax. Recent developments in tax and corporate law in Singapore have made it easy to use a Singapore incorporated company to achieve the same results as that of a traditional tax haven company. Some of the tax and corporate law changes in Singapore include:
1.Singapore has abolished the two-tier tax system. Income of a corporation is only taxed once at the corporate level. Dividend payments by a Singapore company are not taxable to the recipients.
2.Income that is sourced from outside of Singapore is not taxable in Singapore.
3.Capital gains are not taxable in Singapore.
4.The corporate tax rate is 17%.
5.A company (of not more than 20 individual shareholders) with annual turnover of S$2.5 million or less (revised to S$5 million after one year) is exempt from annual statutory audits.
6.Singapore has a wide network of tax treaties. In certain cases, tax treaties can be used for the reduction of taxes in treaty countries where investments are held.
In summary Singapore offers many benefits for an offshore company. Individuals can open bank accounts with ease and hence carry on with financial transactions associated with the company without facing any problems. Singapore is regarded as a jurisdiction of a "premium stature" when compared to other offshore jurisdictions. This "premium stature" gives the investor a competitive advantage with regards to the clients, potential investors and business authorities.
2. Government incentives to support incorporation in Singapore
The Singapore government plays a keen and active role in developing a conducive environment for enterprise growth, nurturing innovative startups, developing key industry clusters, and growing dynamic and innovative growth-oriented enterprises. The government has implemented numerous schemes in line with developing and upgrading infrastructure and creating new market opportunities. For example the SME Management Action for Results (SMART) initiative provides Singapore based incorporated companies with consultancy advice and monetary support to develop enhanced management systems and processes.
The government provides assistance schemes in attaining an Employment Pass for foreign Entrepreneurs who are ready to incorporate a company in Singapore. They also provide Entrepreneurship Training for professionals, managers, executives and technicians.
To alleviate the financial burden, the government has financing schemes to support the growth of SMEs. The Bridging Loan Program (BLP) provides loans of up to $5 million for local and foreign SMEs with a minimum 5% interest rate for loan tenure of 4 years and below. The Business Angels Funds provides Singapore-based companies a co-investment financing option from pre- approved angel groups, up to $1.5 million in matching capital. SPRING Singapore is a government department tasked with growing innovative companies and fostering a competitive SME sector.
It is apparent from the numerous government initiatives that Singapore provides a potentially profitable platform for company incorporation. The assistance and financial schemes help to create an environment conducive for company set up. Entrepreneurs who fulfill the stipulated criteria can easily attain government assistance to set up and grow their business operation.
Eligible financial introduction
Friday, 2 July 2010
How To Set Up An Offshore Company
Whether it is to save taxes, achieve greater business freedom, protect assets, minimize reporting, or maintain privacy, having an offshore company (a company that conducts business outside the country of incorporation) can be an optimum business solution. Offshore company formation is popular amongst international entrepreneurs, independent contractors, consultants and traders.
Setting up an offshore company is simple with the help of a corporate services company. The typical set up procedures are as follows:
1)The hired consulting company collects the required due diligence from the client.
2)The consulting company provides the client with a detailed project plan, which includes steps to incorporate the potential offshore company.
3)The consulting company proceeds to register the offshore company with the suitable corporate structure. This requires minimal client involvement.
4)After registration is complete, the consulting company will provide the client a complete company kit including i) original Certificate of Incorporation ii) a bound copy of government-approved Memorandum & Articles iii) original share certificates iv) an extract from the Public Register illustrating company details available for public viewing (if applicable) and v) an original government receipt as evidence of payment of annual offshore company registration license fees.
5)For invoicing purposes, the consulting company will provide the client with a reputable international business address, telephone and fax line.
It is important to note that exact offshore company set up procedures and the duration vary according to the jurisdiction. It is important to choose a respectable jurisdiction that is free of any negative stigma of illegal activities, such as money laundering and tax evasion.
Examples of popular jurisdictions in which to set up an offshore company smoothly and relatively quickly are Singapore and Hong Kong. These two ideal offshore jurisdictions boast excellent international reputations to customers, suppliers, investors, banks and other organisations. For example, Singapore and Hong Kong have strict client confidentiality and bank secrecy laws and are not listed on OECD black or grey lists. This is important, as they are not given any tax haven stigma. Singapore and Hong Kong also have investor-friendly business environments and are economically and politically stable.
Regardless of jurisdiction, after offshore company incorporation, it is advisable to consider the additional ways your corporate services firm can assist your offshore company to prosper. Services may include financial services, such as assisting corporate bank account opening, business website design and Search Engine Optimisation (SEO), marketing services and human resource services, such as staff recruitment and obtaining employment visas.
Setting up an offshore company under the guidance of a corporate services firm will help to ensure smooth company registration and also provides the strategic advice for successful business operation.
Offshore bank accounts
Setting up an offshore company is simple with the help of a corporate services company. The typical set up procedures are as follows:
1)The hired consulting company collects the required due diligence from the client.
2)The consulting company provides the client with a detailed project plan, which includes steps to incorporate the potential offshore company.
3)The consulting company proceeds to register the offshore company with the suitable corporate structure. This requires minimal client involvement.
4)After registration is complete, the consulting company will provide the client a complete company kit including i) original Certificate of Incorporation ii) a bound copy of government-approved Memorandum & Articles iii) original share certificates iv) an extract from the Public Register illustrating company details available for public viewing (if applicable) and v) an original government receipt as evidence of payment of annual offshore company registration license fees.
5)For invoicing purposes, the consulting company will provide the client with a reputable international business address, telephone and fax line.
It is important to note that exact offshore company set up procedures and the duration vary according to the jurisdiction. It is important to choose a respectable jurisdiction that is free of any negative stigma of illegal activities, such as money laundering and tax evasion.
Examples of popular jurisdictions in which to set up an offshore company smoothly and relatively quickly are Singapore and Hong Kong. These two ideal offshore jurisdictions boast excellent international reputations to customers, suppliers, investors, banks and other organisations. For example, Singapore and Hong Kong have strict client confidentiality and bank secrecy laws and are not listed on OECD black or grey lists. This is important, as they are not given any tax haven stigma. Singapore and Hong Kong also have investor-friendly business environments and are economically and politically stable.
Regardless of jurisdiction, after offshore company incorporation, it is advisable to consider the additional ways your corporate services firm can assist your offshore company to prosper. Services may include financial services, such as assisting corporate bank account opening, business website design and Search Engine Optimisation (SEO), marketing services and human resource services, such as staff recruitment and obtaining employment visas.
Setting up an offshore company under the guidance of a corporate services firm will help to ensure smooth company registration and also provides the strategic advice for successful business operation.
Offshore bank accounts
Is Offshore Business The Right Business For You?
Offshore business has attracted significant attention recently including the highly publicized case between a bank in Switzerland and the US government who actively pursue individuals, or companies, suspected of tax evasion activities. The effect has been a snowball of TIEAs, better known as Tax Information Exchange Agreements, especially between the jurisdictions often labeled with the tax haven image and the larger nations who suspect tax evasion.
So how can offshore business still be useful in the face of such risks?
The important thing to note is that information being withheld by the account holders to evade tax obligations, would be considered illegal. However, it is still possible to conduct offshore business in tax friendly jurisdictions, in compliance with the law. The key is to identify and choose the best jurisdiction for your business type and structure your company accordingly. This is obviously more tedious than most entrepreneurs initially imagine, and for that reason the use of consultancy firms and offshore specialists is both a logical and common practice.
Still, offshore may not be right for everybody.
Who conducts offshore business?
Offshore business is popular with the following professionals: successful, independent contractors, consultants especially in IT and global financial services- and traders -especially global commodity traders-.
The following types of business can also make use of an offshore company: import/export companies, international trading companies, asset holding companies, property investment/intellectual property holdings.
Businesses that are located in unstable jurisdictions or economies can benefit from an offshore company in a secure jurisdiction or economy. Similarly, expatriates who would like to protect their assets from home country taxes and inheritance laws can do so through offshore business.
If that is you
What advantages does offshore business provide?
Offshore business is a way to potentially achieve the following: (i) minimize international taxation legally (e.g. Singapore has legally low tax rates), (ii) provide a reputable image for business (e.g. if the original country of business is untrustworthy or unpopular in a specific industry), (iii) protect global assets (e.g. if in original country asset protection laws are inadequate or badly implemented), (iv) facility company incorporation procedures (e.g. offshore business set up procedures are often simpler, faster and cheaper for entrepreneurs than their home jurisdiction),(v) provide confidentiality (e.g. some offshore jurisdictions do not publish shareholder/owner information to the public), (vi) fee exemption (e.g. business license fees, stamp duties and various taxes), (vii) no exchange controls (often the case in offshore jurisdictions), (viii) no accounting/audit requirements (some jurisdictions do not require financial statements or annual audits).
What are the risks to be aware of?
If you decide these advantages are relevant to you and you choose to incorporate a business offshore, be aware of the following: (i) OECD pressure on certain offshore jurisdictions many popular jurisdiction are bigger targets of OECD pressures for TIEA (ii) certain offshore jurisdictions have a negative reputation that affects business image (iii) concealing information about offshore investments is illegal in most countries.
What exactly can an offshore business do?
Offshore businesses can do a variety of things dependent on the offshore jurisdiction it is incorporated under. A few examples to note are:
(i) Have limited liability status, thereby limiting director and shareholder liability to the amount of money invested i.e. share capitalization, and separating the company as a legal entity from its owners.
(ii) Conduct business in any country, just like a local company. Note: like a local company it is also subject to each of the rules and regulation of the jurisdiction in which business is conducted.
(iii) Buy, sell, hold securities, certificates of deposit, open savings and other bank accounts, transact in multiple currencies, stocks, bonds, mutual funds, other banking instruments, real estate and valuables.
(iv) Open a bank account in an international or local bank and borrow or lend money.
(v) Hold international meetings of directors and shareholders via telephone, fax or any other electronic or virtual means of communication.
(vi) Trade its own shares, hold treasury shares, and conduct mergers, acquisitions and/or joint ventures.
(vii) Transfer assets to a trust or foundation.
(viii) Trade licenses and royalty rights without paying taxes on royalty income.
Many businesses miss out on legally available tax efficiencies that can be achieved through incorporating an offshore business. It is important for any entrepreneur or director to properly research the practices that exist and that are legally viable, in order to conduct business in the smartest way possible. If offshore business sounds like a relevant practice for your business, consider your options and seek advice and approval from a well-informed reliable source, in order to take full advantage of what the globalized business world provides, and avoid becoming another news headline for tax evasion.
Offshore Tax Havens samples
So how can offshore business still be useful in the face of such risks?
The important thing to note is that information being withheld by the account holders to evade tax obligations, would be considered illegal. However, it is still possible to conduct offshore business in tax friendly jurisdictions, in compliance with the law. The key is to identify and choose the best jurisdiction for your business type and structure your company accordingly. This is obviously more tedious than most entrepreneurs initially imagine, and for that reason the use of consultancy firms and offshore specialists is both a logical and common practice.
Still, offshore may not be right for everybody.
Who conducts offshore business?
Offshore business is popular with the following professionals: successful, independent contractors, consultants especially in IT and global financial services- and traders -especially global commodity traders-.
The following types of business can also make use of an offshore company: import/export companies, international trading companies, asset holding companies, property investment/intellectual property holdings.
Businesses that are located in unstable jurisdictions or economies can benefit from an offshore company in a secure jurisdiction or economy. Similarly, expatriates who would like to protect their assets from home country taxes and inheritance laws can do so through offshore business.
If that is you
What advantages does offshore business provide?
Offshore business is a way to potentially achieve the following: (i) minimize international taxation legally (e.g. Singapore has legally low tax rates), (ii) provide a reputable image for business (e.g. if the original country of business is untrustworthy or unpopular in a specific industry), (iii) protect global assets (e.g. if in original country asset protection laws are inadequate or badly implemented), (iv) facility company incorporation procedures (e.g. offshore business set up procedures are often simpler, faster and cheaper for entrepreneurs than their home jurisdiction),(v) provide confidentiality (e.g. some offshore jurisdictions do not publish shareholder/owner information to the public), (vi) fee exemption (e.g. business license fees, stamp duties and various taxes), (vii) no exchange controls (often the case in offshore jurisdictions), (viii) no accounting/audit requirements (some jurisdictions do not require financial statements or annual audits).
What are the risks to be aware of?
If you decide these advantages are relevant to you and you choose to incorporate a business offshore, be aware of the following: (i) OECD pressure on certain offshore jurisdictions many popular jurisdiction are bigger targets of OECD pressures for TIEA (ii) certain offshore jurisdictions have a negative reputation that affects business image (iii) concealing information about offshore investments is illegal in most countries.
What exactly can an offshore business do?
Offshore businesses can do a variety of things dependent on the offshore jurisdiction it is incorporated under. A few examples to note are:
(i) Have limited liability status, thereby limiting director and shareholder liability to the amount of money invested i.e. share capitalization, and separating the company as a legal entity from its owners.
(ii) Conduct business in any country, just like a local company. Note: like a local company it is also subject to each of the rules and regulation of the jurisdiction in which business is conducted.
(iii) Buy, sell, hold securities, certificates of deposit, open savings and other bank accounts, transact in multiple currencies, stocks, bonds, mutual funds, other banking instruments, real estate and valuables.
(iv) Open a bank account in an international or local bank and borrow or lend money.
(v) Hold international meetings of directors and shareholders via telephone, fax or any other electronic or virtual means of communication.
(vi) Trade its own shares, hold treasury shares, and conduct mergers, acquisitions and/or joint ventures.
(vii) Transfer assets to a trust or foundation.
(viii) Trade licenses and royalty rights without paying taxes on royalty income.
Many businesses miss out on legally available tax efficiencies that can be achieved through incorporating an offshore business. It is important for any entrepreneur or director to properly research the practices that exist and that are legally viable, in order to conduct business in the smartest way possible. If offshore business sounds like a relevant practice for your business, consider your options and seek advice and approval from a well-informed reliable source, in order to take full advantage of what the globalized business world provides, and avoid becoming another news headline for tax evasion.
Offshore Tax Havens samples
Monday, 28 June 2010
Practical Business Forms of using an Offshore Corporation
Panama, BVI or Belize corporations are useful for several main purposes:
1. Investment Holding Corporation
Both corporations and individuals make substantial use of offshore companies as vehicles to protect and hold investment portfolios. Such portfolios may consist of stocks, bonds, cash, and other investments. Cash assets held by offshore companies may earn deposit interests free of tax.
Personal offshore holding companies are often used by high net worth individuals to hold investments made in different markets and countries. Personal holding companies also provide the confidentiality required by the sophisticated investors; while at the same time, saving in professional and other fees associated with other structures. In such a structure, tax is not payable on income generated from the investment holding company’s assets, thereby increasing the amount available for other purposes.
2. Finance Corporation
Offshore finance companies can be established to fulfill a personal or corporate group treasury management function. Interest payments from group companies to the offshore finance subsidiary may be subject to withholding taxes usually lower than corporate taxes levied otherwise. On the other hand, the interest paid would be a deductible cost, for taxation purposes, and so consolidating interest payments in the offshore finance company may provide a tax saving benefit.
Offshore finance companies are often utilized as part of structures for acquiring foreign entities, real estate and other investment related projects.
Other benefits of such a company to the multinational entrepreneur are:
Protection of capital funds introduced from abroad to foster a self-owned project.
Tax relief on the cost of borrowing the funds.
Freedom to return interest on funds lent to the tax haven, so they can be reinvested at the best tax-free advantage.
3. Real Estate Holding Corporation
The ownership of overseas real estate and land by a Panama company can often create many tax advantages. Additionally, using a Panama Private Foundation or another offshore company to own the shares in the offshore company can give rise to additional tax advantages in the client’s country of residence and simplifies procedures in the event of the client’s death.
The main benefits are:
Avoidance in most cases of local inheritance taxes on the property in the event of death of the beneficial owner.
Avoidance in most cases of local succession laws which can, in certain countries, stipulate to whom the property must pass.
Elimination in most cases of local transfer and capital gains taxes upon resale of the property.
Simplification of procedure upon resale of the property through the sale of the real estate holding company to the buyer saving both time and costs.
Exclusion of foreign exchange controls restrictions, in certain countries, in the event of the beneficial owner taking up residence in the property.
Ease of transfer to heirs in the event of the beneficial owner’s death.
Confidentiality of ownership.
4. Trading Corporation
Offshore trading companies are a proven efficient vehicle to expatriate capital and eliminate exchange controls restrictions through over-invoicing or under invoicing export/import transactions. If a Panama trading company were to procure products from one country, and then sell them to another country, the profits arising our of the transaction may be accumulated in the offshore company, free from taxation in the offshore centre.
Another common use of a offshore trading company is for bulk purchasing. Such a structure is typically established by a group of associated or unrelated companies to benefit from economics of scale and reduced administrative costs, plus significant tax savings. Significant benefits achieved by this arrangement, include receipt of bulk buying discounts and accumulation in a tax-free area of the net mark-up on resales to the manufacturing units.
5. Venture Capital Corporation
Offshore companies are regularly employed to raise venture capital through equity or debt issues in capital markets. Many corporations have sough to mitigate risk by accessing markets through offshore companies while at the same time reducing certain taxes. This technique is a refinement of the Panama offshore investment holding company. With prudent management, it can prove very profitable by itself, apart from accumulating tax-free profits.
7. Plant Rental Corporation
If a company in a service industry operates affiliated companies in various countries, the formation and financing of an offshore company to acquire capital equipment used in its operations could prove beneficial. The equipment is rented to the affiliate at market rates, and net income is left to accumulate in the offshore company. Alternatively, it can be attractive for a company in a high tax area to purchase the capital equipment, claim the usual allowances, and lease the equipment to the offshore company at commercial rates. Hence, profits are generated, which are not liable to tax assessment, while rental payments in most cases are tax deducible in their countries of origin.
8. Personal Services Corporation
Many individuals engaged in the provision of professional services in the construction, engineering, aviation, finance, computer, film, and entertainment industries can achieve considerable tax saving benefits through the establishment of a offshore personal service company.
The offshore company can contract to supply the services of the individual outside the country in which he/she is normally resident and the fees earned can accumulate offshore, free from taxation in the offshore centre. Payments to the individual can then be structured in such a way to minimize income tax.
9. Employment Corporation
Many companies utilize offshore companies for the employment of staff working on overseas assignments. This helps to reduce the costs associated with payroll and travel expense administration, and may provide a tax and social security saving benefit for the employees.
While not providing any specific legal or tax counsel, nevertheless for some individuals or companies, Panama companies may offer specific tax advantages over other jurisdictions. Any potential client seeking legal or tax advice should consult with their individual legal or tax advisor.
Offshore Pro Group
1. Investment Holding Corporation
Both corporations and individuals make substantial use of offshore companies as vehicles to protect and hold investment portfolios. Such portfolios may consist of stocks, bonds, cash, and other investments. Cash assets held by offshore companies may earn deposit interests free of tax.
Personal offshore holding companies are often used by high net worth individuals to hold investments made in different markets and countries. Personal holding companies also provide the confidentiality required by the sophisticated investors; while at the same time, saving in professional and other fees associated with other structures. In such a structure, tax is not payable on income generated from the investment holding company’s assets, thereby increasing the amount available for other purposes.
2. Finance Corporation
Offshore finance companies can be established to fulfill a personal or corporate group treasury management function. Interest payments from group companies to the offshore finance subsidiary may be subject to withholding taxes usually lower than corporate taxes levied otherwise. On the other hand, the interest paid would be a deductible cost, for taxation purposes, and so consolidating interest payments in the offshore finance company may provide a tax saving benefit.
Offshore finance companies are often utilized as part of structures for acquiring foreign entities, real estate and other investment related projects.
Other benefits of such a company to the multinational entrepreneur are:
Protection of capital funds introduced from abroad to foster a self-owned project.
Tax relief on the cost of borrowing the funds.
Freedom to return interest on funds lent to the tax haven, so they can be reinvested at the best tax-free advantage.
3. Real Estate Holding Corporation
The ownership of overseas real estate and land by a Panama company can often create many tax advantages. Additionally, using a Panama Private Foundation or another offshore company to own the shares in the offshore company can give rise to additional tax advantages in the client’s country of residence and simplifies procedures in the event of the client’s death.
The main benefits are:
Avoidance in most cases of local inheritance taxes on the property in the event of death of the beneficial owner.
Avoidance in most cases of local succession laws which can, in certain countries, stipulate to whom the property must pass.
Elimination in most cases of local transfer and capital gains taxes upon resale of the property.
Simplification of procedure upon resale of the property through the sale of the real estate holding company to the buyer saving both time and costs.
Exclusion of foreign exchange controls restrictions, in certain countries, in the event of the beneficial owner taking up residence in the property.
Ease of transfer to heirs in the event of the beneficial owner’s death.
Confidentiality of ownership.
4. Trading Corporation
Offshore trading companies are a proven efficient vehicle to expatriate capital and eliminate exchange controls restrictions through over-invoicing or under invoicing export/import transactions. If a Panama trading company were to procure products from one country, and then sell them to another country, the profits arising our of the transaction may be accumulated in the offshore company, free from taxation in the offshore centre.
Another common use of a offshore trading company is for bulk purchasing. Such a structure is typically established by a group of associated or unrelated companies to benefit from economics of scale and reduced administrative costs, plus significant tax savings. Significant benefits achieved by this arrangement, include receipt of bulk buying discounts and accumulation in a tax-free area of the net mark-up on resales to the manufacturing units.
5. Venture Capital Corporation
Offshore companies are regularly employed to raise venture capital through equity or debt issues in capital markets. Many corporations have sough to mitigate risk by accessing markets through offshore companies while at the same time reducing certain taxes. This technique is a refinement of the Panama offshore investment holding company. With prudent management, it can prove very profitable by itself, apart from accumulating tax-free profits.
7. Plant Rental Corporation
If a company in a service industry operates affiliated companies in various countries, the formation and financing of an offshore company to acquire capital equipment used in its operations could prove beneficial. The equipment is rented to the affiliate at market rates, and net income is left to accumulate in the offshore company. Alternatively, it can be attractive for a company in a high tax area to purchase the capital equipment, claim the usual allowances, and lease the equipment to the offshore company at commercial rates. Hence, profits are generated, which are not liable to tax assessment, while rental payments in most cases are tax deducible in their countries of origin.
8. Personal Services Corporation
Many individuals engaged in the provision of professional services in the construction, engineering, aviation, finance, computer, film, and entertainment industries can achieve considerable tax saving benefits through the establishment of a offshore personal service company.
The offshore company can contract to supply the services of the individual outside the country in which he/she is normally resident and the fees earned can accumulate offshore, free from taxation in the offshore centre. Payments to the individual can then be structured in such a way to minimize income tax.
9. Employment Corporation
Many companies utilize offshore companies for the employment of staff working on overseas assignments. This helps to reduce the costs associated with payroll and travel expense administration, and may provide a tax and social security saving benefit for the employees.
While not providing any specific legal or tax counsel, nevertheless for some individuals or companies, Panama companies may offer specific tax advantages over other jurisdictions. Any potential client seeking legal or tax advice should consult with their individual legal or tax advisor.
Offshore Pro Group
Panama Foundation Tax Information
Panama Foundation Tax Information
Panama is a 100% "tax haven". Panama Foundations offer the following tax advantages:
No tax reporting requirements.
No income tax.
No capital gains tax.
No interest income tax.
No sales tax.
No tax to beneficiaries.
No beneficiary transfer tax.
No capital tax.
No property tax (for non-Panamanian property).
No estate tax.
No gift tax.
No inheritance tax.
No stamp tax.
No succession tax.
No inventory tax
Flat Annual Panama Corporate Franchise Tax
The only tax paid by Panama Corporations (or Panama Foundations) is the flat annual Panama corporate franchise tax of US$300.
According to the Law, the Panama corporate franchise tax payment deadlines are as follows:
Incorporation Date ..................Tax Payment Deadline
From 1 of January to 30 of June 30 : July 15
From 1 of July to 31 of December 31 : January 15
Late Payment Penalty:
If the flat annual Panama corporate franchise tax ("taza unica") is not paid on or before the due dates mentioned above, the entity be charged a late penalty of US$50.00 per year that the tax is not paid.
Second Late Payment Penalty:
If the flat annual Panama corporate franchise tax ("taza unica") is not paid after 1 "deadline" period, the entity will be charged a second late penalty of US$300 for every additional "deadline" period missed thereafter, a US$300 late fee will be incurred.
The above applies to all "entities" (corporations, foundations, or trusts) registered at the public registry of Panama.
Offshore Pro Group
Panama is a 100% "tax haven". Panama Foundations offer the following tax advantages:
No tax reporting requirements.
No income tax.
No capital gains tax.
No interest income tax.
No sales tax.
No tax to beneficiaries.
No beneficiary transfer tax.
No capital tax.
No property tax (for non-Panamanian property).
No estate tax.
No gift tax.
No inheritance tax.
No stamp tax.
No succession tax.
No inventory tax
Flat Annual Panama Corporate Franchise Tax
The only tax paid by Panama Corporations (or Panama Foundations) is the flat annual Panama corporate franchise tax of US$300.
According to the Law, the Panama corporate franchise tax payment deadlines are as follows:
Incorporation Date ..................Tax Payment Deadline
From 1 of January to 30 of June 30 : July 15
From 1 of July to 31 of December 31 : January 15
Late Payment Penalty:
If the flat annual Panama corporate franchise tax ("taza unica") is not paid on or before the due dates mentioned above, the entity be charged a late penalty of US$50.00 per year that the tax is not paid.
Second Late Payment Penalty:
If the flat annual Panama corporate franchise tax ("taza unica") is not paid after 1 "deadline" period, the entity will be charged a second late penalty of US$300 for every additional "deadline" period missed thereafter, a US$300 late fee will be incurred.
The above applies to all "entities" (corporations, foundations, or trusts) registered at the public registry of Panama.
Offshore Pro Group
Friday, 25 June 2010
JERSEY TAX HAVEN
Stability and security will be the watchwords in offshore financial centres in the months ahead. Offshore banking has been and will remain at the cornerstone of the offshore finance industry. In the months ahead, the stability provided by the leading jurisdictions in the offshore environment will be the most important feature.
International investors share the same concerns as resident savers who have watched the dramatic events that have hit the global banking community unfold across the world. Investors generally have had their confidence deeply shaken by events in New York, London and other leading markets and going forward there will no doubt be a demand from investors for greater economic stability and security.
An international financial centre such as Jersey provides a relative oasis of calm in these turbulent times. The Island has a huge pool of liquidity available from deposits placed locally. More than £200bn has been attracted to Jersey over the years. These funds do not lie idle in the bank vaults of Island offices, but are circulating amongst the onshore financial centres, particularly London.
As stability becomes an essential commodity for international investors the Island’s long- held reputation as a safe, secure location in which to shelter assets from global turmoil is gaining special significance.
Banks in Jersey are subsidiaries or branches of world-wide financial institutions, but tend to be far more capitalised in Jersey than is the industry norm. This is because the Island is a centre for deposits, giving further comfort to investors.
Alongside the need to demonstrate stability, offshore jurisdictions are also competing more aggressively than ever for international investment business. Many new opportunities are arising from the emerging markets in the Far East, particularly in China and India.
Jersey Tax Haven - Financial future
Jersey recently commissioned a long-term study into the future of financial services, undertaken for the Island by the London Business School. One of its main conclusions was that greater resources would need to be devoted to the markets in China, India and Eastern Europe. These areas were identified as markets where, alongside London, most new business would be acquired in the future. The events of the last few months have not affected those trends.
Jersey professionals have been encouraged by the increasing numbers of legal and finance professionals based in the emerging markets turning to Jersey in support of their investment planning and asset structuring. In China, for example, there are many instances where institutional investors have been able to tap into the investment opportunities available in the European markets through the formation of Jersey companies which are then listed on European exchanges. A delegation from Jersey Finance has already made two successful visits to China this year and further visits are planned.
Also it is clear from a recent visit to India by a delegation from Jersey that the Island is an attractive location for Indian holding companies looking to diversify business interests into the UK and Europe. Indian nationals are now able to invest up to $200k per annum outside of India. This has opened up the opportunity for a range of private wealth management work.
Finance centres have also needed to embrace the requirements of international bodies such as the OECD which has been engaged in its ‘harmful tax competition’ initiative, the objective of which is to achieve a global level playing field based on high standards of transparency and effective exchange of information in tax matters. In response to these international moves, Jersey has, for example, been committed to the principles of exchange of information on request and transparency since as far back as 2002.
However, this international pressure on jurisdictions to provide greater information on their client’s financial affairs has led to widening concern amongst high net worth clients that the privacy of their affairs may no longer be guaranteed. This has, in turn, led to considerable debate amongst those who advise wealthy clients about the threats to confidentiality posed by the demands for greater transparency from tax authorities.
But it is possible for jurisdictions to adhere to international standards and to co-operate with international moves to combat fiscal crime, whilst maintaining a client’s right to privacy and confidentiality.
It is worth considering the differences in the rules that exist between jurisdictions. There are some financial centres that rely on banking secrecy laws to uphold the privacy of financial affairs.
However, such centres are attracting an increasing level of negative publicity regarding assets linked to illegal activity which hide behind a cloak of secrecy. As a result, there is mounting pressure for them to abandon the secrecy barrier.
There are other centres which do not rely on secrecy laws, including many jurisdictions which are familiar to British expatriates. In this respect, Jersey is not a secretive jurisdiction, as it protects the rights to privacy and confidentiality of financial information relating to law-abiding citizens without the need for banking secrecy laws.
Jersey Tax Haven - Client confidentiality
Jersey embraces the concept of transparency in its regulatory practices and it is acknowledged for doing so by international bodies and law makers. This does not mean, however, that private and confidential data about clients held solely by institutions in Jersey is accessible and will be disclosed. On the contrary, Jersey has always upheld the principle of confidentiality of client affairs.
Some may question whether the Island can continue to do this when the HMRC has been seen to increase its powers to obtain information about offshore bank accounts, most notably following the Court ruling won by HMRC in 2007. This case related to information held about clients in the UK with offshore bank accounts.
The industry believes that HMRC would not generally be able to compel information to be disclosed by Jersey subsidiaries and/or branches of UK institutions, providing always that the relevant information was not held in the UK. Although the position has not been tested in the Island, this is the view of Jersey legal experts familiar with an understanding of Irish and English civil case law.
Jersey Tax Haven - Tax transparency
In the fight against money laundering and fiscal crime and to meet OECD principles of transparency a new model agreement has been created, known as the Tax Information Exchange Agreement (TIEA).
Many financial jurisdictions are signing agreements with individual countries and Jersey is amongst them. To date, the Island authorities have negotiated agreements with the USA, Netherlands and Germany. It is important to recognise that tax authorities can only use TIEAs in specific cases where the requesting authority is able to demonstrate that there is a need to obtain information, and that all other means to discover the information they require has been exhausted in their own territory.
It is possible in Jersey’s view to support the concept of greater transparency in financial affairs, whilst at the same time adhering to original and long held principles that the financial affairs of legitimate, law-abiding clients are sacrosanct.
Alongside the need to demonstrate stability and the challenging issues of transparency and information exchange, financial centres will continue to compete on their ability to innovate and enhance their commercial environment so that they are more attractive for international investors.
Jersey Tax Haven - Foundation formulation
Already this year in Jersey the Island has introduced enhancements to its company laws, launched rules that enable promoters to set up unregulated funds which complement the hugely successful regulated funds regime, and finalised new legislation which will enable foundations to be formed in the Island for the first time.
Foundations, which will be available in Jersey alongside existing vehicles such as companies, trusts and limited partnerships, may be of particular interest to international investors and their advisers in respect of long-term financial planning.
Unlike a trust a foundation is a distinct legal entity similar to a company, although it has no shareholders. The powers of the foundation will be exercised by a council, one of whose members must be registered under the Financial Services (Jersey) Law 1998 to conduct financial services business of this type. The foundation’s charter will need to be lodged with the Registrar’s department of the Jersey Financial Services Commission, setting out the name and broad objectives of the foundation.
We anticipate that the foundation vehicle will appeal to clients based in civil law territories where they are less familiar with the trust concept. It will also be an effective financial planning vehicle for those clients who want to maintain more personal control of the assets. It has some of the attractions of a trust vehicle and some of the benefits of a company structure, including separate legal status. This should enhance its appeal to private clients and their advisers who may not previously have considered Jersey as a location to shelter assets.
Whilst the need for a stable and secure environment will be paramount, investors also need choice. The flexibility of regulation, the widening scope of legislation and the growing specialist skills prevalent in jurisdictions such as Jersey help to provide the choice that investors seek. Diversity and specialization are also essential ingredients in successful international finance centres.
Offshore Pro Group
International investors share the same concerns as resident savers who have watched the dramatic events that have hit the global banking community unfold across the world. Investors generally have had their confidence deeply shaken by events in New York, London and other leading markets and going forward there will no doubt be a demand from investors for greater economic stability and security.
An international financial centre such as Jersey provides a relative oasis of calm in these turbulent times. The Island has a huge pool of liquidity available from deposits placed locally. More than £200bn has been attracted to Jersey over the years. These funds do not lie idle in the bank vaults of Island offices, but are circulating amongst the onshore financial centres, particularly London.
As stability becomes an essential commodity for international investors the Island’s long- held reputation as a safe, secure location in which to shelter assets from global turmoil is gaining special significance.
Banks in Jersey are subsidiaries or branches of world-wide financial institutions, but tend to be far more capitalised in Jersey than is the industry norm. This is because the Island is a centre for deposits, giving further comfort to investors.
Alongside the need to demonstrate stability, offshore jurisdictions are also competing more aggressively than ever for international investment business. Many new opportunities are arising from the emerging markets in the Far East, particularly in China and India.
Jersey Tax Haven - Financial future
Jersey recently commissioned a long-term study into the future of financial services, undertaken for the Island by the London Business School. One of its main conclusions was that greater resources would need to be devoted to the markets in China, India and Eastern Europe. These areas were identified as markets where, alongside London, most new business would be acquired in the future. The events of the last few months have not affected those trends.
Jersey professionals have been encouraged by the increasing numbers of legal and finance professionals based in the emerging markets turning to Jersey in support of their investment planning and asset structuring. In China, for example, there are many instances where institutional investors have been able to tap into the investment opportunities available in the European markets through the formation of Jersey companies which are then listed on European exchanges. A delegation from Jersey Finance has already made two successful visits to China this year and further visits are planned.
Also it is clear from a recent visit to India by a delegation from Jersey that the Island is an attractive location for Indian holding companies looking to diversify business interests into the UK and Europe. Indian nationals are now able to invest up to $200k per annum outside of India. This has opened up the opportunity for a range of private wealth management work.
Finance centres have also needed to embrace the requirements of international bodies such as the OECD which has been engaged in its ‘harmful tax competition’ initiative, the objective of which is to achieve a global level playing field based on high standards of transparency and effective exchange of information in tax matters. In response to these international moves, Jersey has, for example, been committed to the principles of exchange of information on request and transparency since as far back as 2002.
However, this international pressure on jurisdictions to provide greater information on their client’s financial affairs has led to widening concern amongst high net worth clients that the privacy of their affairs may no longer be guaranteed. This has, in turn, led to considerable debate amongst those who advise wealthy clients about the threats to confidentiality posed by the demands for greater transparency from tax authorities.
But it is possible for jurisdictions to adhere to international standards and to co-operate with international moves to combat fiscal crime, whilst maintaining a client’s right to privacy and confidentiality.
It is worth considering the differences in the rules that exist between jurisdictions. There are some financial centres that rely on banking secrecy laws to uphold the privacy of financial affairs.
However, such centres are attracting an increasing level of negative publicity regarding assets linked to illegal activity which hide behind a cloak of secrecy. As a result, there is mounting pressure for them to abandon the secrecy barrier.
There are other centres which do not rely on secrecy laws, including many jurisdictions which are familiar to British expatriates. In this respect, Jersey is not a secretive jurisdiction, as it protects the rights to privacy and confidentiality of financial information relating to law-abiding citizens without the need for banking secrecy laws.
Jersey Tax Haven - Client confidentiality
Jersey embraces the concept of transparency in its regulatory practices and it is acknowledged for doing so by international bodies and law makers. This does not mean, however, that private and confidential data about clients held solely by institutions in Jersey is accessible and will be disclosed. On the contrary, Jersey has always upheld the principle of confidentiality of client affairs.
Some may question whether the Island can continue to do this when the HMRC has been seen to increase its powers to obtain information about offshore bank accounts, most notably following the Court ruling won by HMRC in 2007. This case related to information held about clients in the UK with offshore bank accounts.
The industry believes that HMRC would not generally be able to compel information to be disclosed by Jersey subsidiaries and/or branches of UK institutions, providing always that the relevant information was not held in the UK. Although the position has not been tested in the Island, this is the view of Jersey legal experts familiar with an understanding of Irish and English civil case law.
Jersey Tax Haven - Tax transparency
In the fight against money laundering and fiscal crime and to meet OECD principles of transparency a new model agreement has been created, known as the Tax Information Exchange Agreement (TIEA).
Many financial jurisdictions are signing agreements with individual countries and Jersey is amongst them. To date, the Island authorities have negotiated agreements with the USA, Netherlands and Germany. It is important to recognise that tax authorities can only use TIEAs in specific cases where the requesting authority is able to demonstrate that there is a need to obtain information, and that all other means to discover the information they require has been exhausted in their own territory.
It is possible in Jersey’s view to support the concept of greater transparency in financial affairs, whilst at the same time adhering to original and long held principles that the financial affairs of legitimate, law-abiding clients are sacrosanct.
Alongside the need to demonstrate stability and the challenging issues of transparency and information exchange, financial centres will continue to compete on their ability to innovate and enhance their commercial environment so that they are more attractive for international investors.
Jersey Tax Haven - Foundation formulation
Already this year in Jersey the Island has introduced enhancements to its company laws, launched rules that enable promoters to set up unregulated funds which complement the hugely successful regulated funds regime, and finalised new legislation which will enable foundations to be formed in the Island for the first time.
Foundations, which will be available in Jersey alongside existing vehicles such as companies, trusts and limited partnerships, may be of particular interest to international investors and their advisers in respect of long-term financial planning.
Unlike a trust a foundation is a distinct legal entity similar to a company, although it has no shareholders. The powers of the foundation will be exercised by a council, one of whose members must be registered under the Financial Services (Jersey) Law 1998 to conduct financial services business of this type. The foundation’s charter will need to be lodged with the Registrar’s department of the Jersey Financial Services Commission, setting out the name and broad objectives of the foundation.
We anticipate that the foundation vehicle will appeal to clients based in civil law territories where they are less familiar with the trust concept. It will also be an effective financial planning vehicle for those clients who want to maintain more personal control of the assets. It has some of the attractions of a trust vehicle and some of the benefits of a company structure, including separate legal status. This should enhance its appeal to private clients and their advisers who may not previously have considered Jersey as a location to shelter assets.
Whilst the need for a stable and secure environment will be paramount, investors also need choice. The flexibility of regulation, the widening scope of legislation and the growing specialist skills prevalent in jurisdictions such as Jersey help to provide the choice that investors seek. Diversity and specialization are also essential ingredients in successful international finance centres.
Offshore Pro Group
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