Why Use an Offshore Company for Your Finances?


by Julianne Mercer, Negosentro.com |

If you pay attention to the news, you have no doubt heard about major companies using offshore tax havens to reduce their tax burdens and keep more of their hard-earned profits. Many people wrongly imagine that this only a technique for the wealthiest companies and individuals, and that it isn’t an option for “normal” people.

But the truth is that overseas companies can be extremely valuable for normal people, too. Not only are they great for reducing your tax load, they also help you limit your liability in financial lawsuits and allow you to create special financial arrangements that protect your money for future generations.

Tax Benefits of Overseas Companies

When you manage your own finances via an overseas company, then you are only liable to pay the taxes levied by the country in which that company resides. You may also be charged certain domestic taxes, but those will be greatly reduced compared to what you would pay under normal circumstances. By creating an offshore company Gibraltar, for example, you can greatly reduce your overall tax bill.

When you create such a company, you will want to retain a skilled lawyer with experience setting up such companies. They will advise you on how much you can save via the company, and make sure that the arrangement is still in compliance with all applicable laws and regulations.

Reduced Legal Liability

Another great benefit of handling your personal finances through an offshore company is that you are less vulnerable to lawsuits in your primary country of residence. The exact kind of lawsuits that can be filed against you will be limited by the laws of the overseas country you choose, but many have laws that protect your assets and privacy from invasive lawsuits.

If you are interested in setting up an overseas company for this reason, you should meet with an attorney who specializes in overseas legal matters. Explain to him your concerns about liability, and he will be able to advise you on the best countries and company formations to protect you and your finances.

Protecting Your Inheritance

When you operate an overseas company, the assets it controls (and which you own through it) are governed by different laws and regulations than if you were conducting all of your financial affairs domestically. And one of the important differences that many people seek is in how foreign countries treat the estates (including companies) of deceased individuals. If you are setting up your estate in a way that offers maximum benefit to future generations, then you can create an overseas company that will help them limit their exposure to estate taxes, death taxes, and other government penalties on large inheritances. If you have worked your entire life to leave behind a substantial inheritance, the difference between local laws and overseas laws with regards to inheritance can save your heirs hundreds of thousands or even millions of dollars. In that way, setting up a foreign company to handle your finances may be one of the greatest gifts you ever give them.