There is one question that is crucial for every businessman especially the expats. This is about how to optimize taxes and to acquire more income. It is important to look at the corporate laws of particular jurisdictions that include tax incentives for offshore companies are the basis and the framework when it comes to optimizing the taxes. By definition of the law, offshore companies are prohibited from engaging in any type of economic and commercial activities on the areas that are under such jurisdictions.
The following are the general principles and steps that have to be considered to conduct an offshore company setup:
- An established structure for business purposes and this includes the modern banking industry.,
- The structure’s profitability and its economic rationality.,
- An easy to understand registration procedure for offshore companies and the minimum requirements.,
- Strict confidentiality in handling information.,
- Flexibility of corporate law norms and the lack of restrictions on the repatriation of financial assets and income.
If you have a concern on how to optimize taxes, your best solution will be an offshore company in the UAE. The offshore company structure by far remains as the most efficient and effective method used for international tax planning. There are successive steps that you must undergo to be able to set up a legal offshore company. These are the following:
- It is a must to set the strategic goals for the formation of an offshore company.
- Next step is to choose a jurisdiction which will meet the demands and needs of the business you plan to set up. It is necessary to determine the necessary components of the offshore structure such as the method of corporate management, the need of a nominal service, and also the division of management functions.
- Next is to assess and analyze the opportunities of the incoming and outgoing financial assets such as taxes, repatriation restrictions, country exchange control, and others.
- It is also necessary to come up with a preliminary calculation of the profitability and efficiency of the offshore company.
- It is also important to select the appropriate offshore bank and the account management setup whether it is remote or personal.
There are also general recommendations to entrepreneurs who are setting up an offshore company.
For the purpose of tax optimization, it is recommended to make the offshore company as one of the parties in the transaction but not as the main entity. A local company operating in the UAE that enjoys a good reputation can be made the main company. An offshore company in the UAE can in turn act as the company’s holder. This way you can give your assets maximum protection and its risks controlled. This, in turn, makes tax optimization a real opportunity to increase profits.
If you want to learn more about offshore company setup, contact HBS Dubai now.