Setting up an offshore company is much the same as the procedure for a company “onshore.” However, we strongly urge you to seek assistance from experienced advisors when first making contact with an offshore jurisdiction for the purposes of establishing an offshore business presence, as it is highly important to have the proper documentation – sometimes translated into the correct language – for the bank and other offshore authorities.
The major components of an offshore incorporation are similar, and include but are not limited to the following:
Depending on the jurisdiction, the amount of information necessary for the articles of incorporation can vary. However, generally speaking it is a document that lays out the details of our company. This would include the name of your company; its location and specific physical address; the kind of business activity expected to be performed; the times, dates, location, format and structure of board meetings; how the accounts will be kept, by whom; reporting and audit procedures; the executive organizational chart, including all relevant title names, core responsibilities, and hiring and firing procedures for board members, officers and managers; and how the shares will be distributed, accounted for, and dividends paid.
At the time of incorporation, a director or group of directors, called a Board of Directors, should be in place and able to be named in the documents. Whether or not it is necessary to have directors who are nationals of the offshore jurisdiction, and if so how many, again depend on that particular jurisdiction’s rules. At this time, there must also be a clear categorization of all relevant executive officers, such as the President, Vice President, Secretary, Treasurer, and upper management positions. Offshore jurisdictions allow for a great deal of flexibility in this area; you should check with a trusted offshore advisor to determine the minimum number of directors and officers needed, from where they need to come, and the exact structure necessary for the proper documentation.
Every shareholder in an offshore corporation is eligible to vote on company decisions and participate in company activity. This differs from “onshore” corporate structures, in which, depending on the structure, shareholders have varying degrees of responsibility. The number of shares a shareholder has determines the weight his or her say has in the decision-making process of the company’s activities.
The capital required for incorporation has several different stages, which we’ll explain in general terms below.
Authorized capital refers to the total amount of capital that will be accepted from its shareholders. There normally is a minimum necessary to reach in order to proceed with incorporation, but it’s nominal at best – usually a few dollars – and no maximum amount. In most offshore jurisdictions, the Company Registry Office or other governing authority requires a (again, usually nominal) percentage of the authorized capital as part of their incorporation fee.
Subscribed capital is that which has been pledged to be given to the company by its shareholders. The level of ownership of each shareholder changes as more shareholders reserve their shares, until the maximum authorized capital amount has been reached. There is no need to have a payment schedule for offshore subscribed capital.
Paid capital is just what it sounds like – shares for which money has changed hands from the shareholder to the company treasury. From this point on, paid shareholders are able to vote on company decisions.
Regardless of the exact way your company is structured and thus incorporated, as well as the payment schedule and format of your shares, this most likely is when you will discover the extreme levels of confidentiality that offshore jurisdictions take so seriously. There are two ways the anonymity of directors, members and shareholders is protected in offshore jurisdictions:
1. The names of relevant parties, while usually checked by the jurisdiction’s registrars, are withheld from publicly available documents linked to the corporation.
2. The names are registered in the incorporation documents, but there is a great deal of flexibility in regards to third-party representatives and proxies.
Offshore financial centres are first and foremost dedicated to their corporate clients form abroad. If you have any questions about offshore company structures, or if you are interested in incorporating your company but need advice about which jurisdiction is most beneficial to you, then please do not hesitate to contact us today for more information. We’re happy to help you discover the exciting, profitable world of offshore business!
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