"The Business Mind"

Parker Randall Malaysia

Going offshore!

Offshoring is defined as the movement of a business process done at a company in one jurisdiction to the same or another jurisdiction in another different country.  Almost always work is moved due to a lower cost of operations in the new location. Offshoring is sometimes contrasted with outsourcing or offshore outsourcing. 

Outsourcing is the movement of internal business processes to an external company. Companies subcontracting in the same jurisdiction would be outsourcing but not offshoring.  A company moving an internal business unit from one jurisdiction to another would be offshoring but not outsourcing.  A company subcontracting a business unit to a different company in another jurisdiction would be both outsourcing and offshoring.

There are a number of reasons why so many private individuals and businesses decide to incorporate offshore.  Some of the major advantages are:

• Tax saving
• Simpler business administration
• Asset protection
• Privacy & anonymity
• Global investing

Offshore for business

International trading companies, small and large are often based offshore.  Many self-employed consultants own offshore companies through which they invoice their clients.  Both are examples of businesses which are able to gain a substantial tax saving through the use of an offshore company.

For existing and prospective business owners, the advantages of an offshore company over an onshore (i.e. domestic) one are clear.  Should you require further clarification, please contact us directly and we are happy to provide you with a bird eye view screening on your existing structure and advise you accordingly whether offshoring is suitable for you and/or your company.

Offshore for privacy and asset protection

For the purpose of privacy and asset protection, the majority of individuals who incorporate offshore companies have no intention to engage in any trading whatsoever, rather they use offshore companies simply to shield private assets from third parties.

An offshore company is able to own any assets that an individual owns i.e. cash, securities, real estate and many others.  At the same time, the identity of the owner of the company itself can be protected by offshore legislation or even remain completely anonymous.  This enables the individual to retain control over his/her assets and yet make it difficult for third parties to link the assets in question to the ultimate beneficial owner.

Whatever the actual degree of privacy or anonymity offered by a particular offshore arrangement, it is a fact that assets held in the name of the individual's offshore company, in an offshore jurisdiction, are far more lawsuit-resistant than assets held by the individual in his home jurisdiction.

In fact, some claim that professional practitioners concerned about lawsuits, such as those in the medical field, make up a greater portion of the offshore population than entrepreneurs seeking tax benefits.

Offshore for investment holdings

In addition to putting assets beyond the reach of potential litigants, investments made through an offshore company, usually avoid being subjected to tax on investment income.  A cross-border variety of shares, bonds, commodities and other financial instruments can be held through a single offshore company.

Indeed, offshore companies are often utilised by individuals who are restricted by their local legislation from participating in certain overseas as investment opportunities.

Holding overseas real estate is another popular application of an offshore company.  It allows individuals to avoid inheritance tax, capital gains tax and death duties, which are applicable in certain countries.  The process of sale of properties is simplified as there is no need to transfer property title; instead, sale is achived by the transfer of shares in the offshore company thus saing time and money on legal and transfer fees to include related costs.

From the points stated above, one may also say that going offshore is not for everyone!  Whilst incorporating an offshore company is relatively inexpensive and easy, as is the subsequent administration, you have to study both your goals (e.g. Lower tax? Protection against creditors? Tax-free investment? etc.) and the size of your capital or your business turnover and/or profits to ascertain if operating an offshore company makes financial sense.

However, if the cost can be justified, it is hard to find any drawbacks of incorporating an offshore vehicle.

Our advice: Check with your onshore professionals before you go offshore!

Through our network of associates, located throughout the offshore world, Parker Randall can offer a very cost-effective yet efficient advisory service.

Our professional services are designed and tailored for the entrepreneurs and high net worth individuals to operate their business and/or personal financial matters in complete confidentiality.  The entrepreneurs will be so able to run the business in a complete privacy while residing in the jurisdiction of their choice.  We can arrange for all the necessary administration services, banking etc. all within the confinement of the laws.  Setting-up and operating fees vary with the types and complexity of the entities.  From our understanding of your goals and requirements, we will make the necessary recommendations.

Our services include the following:

• Company formations in all major offshore jurisdictions
• Registered office and registered agent services (where appropriate) in each jurisdiction
• Full nominee services (Directors / Secretary / Shareholders) to ensure total anonymity
• Bank introductions
• Correspondence facilities
• Legalisation / Apostile of company documents
• Formation of offshore trusts

We are happy to discuss each and every individual clients' requirements and are happy to tailor our services to suit different clients with different requirements.  Please refer to the Menu: "About us" for details of our offices.