HOW TO INCORPORATE AN OFFSHORE СOMPANY?

Once a jurisdiction has been chosen, incorporation procedure starts with the nominating of a suitable company name.

The name should not be similar or identical to an existing name. The Registrar will refuse a name if it is already held by an existing company. Certain words such as “bank”, “insurance” and “trust” may only be used if the company is specifically licensed to engage in the activity concerned. In some jurisdictions there are other restrictions, for example the use of the word “international” in the Isle of Man is permitted only for companies with a paid-in capital not less than GBP 100.000. Normally it is the responsibility of the incorporator to choose a name that does not cause confusion.

Authorized share capital can be as high as the client chooses, however, in most jurisdictions annual flat rate taxes are levied in respect of the company’s total share capital. In this case we recommend that a company be incorporated with the highest authorized share capital to qualify for the minimum registration and annual maintenance fees.

There are two main types of share: namely registered and bearer. In the case of registered shares the shareholder’s name appears on the certificate. With bearer shares the owner holds a certificate, which states that “the bearer” owns the shares in question. Owners of bearer shares enjoy greater confidentiality but less security, because if the bearer share certificate is lost it is extremely difficult to prove ownership of the company. In many jurisdictions the details of registered shareholders are not publicly disclosed. Therefore for greater security and confidentiality we recommend that registered shares be issued and that nominee shareholders be appointed.

Registered office and agent, company secretary and other domiciliary requirements vary in different jurisdictions. A registered office need not be a place where actual business is conducted, but it is a place at which all official notices may be received. Most offshore jurisdictions’ legislation requires that the office must be run from premises in the country of incorporation. There is an additional requirement in a number of jurisdictions to employ a registered agent to act as the company’s official representative in the country of incorporation. In some offshore jurisdictions it is a legal requirement to appoint a company secretary who is responsible for making sure that the company is in good standing and all the necessary returns are made to the Registrar and Government.

The Board of Directors of the company in some jurisdictions may be formed with a minimum of one, two or even three directors. To prevent a situation whereby the company is deemed to be resident in a high tax country where the directors reside, we strongly recommend using professional nominee directors who reside in a fiscally neutral overseas jurisdiction. As a client is effectively giving over control of his business to a third party, it is very important that he deals only with a reputable offshore services provider.

Tags: jurisdiction existing company licensed insurance trust restrictions