There is a big group of jurisdictions which are offshore, meaning that they are tax heavens and do not apply taxes, but only annual license fees for the renewal of the companies.
The biggest and oldest jurisdiction of this category is BVI (British Virgin Islands) the legislation of which was copied by many other countries ex British colonies like Belize, Seychelles, Anguilla, etc. Some of these jurisdictions have further developed their legal and tax system and are highly demanded for more specialized vehicles like Cayman Islands.
However, there’s a trend worldwide for transparency and these jurisdictions were blacklisted and under pressure. As a result they try to improve their legal systems, exchange of information agreements and compliance requirements. They can be used mainly at the end of structures as the final holding companies and the “saving pocket” of the investors and to a lesser extent in rendering services and trading because there are countries that treat them negatively
The main characteristics of the offshore companies are:
- tax heaven companies
- Exempt from local taxation
- Pay annual license fee- zero tax
- Not obliged to submit financial report
- No obligation to have local director
- Low cost of maintenance
- Ability to use corporate directors
- No information on beneficiaries, although in some of them there is increasing pressure for compliance requirements
- No information at the Registrar on Directors/Shareholders