An offshore company refers to a company which has been incorporated outside the jurisdiction of where it does its primary operations. It is at times referred to as a non resident company. It may also refer to a company which has been incorporated as an offshore financial centre. In order to register offshore companies, there are certain provisions which are adhered to so as to make this possible. The company must be incorporated outside the jurisdiction and the business should take place outside the registered jurisdiction.
The offshore companies do not pay taxes for the income which is generated outside the registered jurisdiction. They instead pay the taxes due from the registered jurisdiction. The International Business Company is an example of an offshore company although in the recent past, there are several legislations which have been enacted so as to replace the IBC companies with the Business Company.
The offshore companies have many features which are similar to any other registered company. The memorandums of association as well as the articles of association are fundamental as they detail the company’s information as well as the internal processes of the company. The certificate of incorporation which is issued once the company has been registered is proves that the company has been registered. An offshore company must appoint an agent in the jurisdiction of their operation. This is the person who issues the official correspondence with the registrar of the company. He is also involved in the day to day running of the affairs of the company. A registered office of the company must also be issued where the official documents of the company as well as the legal notices issued.
The shareholders of the offshore companies are the legal owners of the company. It can either be an individual person or corporate entities. The directors and managers oversee the day to day running of the companies. In some instances shadow directors are required. These directors are residents in the jurisdictions of the companies and they are the ones who oversee the day to day operation of the companies.
The statutory records of the offshore companies are kept by the company secretary who also ensures that the company meets all the statutory obligations. These records differ from one jurisdiction to the other. This information which includes the minutes of the company meetings as well as the company’s members is kept in the jurisdiction where the company is incorporated. The book keeping of the offshore companies is expected to be perfectly done for example audited accounts, balance sheets and profit, loss accounts need to be provided.
Some offshore companies have a share company in which they issue shares to the shareholders. These are the limited companies whose shareholders liability is limited by the number of shares that have been bought. The shareholders get to enjoy the profits of the company through dividends. The companies limited by guarantee have the shareholders paying a certain amount of money once the company becomes insolvent. There are various types of companies available in different jurisdictions.
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