Evgeny Smirnov

bsadsensedynamick

# Business nuances

The most popular offshore companies in 2019–2020

The most reliable offshore zones include the Cayman Islands, Hong Kong, Singapore, Taiwan, Guernsey, Cyprus, the Isle of Man, and Panama.

Article navigation

• Extended interpretation
• What is a classic offshore
• Special Economic Zones
• Offshore jurisdictions of the world
• Are there offshore companies in Russia?
• conclusions

Economic terminology is rapidly following economic practice, which sometimes leads to discrepancies in some concepts. More recently, offshore was understood as a territory within which it is convenient to hide illegally acquired capital.

Now it turns out that these are not only poor island states with exotic names that have created a "tax haven", but also quite ordinary European countries or parts of them. Moreover, there is an opinion that Russia has its own offshore companies.

Is this true, or is it just that the interpretation of the term has become broader? What is called offshore today? How many are there on the planet? These and other questions are covered in the article.

Extended interpretation

The idea of ​​avoiding taxation by registering a subject economic activity in a territory with a milder fiscal climate is quite old. It has been used by merchants and industrialists since ancient times, and formally the term "offshore" was coined in the 50s by American newspapers.

What is a classic offshore

The concept of offshore was finally formed after the collapse of the big country in the world - the British Empire (which should not be confused with England and the United Kingdom). Until 1947, the sun never set over the territory of the kingdom. Many colonies, having achieved independence, did not begin to live richer: the lack of managerial personnel affected, and there were other reasons.

After some time, the idea arose that it was possible to replenish poor state budgets by registering an enterprise on the territory, simultaneously freeing them from taxes and the annoying attention of national fiscal authorities. Such an attractive tax and legal climate immediately attracted many entrepreneurs, both law-abiding and not so.

Since then, an opinion has been formed that, in the classical sense, offshore zones are islands in the equatorial belt of the planet, where they do not ask where businessmen got their money from. And where they are physically located, these entrepreneurs are also not interested in local authorities. It was only necessary to comply with local legislation, and it was very liberal.

Definition: offshore - a country or part of it, within which registered enterprises with foreign capital are offered special preferential terms.

Four features were originally understood as special conditions:

1. The best taxation system for business, that is, in fact, its absence. It is enough for a businessman to pay the registration fee.
2. Fast and extremely simple design legal documents for business.
3. Simplified reporting or lack of mandatory reporting requirements.
4. Guaranteed secrecy about the founders, their partners and transactions carried out by their banks.

Despite the obvious harm brought by offshore companies to national budgets, all developed countries have come to terms with their presence on the world economic map. It is possible that there were no formal reasons to put pressure on the young independent "banana republics". However, history knows more than one example when very strict measures (up to interventions) were applied to states that were militarily weak and for less serious reasons.

Be that as it may, classic offshore companies have been successfully operating for several decades. Schemes for working with them are simple to the point of primitiveness. A common method of selling goods to an offshore enterprise with a minimum profit: a reduced tax is paid in the exporting country. Then the same product is sold at the market price, and the tax is not paid at all, because the intermediary company is registered offshore. In this case, both "partners" belong to the same owner. But no one knows about this, because the offshore company keeps the secret of the identity of the beneficiary.

Businessmen and corrupt officials argued only about which island states were the most popular among them and for what reasons. However, this situation could not continue indefinitely.

Special Economic Zones

Nowadays, opening a business in a classic offshore has become unofficially considered a sign of dishonesty. Of course, this fact itself could theoretically be hidden, but only until the first invoice issued or the contract concluded - these documents indicate payment and other details. If the company registration address is the Virgin Islands or Bermuda, this is alarming in itself.

At the same time, the so-called free (or special) economic zones began to develop, in some respects corresponding to the concept of offshore, but not to the full extent. Their differences are that, firstly, taxes are paid there, although relatively low, and secondly, the identity of the beneficiary can be recognized.

In other words, only two of the four criteria for belonging to offshore territories remain: simplified registration and preferential taxation.

In addition, a special economic zone can only be a part of the state - it usually does not occupy its entire territory.

A good illustration is the Hong Kong SEZ. When Hong Kong came under Chinese jurisdiction, many analysts assumed that the PRC authorities would extend the country's common laws to it. This did not happen for several reasons, in particular because there is an agreement with the UK on this subject. Hong Kong has a special economic zone that promotes high business activity. In the classical sense, this is not an offshore, but this unusual city is often referred to as such.

Special zones began to appear in different countries, including the most economically powerful. The main goal pursued by states during their creation is to stimulate the development of territories or sectors of the national economy, as well as to attract investment, internal and external. This factor also indicates the difference with the classic offshore.

The terminology has changed. Now, in fact, an offshore is called a SEZ. There was also a hybrid concept of offshore zones and their division on the basis of the privilege that an entrepreneur receives by registering an enterprise there:

• Low tax zones. Typically, firms (they are also often called offshore, although this is not entirely correct) are required to pay a registration fee and a single annual fee at a fiscal rate of 0%.
• Conditional offshore. It is possible to register an international company on their territories, and at the same time it is impossible to carry out direct commercial activities.
  It is also useful to understand the reason for the interest of states that open zones with special business conditions on their territory. By providing benefits, they lose part budget revenues, but in return require certain conditions to be met.
• Business transparency. An entrepreneur is obliged to keep accounting records and at the same time he cannot be guaranteed to remain incognito. If the state of which he is a resident sends a request to the offshore, he will receive a response about the identity of the beneficiary and other data of interest to law enforcement and tax authorities.

The enterprise must provide employment to the local population within the established boundaries, for example, hire a secretary, accountant or lawyer - according to the capabilities and scale of the business.

These conditions (especially the first of them) significantly reduce the attractiveness of non-classical offshore companies in the eyes of those who want to do business in secret. However, such orders have a big plus: it increases the credibility of the company. Indeed, in itself the desire to reduce tax burden naturally. If the entrepreneur does nothing illegal, then why shouldn't he take advantage of this opportunity?

Every year a list of the most reliable countries and a list of the best offshore companies operating in them are compiled. More on this later.

Offshore jurisdictions of the world

Each entrepreneur is looking for the best offshore in the world based on their goals.

Switzerland can be considered as such very conditionally, but certain signs are present. These are very low fiscal rates in some cantons, exclusion agreements with many states double taxation and the maximum possible confidentiality of business information. However, if there are good reasons for suspicion of illegal activity, it will still be provided. Accounting is a must. An enterprise registered in Switzerland is unlikely to be suspected of being used for money laundering.

Offshore companies of this type have been created on their territory by other European states: the Netherlands, Ireland, Luxembourg, Liechtenstein, Denmark, Malta, Estonia, etc. The UK is leaving the EU, but this country also has preferential zones. Orders in different states are different: tax rates range from 1 to 12%. At the same time, the authorities attract businessmen not only with them, but also with the general comfortable conditions created for entrepreneurial activity.

The Cayman Islands are considered a classic "terry" offshore. Foreign firms do not pay taxes here, and non-transparency of business is protected at the legislative level. The company is registered maximum per day. The result is 100 thousand business entities, five hundred banks, 8 hundred insurance companies and 5000 shares investment funds. The problems of a small country have been solved, at least in terms of employment - everyone can find a job if they wish.

Approximately similar laws are used by the Marshall Islands, the Seychelles and the South American country of Belize. Offshore, registered here, allows you to develop business, in particular banking. Belizean law prohibits the disclosure of trade secrets, including those of beneficiaries.

The "Panama scandals" not so long ago glorified the country, previously known more thanks to the famous canal dug between two oceans. The state has not concluded an international agreement on combating financial fraud with the FATF and OECD organizations. It is difficult to judge how much this fact contributes to the popularity of Panama in the world rankings, but there are obviously enough people who want to register their company there.

Cypriot banks were hit hard during the massive crisis. Since the beginning of 2013, the Greek part of the island has been excluded from offshore by the Central Bank of Russia. Of the privileges, there was a reduced income tax rate and a simplified notification procedure. An end has been put to the disputes about whether Cyprus is an offshore zone or not.

Andorra is also unlikely to be classified as offshore today. The main advantage of this country lies in the right granted to foreign businessmen to own local enterprises completely. Taxes are attractive, but the rates are not zero: 10% on profits, 4% VAT.

A relatively respectable offshore company was created on Curacao, an island in the Caribbean. Profits are taxed at only 2%. Mandatory annual audit and reporting has been established.

The British Isles have different jurisdictions: Maine, Guernsey, Jersey, which are formally considered independent states that are members of the Commonwealth. The zones taken on them are oriented by specialization. For example, in Guernsey it is profitable to engage in electronic gambling business, in Maine it is convenient to register shipping companies, and Jersey is optimal for providing financial services.

England, Northern Ireland, Wales and Scotland have their own special economic zones- parts of the United Kingdom. English offshore companies for LLPs (Limited Liability Company - an approximate analogue of our LLC) are considered one of the most respectable, they combine legal transparency and tax flexibility.

As is probably already clear, today offshore zones are understood as territories that provide benefits to foreign businesses. In the US, these include Puerto Rico and the US Virgin Islands (states that America has full control of), as well as the states of Delaware and Wyoming. American taxation rules are very complex, but offshore advantages objectively exist.

Malaysia uses the island of Labuan as a special territory. It can also be considered offshore very roughly - we are talking only about a favorable tax climate and a ban on disclosing the identities of business participants.

The reasons why Singapore is sometimes referred to as offshore is mainly due to the territorial principle of taxation. If a citizen of this country received income outside of its borders and did not bring it to his bank account, then he does not pay taxes.

Benefits exist and there are many. At the same time, Singapore has signed agreements on the automatic provision of information about beneficiaries with many countries, including Russia. Reporting and accounting are required. Singapore is not an offshore, it is just a country in which it is profitable to do business.

A separate line is the United United Arab Emirates, being a state with a federal structure and general administration. There are no taxes from individuals as such in the UAE, which gives some reason to equate this country with an offshore. Numerous benefits speak in favor of this opinion.

In the Emirates there are zones with special economic conditions: Dubai and Ras al Khaimah. The main advantages of registering enterprises here are political stability, developed infrastructure and an efficient banking sector. The movement of capital is practically unlimited.

There are also disadvantages. The very high cost of the registration procedure, the difficulty in obtaining ownership of real estate and strict licensing. There are also complaints about some other bureaucratic problems in the UAE. Reviews are generally positive, but local orders not always understood by Europeans.

In the classical sense, the Emirates cannot be considered offshore. It is impossible to launder or hide money in the country.

Zones of preferential taxation have also been created in the post-Soviet countries. Against the backdrop of a constant struggle against the outflow of investments, in the Russian Federation, the Republic of Belarus and other former republics of the USSR, legislative acts are being adopted to prevent the outflow of capital to uncontrolled territories. As for the SEZs, which were opened by Kazakhstan, Armenia, Azerbaijan and some other countries, they do not correspond to most of the signs of an offshore.

The purpose of special economic zones is the development of individual regions and industries. For example, a target industrial, tourist or IT offshore is being created. Georgia has taken this path, at the same time exempting foreign companies from taxes (including on property) and allowing them to change the profile of their activities within the limits of legality.

Are there offshore companies in Russia?

In the original sense of the term, there are no offshore companies in Russia. The country has special administrative regions (SAR). The rules established in them provide for benefits for enterprises registered in their territory.

Under Russian law, local authorities are given the right to set their own taxes and fees. If the legal entity does not economic activity within the boundaries of the administrative unit that has created an internal "offshore zone", it is released from the fiscal burden. In 2020, the list of "offshores" of Russia contains 25 items, divided by their focus.

In addition to the SAR, on the basis of the Decree of 14.03.04 in the Republic of Kalmykia for some categories of entrepreneurs, the income tax rate was reduced to 5%.

The desire to develop Far East and to attract foreign capital to this region is expressed in the adoption by the State Duma and the approval by the Federation Council of a bill on the creation of special administrative regions on Russky Island and Kaliningrad, positioned mainly for foreign investors.

Approximately on the same legal basis tax incentives other internal territories of the Russian Federation. However, even today, many entrepreneurs prefer to work with foreign special economic zones (especially if it is an IT offshore), registering their companies in them, located, for example, in Yekaterinburg.

In the Russian SAR, businessmen who have registered their enterprises on their territory are provided, in addition to a reduced income tax rate, additional benefits:

• Reducing the transport fee.
• Exemption from taxes on land resources and property (for a period of up to 10 years), if it was acquired for economic and production activities.
• The right to apply accelerated depreciation of fixed assets.
• Reduced coefficients for calculating insurance premiums (until 2019).

conclusions

Registering an enterprise in a classic offshore nowadays leads to a certain “toxicity” of the business and a decrease in the level of trust.

The most popular are economic zones (free, special, special administrative regions, etc.). They differ from offshore companies in their limited anonymity capabilities, and in terms of reducing the tax burden, they are similar to them.

What is an offshore zone. What are they used for, what benefits do preferential offshore zones provide. Legal withdrawal of funds to offshore. List of zones for Russia for 2020 and their varieties.

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The concept of "offshore zones" has been around for more than a year. Everyone at least once heard about how businessmen withdraw their funds through companies registered in the territories that offer them benefits.

But what are offshore zones? What are their advantages and features, not everyone knows.

These questions are primarily asked by the owners of enterprises that plan to register in offshore zones.

Therefore, we will try to understand the main points and how to legally withdraw funds to an offshore zone.

General aspects

The benefits of using offshore zones are that international organizations are provided with the following conditions:

• favorable preferential taxation;
• ensuring non-disclosure of information about owners, partners and transactions;
• fast registration, due to understandable conditions;
• lack of financial control government agencies(not in all countries).

It should be taken into account that many states, on whose territory there are offshore zones, include the mandatory employment of their own citizens in the conditions of registration of non-resident companies.

What it is

In modern conditions market economy every owner of an enterprise engaged in international business would like to reduce the amount of taxes paid.

There are a limited number of ways to do this legally. One of them is registration in an offshore zone.

What are they needed for

The main purpose of offshore zones is to simplify the conduct of international activities of companies. First of all, they avoid double taxation.

They also provide an opportunity to reduce tax payments compared to companies conducting international activities according to the standard scheme.

Offshore companies can be used to simplify export-import operations, which allows them to be exempted from additional tax payments.

Benefits can also be obtained by legal entities engaged in trust operations. Offshore zones allow you to bring the company to the international level.

Registration on the territory of offshore countries allows you to use international banks. This increases the likelihood of transactions between companies in the global market.

In addition, registration in an offshore zone allows you to attract additional international investment in the company's activities.

That is, we can say that the offshore zone allows you to effectively bring the company to international market and announce its activities.

Legal grounds

The use of offshore zones is legal within the regulatory framework most states.

IN Russian legislation a number of acts are presented that regulate the issue of creating offshore companies, a list of zones in which this can be done, etc.

Federal laws govern currency operations carried out as part of the international activities of companies registered in offshore zones and operating in Russia and other states.

Legislative documents include:

The implementation of any activity involves the movement of funds. And it usually happens in non-cash form, therefore, when conducting the activities of companies registered in offshore zones, banks of the country in which the registration was carried out take part.

The relations of Russian banks with them are regulated.

At the same time, it should be noted that the leaders of a company that does not comply with the rules for the legal use of offshore zones are criminally liable for their actions.

The punishments provided for such atrocities are indicated in.

To avoid double taxation, aspects of the activities of international companies registered in offshore zones are also highlighted.

List of offshore zones in 2020

There are offshore zones of the world that have been operating for more than a dozen years. The first was Switzerland, which has special protection legislation bank deposits followed by the Netherlands, followed by Britain.

Today there are several dozen of them. Ministry of Finance Russian Federation at the same time, it does not recognize official and legal activities in all zones.

You can find their list in the order of the Ministry of Finance of the Russian Federation, which is mentioned above. The appendix to this order, which, in fact, contains itself, can be considered further.

It is worth noting that in 2009 another one was published normative act in red. , on changes to this list and the exclusion of certain countries from it.

What are the types

Depending on the features inherent in a certain offshore zone, they can be classified according to several criteria.

In general, there are three main types:

Classic	“then, as a rule, island states of a small size, allowing non-residents, for a fee, to register an international company that will have a legal address within it, and carry out its activities outside of it
With a low level of taxation set for companies	Registered in their territory single tax in a certain amount
Conditional territories	Not being offshore zones, but enabling international companies to register on their territory, without subsequently carrying out entrepreneurial activities

With territorial taxation

Territorial tax regime in offshore zones is the most profitable and attractive for businessmen. But it has its own characteristics.

Companies registered in offshore zones with a territorial tax regime receive a benefit in the form of a 0% rate.

Also, the conditions for registration in their territory provide for the avoidance of double taxation by fulfilling certain.

But in return for such benefits, the state in which the offshore zone is located puts forward its own requirements for offshore enterprises.

Video: offshore zones. Offshore and corruption

They support “transparency” in doing business and therefore require managers to keep financial records.

Also, within the framework of the conditions of registration in such zones, requirements for the employment of citizens may be presented.

But it is worth noting that doing business registered in zones with territorial taxation increases the level of trust in the company.

The most famous countries that have created offshore zones with similar conditions are Singapore, Hong Kong and others.

Low tax

Countries with low taxation provide for a tax on income, which is only 10%. Of course, in comparison with the 0% rate, this is a significant figure.

But if we compare this rate with the 35% rate established in the Russian Federation for international companies, the advantages are obvious.

At the same time, one should not forget about reporting, which in these conditions of cooperation should also be kept by offshore owners.

State authorities of countries can also hold annual companies in order to verify the legality of their work. This is due to the fact that many entrepreneurs simply use offshore companies to get rid of taxes and withdraw personal funds.

Countries that have created offshore zones with minimal taxation are interested in the “transparency” of the operation schemes of companies registered on their territory. Therefore, exercise personal control over their activities.

For certain activities

In certain countries where an offshore zone is provided, only companies engaged in a certain type of activity are exempt from taxation.

For example, in order to stimulate trade in the international food market.

In this case, more goods of this category enter the international market and ensure their availability, which is extremely important when considering the gastronomic crisis in certain regions.

Where some entities are exempt

Another type of loyalty of countries with dedicated offshore zones is the exemption from taxation of certain legal entities.

But only at the discretion of the bodies responsible for registering the company. At the same time, reporting and mandatory bookkeeping may be canceled in such zones.

Cyprus is one of those areas. It is very popular with businessmen who conduct their main activities in the territory of the Russian Federation.

Is there in Russia

There are offshore zones that are world famous. They provide their terms of cooperation to many countries and are very popular.

But also, considering the list of countries with offshore zones, you can see in it countries that are little known both in themselves and as a privileged zone.

As you know, an offshore zone may not be represented entirely by a country, but by its certain territory.

In this regard, many international companies have a question whether there are offshore zones on the territory of the Russian Federation.

Taking into account the fact that the majority of international companies operating in the territory of the Russian Federation are registered in other states, it would be advisable for Russia to have its own preferential zone.

If we consider an offshore zone as a classic or with minimized taxes, and created in accordance with all the rules, then there is no such territory in Russia.

But at the same time, there is a separate zone that allows you to simplify the process of import or export, part of financial transactions, and also exempts international companies registered on its territory from taxation. Such territory is the Kaliningrad region.

It is located in the most favorable location for European countries. But such a zone is not offshore, it is conditional and provides only partial benefits for non-resident companies.

The offshore zone is in simple terms, - the state or a specially designated part of it, which is intended for registration of the activities of foreign companies.

O optimization of the amount of taxation is always a topical issue for all business owners. Given the constant changes in tax and administrative legislation and the external economic environment, the lack of assistance from the state leads to the need to reduce costs and protect capital by withdrawing it to offshore zones. Below you will learn what offshore is. plain language, which zone to choose, how to properly draw up documents and what is the essence of offshore schemes and their legality.

The content of the article :

What is Offshore in simple words and examples

According to Wikipedia offshore ( from English. off shore - from the coast) is a country or region in which special conditions for doing business are established for foreign companies. For example, zero tax rates, simple reporting forms, confidentiality of real business owners. The company is registered in the country, performs certain actions to obtain a business permit and places in local bank capital.

On the territory of our country, there are also free economic zones in which controlled foreign companies operate, the activities of which in certain cases are taxed.

Offshore in simple terms- this is a territory where favorable conditions for doing business are created, there are no taxes or their size is minimal, there are no bureaucratic procedures that complicate the life of entrepreneurs, preferential currency and customs regimes, the ability to hide the name of the real owner. In general, all the conditions for prosperity, saving time on reports and money for the development of a successful business.

For ordinary people, offshore is associated with a way to withdraw dishonestly earned money offshore, deceive the state, and conduct fraudulent operations.

Offshore features:

1. Tax-free or preferential tax treatment. The exception is the annual fee, which is charged at a fixed rate.
2. The closed nature of corporate and financial information. This sign is losing its relevance in connection with the adoption of international acts on cooperation and soon there will be practically no countries that will ensure absolute confidentiality.
3. There are no requirements or minimal requirements for accounting and reporting. In classical zones, minimal accounting and document management is required to determine financial condition and content business transactions. For controlled foreign companies (CFCs), financial statements must be kept for the purposes of compliance with the law by Russian tax residents.
4. No currency control and the need for an audit or formal requirements for their conduct.

Due to the concealment of data by individual zones, the exact amount of funds in offshore zones is unknown, but according to individual information, from $ 32 trillion.

Offshore or offshore - how do officials write?

If you think that we made a mistake in writing the term, then this is not entirely true. In Russian, there is no single rule for writing the term. " offshore” with one letter “F” in everyday correspondence and periodicals appeared earlier than it was printed in dictionaries. Both words with one or two "Ф" are derivatives and are used in the network the same number of times, in print publications they still indicate "offshore".

The ambiguity is associated with the order of writing the phrase in English, in which off with two letters or a tribute to the fashion for the use of double consonants "ff", which is especially pronounced in the spelling of surnames.

• Today in the spelling dictionary there is a term with one letter and its derivatives - offshore, offshore, offshore, offshore.
• The dictionary of the Russian Academy of Sciences, edited by V. V. Lopatin, contains the word "offshore".
• The Ministry of Education and Science of the Russian Federation fixed on 06/08/2009 by order No. 195 approved the list of dictionaries of the Russian language, where spelling with one and two letters is found.

The history of offshore zones

The first offshore zones appeared V Ancient Greece . Merchants, in order to avoid paying the 2% import and export duty to the treasury of Athens, sold goods in other areas or exported them to the islands. In the US, offshore companies have found a historical reflection since the 18th century, when taxes were high and sales were made through Latin America.

The term began to be actively used in the 50s of the XX century after the publication of an article in a newspaper about a company whose office moved to another country, as the American authorities “crushed” it with requirements, formalities and taxes.

At the stage of growing popularity of offshore zones, Switzerland began to attract money into the country's economy, created currency exchange centers, developed a system of financial secrecy, and became a haven for foreign capital. A law was passed prohibiting bankers from disclosing information about their clients.

In Russia, the first office of an offshore company was opened in 1991. Riggs Walmet Group in Moscow began offering to register a business in a tax-free zone. The cost of services is $5,000, which is 8,750 rubles in terms of that exchange rate. (with an average monthly salary of 300 rubles).

In the 1970s, after the British colonies gained independence, funding from state budget. The islands, in order to provide for themselves, began the registration of offshore companies.

Recently, many countries are adopting a law similar to the Swiss one in order to compete in the market and increase the amount of capital raised. States that are on the island and do not have rich natural resources develop only at the expense of this single source of income.

List of offshore countries and their categories

Legal entities registered in an offshore zone or otherwise in " tax haven» must fulfill several conditions, one of which is a ban on doing business in the country of registration.

List of offshore companies according to the Bank of Russia:

Group 1 - Respectable:

• Montenegro;
• Ireland (Dublin, Shannon);
• Malta;
• China (Hong Kong (Xiagang));
• Switzerland;
• Singapore;
• Channel Islands (Grancey, Jersey, Sark, Maine);
• Liechtenstein.

Group 2 - Classic:

• Antigua and Barbuda;
• Commonwealth of the Bahamas;
• Barbados;
• Bahrain;
• Belize;
• Brunei - Darussalam;
• Territories dependent on Great Britain and Northern Ireland (Anguilla, Bermuda, British Virgin Islands, Mentserrat, Gibraltar, Turks and Caicos, Cayman Islands);
• Grenada;
• Republic of Djibouti;
• Commonwealth of Dominica;
• PRC (Macau (Aomyn));
• Costa Rica;
• Lebanon;
• Mauritius;
• Malaysia (Labuan island);
• Maldives;
• Monaco;
• Netherlands Antilles;
• New Zealand (Cook Islands, Niue);
• UAE (Dubai);
• Portugal (Madeira Island);
• Samoa;
• Seychelles;
• Saint Kitts and Nevis;
• Saint Lucia;
• Saint Vincent and the Grenadines;
• USA (Virgin Islands, Commonwealth of Puerto Rico, Wyoming and Delaware);
• Kingdom of Tonga;
• Sri Lanka;
• Palau.

Group 3 - Low level of prestige

• Andorra;
• Nauru;
• Aruba;
• Vanuatu;
• Liberia;
• Marshall Islands;
• Islamic Federal Republic of Comoros (Anjouan Islands).

Offshore zones and their division by type of business

Each zone has its own advantages, so you need to study all aspects related to the conduct of business in order to get the maximum benefit.

Let's return to the definition - what is an offshore zone?

An offshore zone is a territory with established boundaries, where a special registration regime is defined in different jurisdictions.

Conditional division of jurisdictions:

Island

European

Small islands and archipelagos in the Caribbean, Pacific and Indian Oceans. A special feature is the absence of taxes, small annual payments, no need to keep accounting records, anonymity. Companies in such zones often have a low reputation.

Separate administrative territories in a state with an established special regime

For example, Labuan in Malaysia, individual states in the USA. In Russia - Kalmykia, Altai, Uglich.

The list of offshore zones and the work to control them are maintained by the International Monetary Fund and the central banks of different countries.

Table - Classification of offshores by criteria

Criterion	The name of the country	A comment
Low tax rates	UK, Scotland	Possibility of not paying taxes
Business areas	Holland, Latvia, Poland, Switzerland	I provide special conditions for companies that are engaged in tourism, agriculture, IT-technologies
R&D in the field of high technologies	China, Singapore
Doing an honest business	Switzerland, Estonia	Low taxation, no bureaucracy
Loyal Legislation	Bahamas, Belize, British Virgin Islands	No business registry, anonymity, no reporting requirements
Respectability	Hong Kong, Luxembourg, Switzerland	Tax incentives, high requirements for financial reporting, a register of enterprises is maintained. Popular with prestigious companies

How to choose an offshore zone and open an account?

All zones are located in different parts of the world, but regionally they can be classified into groups:

• Asian countries;
• Caribbean;
• Island;
• Gibraltar;
• Luxembourg and Switzerland.

Table - Comparative information of offshore zones

The name of the country	Location	Tax rate, %	Registration fee, $	Mandatory reporting	Audit	Privacy Guaranteed
Switzerland	Western Europe	12	18 900	+	—	+
British Virgin Islands	caribbean sea	—	1 900	—	—	+
UAE	Asia	—	18 900	—	—	—
Malta	Mediterranean Sea	5	5 000	+	+	—
Luxembourg	Europe	29	23 200	+	—	+
Cayman islands	caribbean sea	—	7 500	—	—	+
Hong Kong	Asia	16	2 500	+	+	+

Each zone is interesting for its advantages and disadvantages, you need to consider them through the prism of the type of activity.

Officially, Cyprus is not an offshore zone after joining the EEC and changes in tax laws, but the benefits of registering enterprises on the island are undeniable:

• income tax - 12%;
• registration fee - $ 2,500;
• VAT - 0 and 15% - if the goods are sold in the EEC;
• processing speed;
• the minimum number of shareholders is 1;
• avoidance of double taxation;
• authorized capital - 1,000 euros;
• no taxation of income received outside the zone;
• nominee director allowed.

Despite not being on the Bank of Russia list, Cyprus is popular with Russians who withdraw $10-15 billion a year, according to RANEPA.

Island zones are the most popular, as they are less affected by political and economic changes. The British Virgin Islands receives $37.7 billion in investments annually, the Bahamas - $6.7 billion. Bermuda, the Cayman Islands and Jersey receive a total of $2.1 billion.

To conduct business in the Russian Federation, you need to choose countries with which an agreement on double taxation has been concluded - Luxembourg, Switzerland, Cyprus, in order to pay taxes only at the place of registration.

FOR and against offshore companies and zones

Benefits of using offshore:

1. No taxes or preferential system with low rates.
2. Money protection.
3. Minimization of business risks.
4. Reducing the cost of paying taxes, fees, duties.
5. Confidentiality and anonymity.
6. Transparent legislative regulation.
7. Geographic expansion. Work in a foreign market speeds up the process of diversification of activities.
8. Simplified procedure for registering an organization.
9. Possibility to entrust management to an authorized person.
10. Accumulation of capital on favorable terms and absolutely safe.
11. Protection from raiders and competitors.
12. Lack of FTS checks.

Disadvantages of working offshore:

1. Distrust to the company of large market participants.
2. Difficulties in obtaining a loan.
3. Risk in zone selection, misjudgment of jurisdiction.
4. The constant attention of special services to individual companies that can harm prestige and reputation.
5. Change of legislation.

Many risks can be prevented by choosing a company with a good reputation, which assists in registration, registration and support of offshore activities.

How to open a company offshore

A legal entity that does work under a preferential taxation system, within the framework of transparent legislation and maintains a business located outside the country of registration of the owner. What is an offshore company

There are 3 ways to choose from:

1. Purchase of a ready-made business;
2. Services of a specialized organization;
3. Self registration.

In the first two options, no significant effort is required. It is enough to choose an organization, it is better on the recommendation with the real experience of partners or acquaintances, get advice and pay the cost of services.

With self-registration, the process includes 8 steps:

1. Country selection. It is necessary to assess the suitability of the zone for the planned goals, the amount of taxes and annual fees, the cost of maintenance, the need to hire employees, etc. Size is important authorized capital, the number of owners and the level of anonymity.
2. Name choice. Determine the organizational and legal form. Remember, registration will be refused if the name is very similar to an already existing company or can be misleading. For example, they will not register with the name “Magnit”, of which there are more than 100 in our country. And it is also forbidden to use words or parts of words in the name - trust, finance, bank, which may be associated with a credit institution.
3. Documentation. According to the list, it is individual for each country, collect all the papers and submit for verification.
4. Payment. Obtaining approval from the registration authority, pay the fees and registration fee.
5. Registration. Inclusion in the register with the right to conduct business.
6. Constituent documents. Preparation of the Articles of Association, the order on the appointment of a director and the memorandum of association, with the obligatory indication of the internal rules for the activities and functioning of the board of directors, the procedure for issuing valuable papers. All papers are submitted for verification, after which a certificate of incorporation is issued.
7. Completion of registration. All Required documents received, do business.
8. Account opening. Can be done by the owner or an authorized person (if there is a power of attorney). Constituent documents, an offshore certificate are handed over to the bank.

The process of registering a company offshore takes 3-30 days.

How Offshore Schemes work in examples

Let's consider how offshore zones work on the example of capital withdrawal schemes used in practice. The main purpose of registration of legal entities in offshore is tax evasion and withdrawal of money from the country. Often assets are taken offshore if there is a large amount accounts payable and the planned liquidation of the company in the country where the business is conducted. Despite the main global trends towards increasing the transparency of foreign exchange flows and tightening control, offshore companies remain attractive.

Consider the most popular interaction schemes:

1. Export and import activities. After registration, the company continues to do business in its country and imports and exports products. There are savings due to the absence of customs duties, which leads to lower prices and higher profits.
2. Offshore in the real estate market. The market is quite closed and brings a lot of income. Investors maintain confidentiality and do not pay income tax.
3. Withdrawal of capital of insurance companies. Tax incentives help increase the liquidity and growth of capital placed in foreign banks.
4. Holding activities. Large companies combine the management of different types of resources - production, finance, materials. The absence of the need to pay taxes and confidentiality significantly optimize costs.
5. Capital protection account. Banking secrecy and economic stability of the region allow you not to worry about the safety of funds.
6. Investment tool. The company's profits are invested in order to generate income without paying fees and duties.
7. Profit for shipowners. Offshore registration will significantly reduce costs and provide political privileges.
8. Savings on stock market . Since no one is immune from fluctuations in exchange rates and quotes, the risks are always above average, and tax minimization will reduce possible losses.
9. Protection of intellectual and copyright, ease of disposal of rights. Franchise work, transfer to use. The absence of a long registration package, ease of registration.
10. Remote control. With such a scheme of interaction, the Federal Tax Service and other controlling structures will find it difficult to collect taxes and determine the location of the enterprise.
11. Consolidation of resources. If necessary, one owner of several enterprises can easily manage capital and engage in their self-financing, transferring funds from accounts if necessary.
12. Rent. If the tenant is a foreign company, then the landlord does not pay taxes.
13. Reputation. The degree of trust in a foreign company is higher than in domestic ones, since the costs of its maintenance already speak of the partner's solvency.
14. Non-resident employees. Reducing the cost of maintaining staff - contributions, social packages, salaries, income tax.
15. insurance services. Registration of companies in good areas guarantees low insurance risk and allows you to profit from mutual funds by optimizing tax expenses.
16. Map. Get a card for an offshore account, to which you transfer all the money and use it anywhere in the world. Bank commissions are fixed. And not a percentage of the amount as in the Russian Federation, which makes it profitable to transfer and receive a large amount in cash. An additional advantage is the privacy of the owner.
17. Loan. You can draw up a loan agreement, according to which you can withdraw funds to the account on a monthly basis. A convenient scheme in the presence of large debts and the likelihood of arrest of accounts and assets.
18. Service. Transfer to the account under service agreements, the actual implementation of which no one will check. For example, diagnostics of equipment or consulting on personnel management issues.

Any scheme is applicable after defining the goal and evaluating the real possibilities.

Is it legal to work offshore?

Many offshore companies finance illegal activities, which can lead to an international threat.

Today, more and more people in our country hear the phrase "offshore zone". But a lot of people just don't understand it. And this is not surprising. After all, people who are in no way connected with business, economics or jurisprudence have not come across the concept of “offshore zone”. Let's try to figure out what "it is".

An offshore zone is a country or part of it, the government of which provides non-resident companies with preferential conditions for doing business. Non-resident companies are understood as organizations, enterprises, companies, firms, whose owners according to the documents are Foreign citizens. For example: the owner of the company is a representative of Russia, but the company operates in Cyprus. In other words, the company is registered in Cyprus and pays taxes to Cyprus, not Russia. This is what is called an offshore zone.

Registration of a company in such zones has one, but very significant advantage: decrease in tax rates. In some countries, you can register a company and not even pay tax for it. In other words, the offshore zone provides its "participants" with reduced taxation.

Based on this, it can be noted that the offshore zone in the economy is presented in the form of a financial center, which attracts foreign capital with surprising ease by providing tax incentives.

An offshore zone is a zone of economic space aimed at registering and conducting commercial activities. Today, offshore zones are called countries or world states that provide such a privilege to foreign enterprises and companies.

As noted earlier, doing business in offshore zones is not only profitable, but very profitable. Low tax rates allow you to collect the maximum profit. But it is worth noting that international companies operating in an offshore zone are forced to comply with all laws without fail, as they are under the jurisdiction of another country that is part of an offshore zone.

Do not confuse the concepts of offshore and offshore zone. These are different concepts in economics. The first in economics is understood as a company operating in an offshore zone. And the second concept in economics refers to the country where the company operates - offshore.

Registration in such an "economic" zone provides the following benefits:

1. All cash companies and assets are not subject to global currency control And currency regulation.
2. Low level of taxation.
3. All company assets in this country are "safe".
4. Storage capability financial resources and assets in the largest and most stable banks in the world. Note that this advantage is very significant. Since the world's major banks are more protected from bankruptcy.
5. All information regarding the owners of the company, assets and shareholders is kept confidential.
6. Companies are given the freedom to accounting.
7. Companies have the full right to conduct any financial transactions with other participants in the offshore zone.
8. Confidentiality of conducted transactions.

Peculiarities

Offshore zones have become popular and in demand due to their features.

List of features of offshore zones:

• Simplified and accelerated procedure for registering organizations. Upon registration, you will need to pay a certain fee. In each country, the amount of the "contribution" is not significantly different.
• Income tax and income tax are paid at reduced rates.

Advantages of offshore zones

But if participation in such a zone is only beneficial for enterprises and companies, then many people have a question, what is the interest of the country that provides international companies with such privileges. The answer is simple. Due to the reduced taxation, many international organizations seek to register a company in this zone. Income from registration is large enough, so the country only benefits by improving the inflow foreign investment its domestic economy. To regulate and manage offshore companies, secretarial bureaus are being created in the country. And these are additional jobs.

Therefore, the offshore zone partially solves the problem of unemployment.

List of offshore zones

If you look at the map of the world, you can be very surprised how geographically "scattered" the countries with offshore zones are. They are present on every continent. Currently, there are more than 50 of these countries. Every year, offshore zones are expanding, supplemented by new jurisdictions (in the economy, a country of offshore space is usually called a jurisdiction).

In 2016, the most “low-tax” global jurisdictions (offshore countries) were:

1. Scotland.
2. Great Britain.
3. Cyprus.
4. Isle Of Man.

The title of world classical jurisdictions in 2016 was earned by such countries as:

1. Seychelles.
2. Mauritius.
3. Dominica.
4. Saint Kitts.
5. Nevis.
6. Anguilla.
7. British Virgin Islands.

Registration of international companies in these countries can help to completely avoid taxes. Moreover, in these countries of the world it is quite legal. Classical world jurisdictions are used for various lines of business. In this zone, you can freely engage in both trade and consulting.

The list of offshore zones in Europe consists of:

1. Latvia.
2. Holland.
3. Switzerland.
4. Slovakia.
5. Poland.
6. Great Britain.
7. Czech Republic.
8. Estonia.

But Europe has its own registration rules. For example, in Estonia, global companies involved in the development of IT technologies are more welcome. Holland and Switzerland are more focused on the registration of holding structures. To conduct business in the field of tourism, Agriculture, trade conditions are considered more favorable, provided by the Czech Republic, Slovakia and Bulgaria.

Asian jurisdictions are considered one of the largest. People call them "Asian tigers". List of Asian world jurisdictions:

1. China.
2. Singapore.

These jurisdictions are suitable for organizations that are engaged in development and various kinds of research.

About opening a company in Hong Kong in this video:

List of other jurisdictions:

1. USA.
2. Republic of South Africa.
3. Canada.
4. Islands of New Zealand.

Classification

According to the world classification, offshore zones are divided into two types:

1. In the first variety, foreign companies are exempt from paying all taxes on the profits of an organization or company. In return for the “exemption”, the organizations undertake to pay a fixed cost annually.
2. In the second type, the zone provides preferential terms for organizations. This type is called a financial center in economics. Reducing the tax rate allows you to more successfully conduct business.

Based on this classification, it can be noted that offshore countries are divided into those who completely exempt the organization from taxes and those who only reduce tax rates.

It should be noted that when registering a country in offshore zones of the second type, the company will have to pay such types of taxes as:

• Inheritance tax.
• Capital gains tax.
• Corporate.
• Income.
• Sales tax.

When choosing an offshore country, you should carefully study the local legislation in the field of registration and conduct of commercial activities.

Many economists argue that it is best to register a business in Baileys, Panama, St. Kitts, or the Seychelles or British Virgin Islands. These are countries where there are no taxes at all. When registering an organization in these states, you will not need to provide financial statements. These states are recognized as world jurisdictions. These are the most famous, demanded republics. By registering a company in these states, you will not have to worry about confidentiality in the future. The great advantage of these jurisdictions is the complete lack of control by local government.

The most respectable world jurisdictions are recognized: Scotland, Maine, Great Britain and Hong Kong. These countries will require financial statements. But in return, they provide foreign organizations with very significant tax benefits. It should be borne in mind that local control over organizations is carried out, so foreign organizations will always be “under supervision” of local authorities.

According to experts, it is advisable to register your business in Estonia, Portugal, Montenegro or. These jurisdictions provide very reasonable tax rates.

In absentia, this classification also distinguishes a third type of jurisdiction, which does not require the payment of taxes only from certain types of activities. This refers to transactions that are carried out between participants in an offshore zone in a certain jurisdiction. Such countries of the world are the United Arab Emirates, Algeria, the Brazilian Republic, Morocco.
Blacklists

As noted earlier, the choice of jurisdiction should be approached very carefully and thoroughly. It is advisable to consult with a tax expert before choosing a state.

In Russia, there is the concept of a “black list of jurisdictions”. This list includes countries around the world that, according to the government, are not able to provide low tax rates and do not meet the title of "offshore zone" in economic requirements. According to this list, it is highly undesirable to register a company in:

• Bahrain.
• Caicos.
• Anguilla.
• Barbuda.
• Barbados.
• Aruba.
• Antigua.
• Grenada.
• Montserrat.
• Puerto Rico.
• Nevis.
• Liberia.
• Nauru.
• Samoa.
• Republic of Maldives.

According to the "black" list, you should also be wary of registration on such islands as:

• Seychelles.
• Marshalls.
• Alderney.
• Jersey.
• Virgin.
• Cayman.
• Dutch.
• Virginia in the United States of America.

23.11.2017

Majority developed countries accept their own lists of offshore jurisdictions, operations with which, although not prohibited, are subject to special control and / or taxation. The national lists of offshore jurisdictions, as a rule, contain most of the traditional offshores, such as the Cayman Islands, Bahamas, BVI, Marshall Islands, Panama, Seychelles, Belize and others.

In Russia, there are several lists of offshore zones approved by departmental acts. However, there is currently discussion single list offshore zones.

1. To date, the main Russian list of offshore zones is contained in the Order of the Ministry of Finance of Russia dated November 13, 2007 No. 108n “On approval of the List of states and territories that provide a preferential tax regime for taxation and (or) do not provide for the disclosure and provision of information when conducting financial transactions (offshore zones)» (updated October 2, 2014).

The List includes the following states and territories:

1. Anguilla;
2. Principality of Andorra;
3. Antigua and Barbuda;
4. Aruba;
5. Commonwealth of the Bahamas;
6. Kingdom of Bahrain;
7. Belize;
8. Bermuda;
9. Brunei Darussalam;
10. Republic of Vanuatu;
11. British Virgin Islands;
12. Gibraltar;
13. Grenada;
14. Commonwealth of Dominica;
(15). Has become invalid since January 1, 2013 (the Republic of Cyprus was excluded from the list of offshore zones by Order of the Ministry of Finance of Russia dated August 21, 2012 No. 115n);
16. People's Republic of China:

Macau Special Administrative Region (Maomen);

17. Union of Comoros:
the island of Anjouan;
18. Republic of Liberia;
19. Principality of Liechtenstein;
20. Republic of Mauritius;
21. Malaysia:
the island of Labuan;
22. Republic of Maldives;
(23). Repealed from January 1, 2015. (The Republic of Malta was excluded from the list of offshore zones by Order of the Ministry of Finance of Russia dated 02.10.2014 N 111n);
24. Republic of the Marshall Islands;
25. Principality of Monaco;
26. Montserrat;
27. Republic of Nauru;
28. Netherlands Antilles;
29. Republic of Niue;
30. United Arab Emirates;
31. Cayman Islands;
32. Cook Islands;
33. Turks and Caicos Islands;
34. Republic of Palau;
35. Republic of Panama;
36. Republic of Samoa;
37. Republic of San Marino;
38. Saint Vincent and the Grenadines;
39. Saint Kitts and Nevis;
40. Saint Lucia;
41. Separate administrative divisions of the United Kingdom of Great Britain and Northern Ireland:
Isle Of Man;

Channel Islands (Guernsey, Jersey, Alderney);
42. Republic of the Seychelles.

Firstly, this List is important when it comes to the possibility of applying a zero rate of income tax when receiving dividends by Russian organizations.

According to subparagraph 1 of paragraph 3 of Article 284 of the Tax Code of the Russian Federation, a tax rate is applied to income in the form of dividends 0 percent provided that the Russian organization receiving dividends owns for at least 365 days at least 50 percent of the shares in the authorized capital of the organization paying dividends.

In this case, if the organization paying dividends is foreign, the specified zero rate is applied to organizations whose country of permanent location not included in the list of offshore zones approved by the Ministry of Finance of the Russian Federation.

If the zero income tax rate is not applied, the income of Russian organizations in the form of dividends from foreign organizations is taxed at a rate of 13% (clause 2, clause 3, article 284 of the Tax Code of the Russian Federation).

Secondly, article 105.14 of the Tax Code of the Russian Federation equates to transactions between related parties(i.e. automatically classifies as “controlled transactions” for the purposes of Section V.1 of the Tax Code of the Russian Federation) transactions, one of the parties to which is a person whose place of registration, or place of residence, or place of tax residence is the state or territory included in the specified List offshore zones.

2. Another list of offshore zones is contained in Appendix 1 to the Instruction of the Bank of Russia dated August 7, 2003 No. 1317-U “On the Procedure for Establishing authorized banks correspondent relations with non-resident banks registered in states and territories that provide a preferential tax regime and (or) do not provide for the disclosure and provision of information when conducting financial transactions (offshore zones)”. However, it applies only in the field of banking regulation and applies only to banks.

The list of the Central Bank divides offshore zones into three groups, for which a different procedure for establishing Russian banks correspondent relations with banks of respective countries.

The first group is the most prestigious jurisdictions. These include: Channel Islands (Guernsey, Jersey, Sark), Isle of Man, Ireland, Malta, Hong Kong, Switzerland, Singapore, Montenegro, Liechtenstein.

The second group includes a large number of "classic" offshore companies, in particular Belize, the British Virgin Islands, the Bahamas, the Seychelles, as well as the United States (Delaware and Wyoming) and a number of others.

The third group is the least reliable (from the point of view of the Central Bank of the Russian Federation) offshore jurisdictions. These include Andorra, Anjouan, Aruba, Vanuatu, Liberia, Marshall Islands, Nauru.