WHAT IS THE LEGAL FRAMEWORK OF AN OFFSHORE COMPANY?

The ongoing primary attraction of incorporation is to limit the liability of investors. Limited liability legislation was first introduced in the nineteenth century to distinguish the liability of a corporation as a legal entity from the liability of its owners, thus limiting the losses of shareholders to the amount of the share capital which the owners had paid or undertaken to pay. Because a company is a legal entity distinct from its shareholders and directors, profits received by the company will generally be taxed at the rate to which the company is subject in its country of residence. Thus a resident of a high tax country may set up a company which is subject to a low or zero rate of tax.

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