Client Requirements

Finance

An offshore company is able to give a loan to a related company located in a high tax area, with tax deduction for interest payments. In this way both inward investments from a foreign entity is achieved, which may be advantageous due to foreign investor protection laws, as well as tax savings on the deducted interest. Interest payments are often subject to withholding taxes, therefore it is important to choose a jurisdiction that maintains suitable double tax treaties in relation to interest payments. Suitable jurisdictions include Cyprus, Malta, the UK, the Netherlands and Luxemburg.

Personal and Corporate Tax Planning

For a high net worth individual with properties or other assets in a number of countries the possibility of utilizing an offshore company or an offshore trust can offer significant advantages. By establishing a trust that has minimal or no taxation on assets, the investor is ensured that investment profits are retained, extending the same tax-efficiency to the investors’ named beneficiaries. This saves taxes, legal fees and avoids publicity. Again, not everybody wishes to advertize wealth and an individual may wish to hold property through an offshore entity simply because of the privacy, which the offshore arrangement gives. An international trust in Cyprus in combination with an offshore company in for example the BVI or the Bahamas could be a suitable option.

Real Estate

Owning real estate through an offshore company allows in some cases for the avoidance of inheritance taxes, capital gains tax in case of sale, as well as income taxes. Most countries make no distinction between legal and physical persons as owners of real estate, so such transactions are relatively easy to complete. If, for example, an offshore company, beneficially owned by a UK non-resident, purchased a property in the United
Kingdom for investment purposes and the property was then later sold on to a third party the capital gain arising from the transaction would not be subject to United Kingdom capital gains taxation.

Employment Companies

Many companies utilize offshore structures for the employment of staff working on overseas assignments. This helps to reduce the costs associated with payroll and travel expense, administration, and may provide a tax and social security saving benefits for the employees. Suitable jurisdictions can be Cyprus, Malta and the UK.