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What is an offshore holding company?

Updated time: 18 Mar, 2022, 12:21 (UTC+08:00)

An offshore holding company is a company established in a country/territory with tax incentives and many other benefits. These companies are incorporated outside the territory where their main investors live

Offshore holding companies are often formed to passively hold shares of the assets of an account or other company. Offshore Holding Company can be used for a variety of purposes but is not involved in the purchase and sale of any products and services.

What is an offshore holding company?

The Offshore Holding company structure is usually incorporated as an international business company (IBC) in an overseas jurisdiction. The Offshore Holding Company trades, opens accounts, invests, and participates in financial transactions like a normal legal entity in the jurisdiction. However, you should learn and pay more attention to CFC tax obligations when establishing a parent company in a foreign country as it could help you reduce tax problems when establishing an Offshore Holding.

Offshore holding company advantages

Currently, the trend of Offshore holding models in the form of corporations or foreign limited liability companies in countries brings specific advantages to businesses. To attract foreign capital, many countries provide many offshore holding company advantages for non-resident entities.

Offshore holding company advantages

Some of the Advantages include:

  • Tax exemption - Special tax incentives
  • Financial privacy
  • Personal information and property protection
  • Separation of feasibility from parent company
  • Protection when getting in legal problems
  • Flexible structure

The effect of establishing a offshore holding company

Isolating the offshore holding company's liabilities by creating several subsidiaries in the form of offshore holding companies that are not liable to each other is a commonly used corporate structuring method for transnational companies.

Subsidiaries can benefit from the right internal financing strategies and tax restructuring when properly implemented between subsidiaries.

The effect of establishing a offshore holding company

An Offshore holding can be used as a means to segregate assets whether intellectual property, stocks, or any other type of investment, thus achieving risk reduction by separating Distinctions between legal and financial liabilities that exist between different entities.

Separation of business assets can help reduce the risk of any potential loss to the parent company or any wholly-owned subsidiary.

Best offshore jurisdiction for a holding company

There are many countries where you can open an offshore holding company. However, it will depend on the conditions of the countries - requirements - your business sector and place of residence/nationality will be able to determine whether you can open or not. Here are a few best offshore jurisdiction for an offshore holding company that we - One IBC have done for previous clients:

  • Singapore
  • Hong Kong
  • Republic of Cyprus
  • Scotland
  • Panama
  • Marshall Islands
  • Nevis

Offshore holding companies can be a suitable business option so that you and your company can keep assets and businesses separate. We – One IBC can help you establish a joint-stock company in a foreign country which can be done in a short time by the optimization of politics - legal institutions that help you to quickly become successful.

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