Business owners nowadays are always on the lookout to reduce company costs and maximize their profits. One of the easiest ways for you to do so is an offshore company formation. The other one is utilizing an economic free zone.

In this article, we will be exploring offshore companies and jurisdictions, economic free zones (EFZ), differences between EFZs and offshore locations, and offshore banking. So, let us dive deep into this world and learn more about all of these.

Offshore Business Set Up and Jurisdictions

Let’s start at the very beginning, which is a very good place to start. Let us take a quick look at the what, how, where, who, and when of setting up an offshore business.

What is an Offshore Jurisdiction?

An offshore jurisdiction is a location outside of your country of residence. It is a remote location for you, where you can set up your company and run your business.

Why Should I Opt for an Offshore Location?

Most offshore locations offer several benefits to businesses so that you can maximize your profits.

• Tax Benefits: Most offshore locations are tax-free zones for all your earnings from global business transactions. This means that as long as your earnings are sourced from outside of the jurisdiction, your company will be able to enjoy a tax-friendly environment. However, if you do make earnings from business inside the country, you may have to pay income tax and will be subject to other regulations.
• Stable Political Environment: Your company will be immune from any political instability in your home country.
• Protection of Assets: Most offshore jurisdictions have provisions in place to protect your assets.
• Privacy: Offshore jurisdictions like Seychelles, Belize, and others have strict privacy and confidentiality laws in place to protect your business.
• Ease of Incorporation: Ideally, it takes about 2-3 days to incorporate your company in jurisdictions like the British Virgin Islands and others.

How Do I Set Up My Offshore Company

Now that you are interested in setting up your company in an offshore jurisdiction, here is what you need to do:

• Select an offshore jurisdiction that suits your business needs the most
• Find a business advisor to help you every step of the way
• Select your company name, structure, and business activity
• Prepare your documents, fill out the form, apply, and wait for approval.

It is important to remember that the cost and time of setting up your business may vary depending on the jurisdiction, your business activity, and your business’s structure. It is advisable to consult your business advisor for these specific details. Now, let us take a look at the second option for you to opitmize your business.

Economic Free Zones

Offshore locations are not the only locations that offer such viable tax benefits. Several countries have opened up Economic Free Zones (EFZ) or Free Trade Zones (FTZ) to boost their economies and provide business opportunities to entrepreneurs. FTZs are locations within a country that have their own rules and regulations and are treated as outside of the country. Here are some reasons why you should opt for a free zone company set-up:

• Specialised Tax Regimes: These zones offer specialised tax regimes so that you are free from paying VAT or customs charges on specific export goods.
• Infrastructure: Since FTZs are physically present inside your home country, you can enjoy easy access to required infrastructure like office spaces, transportation modes, and others.
• Access to Local Market: You can enjoy access to local and global markets and expand your business quickly.

Some of the top free trade zones in the world include:

• Dubai Multi Commodities Center (DMCC), Dubai
• Jebel Ali Free Zone (JAFZA), Dubai
• Sharjah Airport International Free Zone (SAIF), UAE
• Ras Al Khaimah Economic Free Zone (RAKEZ), UAE

Now, let us move to the heart of your business: your offshore bank account. This bank account is the key to your business transactions. It is the home of your funds and the protector of your net worth.

Offshore Banking

Ideally, you should open an offshore company and bank account at the same time. By doing this, you will ensure that your offshore business can start transacting immediately, and both would be in a location you can access. However, it is not necessary to keep your business and offshore accounts in the same location.

Why Should I Open an Offshore Bank Account

• Higher Interest Rates: Offshore banks offer higher interest rates to you so you can maximize your earnings.
• Privacy: Offshore banks protect your identity. In fact, in locations like Switzerland, you are given an identification number to protect your identity.
• Investment Opportunities: You can diversify your portfolio and enter the global market.

How to Open an Offshore Bank Account

Here is how you can open an offshore bank account:

• Seek help from a business advisor
• Pick your offshore jurisdiction
• Prepare your papers, fill out your application, submit your form and wait for approval.

Now, we have been talking about business advisors who can help you set up your offshore company and open your bank account. Business Setup Worldwide (BSW) is one such advisor. We have been helping business owners like you set up and scale their companies for over 7 years. If you want to know more, contact us. Our team of experts will be happy to help you.