Company Formation Questions and Answers by the Experts

Legally speaking, an offshore company is nothing else than a company. Is it legal to set up a company? Absolutely. It is what you use the company for that determines its legal status.

Presently, millions of offshore companies are being used across the globe in total legality. Be it to own property, act as a holding vehicle, conduct business, own trademarks , trade...all these activities are done within a legal and tax framework that is known and established by authorities.

When does it become a problem ? Upon using a company with criminal intentions such as but not limited to : evading taxes, launder money, trading without proper license for an activity that requires one, bribery, human trafficking etc

And this is precisely what has brought bad publicity to the industry over recent years. Some isolated cases have impacted anyone owning or having the intention to own an offshore company.

While SFM onboards numerous clients every year, we conduct strict due diligence and Know Your Client processes and are sometimes forced to refuse or report clients that we know, or have strong suspicions, conduct criminal activities.

To learn more about our compliance standards, please click on this link and refer to the articles 5 to 7 of our T&C’s

Offshore or non-resident companies are described as companies that conduct an insubstantial or zero volume of business within their jurisdiction of incorporation.

More specifically, offshore companies have three characteristics: Firstly, they should be registered as an entity within the jurisdiction of incorporation. Secondly, the "incorporators" should be domiciled outside of the jurisdiction of incorporation. Finally, the company should transact exclusively outside of the jurisdiction of incorporation. However, most associate the term 'offshore company' as a means of increasing tax efficiency. Click here to learn how you can set up a company through the SFM website.

What is an offshore company? (41 sec)

SFM has more than 15+ years of experience in company formation and our seasoned experts have a network of offshore service providers that remains unparalleled. This Enables us to offer you competitive prices on over 48 jurisdictions globally. Our company goes above and beyond to provide you the best service with dedicated account managers and expert advice. Each client receives a tailor-made service, aligned with the latest jurisdiction laws. In addition, we also provide addition services such as bank account opening and accounting services.

SFM is a member of many internationally recognized organizations such as The International Fiscal Association (IFA) and The International Tax Planning Association (ITPA). Find a full list of our associations here making us one of the most recognized company formation providers globally.

To speak to one of our experts contact us or to find out more about SFM please read the “About us” section.

We often get the question, “where should I register my company?” or what is the “best offshore country to open my company?”.

Our answer is simple: every client, every situation is unique, there is therefore no straight answer to that question.
A lot of factors have to be taken into consideration, namely :

• Your company activity
• Your place of residence
• Where your clients and providers are located
• Your affinity with certain regions of the globe
• The kind of banking facilities that you need

All these factors have an influence on which jurisdiction you should opt for. The SFM team will gladly review the options available to you to assist you in deciding which jurisdiction would fit you best.

Also, an important factor in choosing a jurisdiction is to be sure that your company will be incorporated in a country that has a:

• 1. reliable means of communication;
• 2. political and economical stability;
• 3. good reputation;
• 4. sophisticated corporate laws;

All the jurisdictions we work with enjoy the above-mentioned advantages.

Disclaimer : SFM Corporate Services and its affiliates do not provide tax, legal, or accounting advice. Materials provided by SFM Corporate Services and www.sfm.com have been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, or accounting advisor with regard to your own tax, legal, or accounting scenario.

Please contact us for further information.

SFM offers multiple payment options to suit your individual needs. Bank transfer, Credit/ Debit card, Cheque or Bankers Draft and Cash (at our offices) are all accepted.

Many jurisdictions do not require financial reporting or auditing.
Learn all about our accounting and auditing services with company set up here.
However, in certain jurisdictions, such as Hong Kong, Cyprus, Gibraltar and the UK for example, it is indeed mandatory for companies to produce yearly accounts and to have them audited, and in some cases, to pay taxes (please refer to our jurisdiction comparison table).
While a company may not be subject to tax reporting to its local authorities, you should consult your own tax, legal or accounting advisor to determine whether you or your company have any reporting obligations in other jurisdictions, including the jurisdiction in which you are a tax resident.
NB: it is possible that under FATCA or CRS regimes, most of the offshore jurisdictions may report information about their offshore companies (and the company’s bank accounts) to the relevant home country tax authorities.

No. You are welcome to meet us in any of our offices, but that does not mean that you will have to travel there to open your offshore company. Everything can be finalised by correspondence.

Every jurisdiction has its own incorporation timeframe. Please refer to our jurisdiction comparison table. Once the company has been incorporated, it will generally take about two to six days for the corporate documents to become available.

Yes, It is even recommended that you do so. On the application form you are asked to input two company names, in order of your preference. We will then check with the Company Registry of the offshore jurisdiction if those names are available for incorporation. If not, we shall send you some alternative names. We also have a list of shelf companies or pre-approved names that we can send to you upon request.
While you are encouraged to choose the name of your future company, please note that some words are forbidden:

• Names that are too similar to existing well-known brands are likely to be refused by local registrar : example Coca-Cola Limited or Google Limited
• Names that include any prohibited word, phrase or abbreviation such as Bank, Credit Union, , Municipal, Parliament, Building Society, Chamber of Commerce, Registrar, Chartered, Police, Royal, or any word or abbreviation conveying a similar meaning .
• Names that include any activity that would require a specific license, such as but not limited to : Casino, College, Foundation, Fund, Gambling, Hospital, Insurance, Airline, Bitcoin.

Generally speaking we require your passport copy as well as your proof of address such as a utility bill to register your company. A certified true copy may be performed by a notary, a practicing attorney-at-law, a public administration or a banker.

The certification must be recent, and the proof of address must be less than 3 months old; the certification must confirm that the copy is a true copy of the original document.

Additionally, the certifier must indicate his name, capacity, date of the certification along with his/her signature next to their official seal. Some jurisdictions have specific requirements and we recommend seeking additional information and instructions from SFM and to submit scan copies for prior review.

The company registration address is the legal address of the company in the jurisdiction where it will be registered. This address must be used for all company legal documents including contracts, invoices, and others for the purpose of identifying the company correctly.it is also used for the service of legal notice by third parties.

Some jurisdictions may restrict a company’s activities to business performed outside of the jurisdiction itself (Ex: Ras Al Khaimah offshore companies). In that case, the company’s registration address cannot be used as a commercial address else it would appear as if the company was trading from inside the jurisdiction.

In other cases, some jurisdictions may demand that companies appearing to trade from within their territory now meet “substance” requirements in order to be deemed a resident company, which may include having local staff among other.

Finally, it is not possible to use the registration address as your correspondence address because handling your company’s correspondence is not in the scope of service of a registered agent, unless. You can however request one of our virtual office services in Geneva or London to obtain a correspondence address.

Off the shelf companies are corporate entities that have been established by a provider, who holds the company until a purchaser is found. Post transaction, the ownership of the company transfers from the provider to the third party, who then commences trading activity under the company name. The benefits of purchasing an off the shelf company include:

• Reduction in the time it would take to create a new corporation.
• The appearance of corporate longevity.

Note: Shelf companies are usually more expensive than newly incorporated companies because of their age.

Click here to learn more about how SFM can provide you with a shelf company and a bank account

The shareholder is the person who owns the company through a share certificate. A company can be owned by one or several shareholders. The shareholder can be an individual or a company.

The director is the person responsible for the management of the company. He will sign any business contracts, account opening forms etc. Directors are elected by the shareholders. A company can have one or several directors. The director can be an individual or a company. Find out about out professional director and shareholder services here.

Yes. In most jurisdictions it is possible (and common) that the same person acts as shareholder and director of the company.

Most of the jurisdictions we work with do not impose taxes on profits made or interest earned by the company. Some, like Hong Kong, only tax profits made within the jurisdiction, whereas Cyprus charges a 10% flat tax. While a company may not be subject to tax reporting to its local authorities, you should consult with your own tax, legal or accounting advisor to determine whether you or the company are subject to tax in any other jurisdiction including the jurisdiction in which you are a tax resident.

An offshore company may be of interest to a great number of people and it may be used for various activities:

• Businessmen:
  Creating an offshore company allows businessmen to begin an activity without having to deal with the set-up of a complicated infrastructure. An offshore company allows you to quickly create a stable structure with a simple administration and enjoy all the benefits of the offshore jurisdiction.
• Commerce over the Internet (E-Commerce) :
  Internet traders can use an offshore company to maintain a domain name and to manage Internet sites. An offshore company might be ideal for people whose business is on the Internet. You might choose to incorporate the registered office of your company in an offshore jurisdiction to take advantage of the various benefits offered by these jurisdictions.
• Consultants / Counsellors:
  You can also carry on your consultancy or counselling business through an offshore company. You will find it easier to manage your company, while being registered in a stable jurisdiction and benefiting from all the strengths of this jurisdiction.
• International business:
  International commerce can be carried out through an offshore company. It will handle purchases and sales operations. SFM can also arrange for obtaining a VAT number for companies that we register in Cyprus or in the United Kingdom.
• Holding intellectual property rights:
  Any kind of intellectual property right (a patent or trade mark) may be registered in the name of an offshore company. The company may also buy or sell this type of right. It may also grant rights of use to third parties against payments.
• For the custody of movable and immovable property:
  Offshore companies are used to hold both movable property (such as yachts) and immovable property (such as houses and buildings). In addition to confidentiality, the benefits and advantages they offer include exemption from certain types of taxes (e.g. inheritance tax). It should be noted, however, that some countries do not allow the acquisition of movable/immovable property through offshore structures and therefore those wishing to form an offshore structure are advised to check with a competent authority before proceeding.
• For inheritance purposes:
  An offshore firm that always stays afloat (provided all costs associated with running it are paid) may, in some countries, be used in relation to inheritance tax laws. With a view to optimising inheritance tax liability, the offshore structure may also be combined with a trust or a foundation.
• Stockbroker/forex:
  Very often offshore companies are used for stockbroker/forex share or foreign exchange transactions. The transactions may for instance be performed with an account opened under a company name.

SFM Corporate Services and its affiliates do not provide tax, legal, or accounting advice. Materials provided by SFM Corporate Services and www.sfm.com have been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, or accounting advisor with regard to your own tax, legal, or accounting scenario.

Please refer to our legal suffixes table.

In the event where SFM is not able to register your company then your order will be subject to a refund as per our terms and conditions. Please find our refund policy

We at SFM are acting as your corporate service provider and we provide assistance with the company registration as well as bank account opening.

During the process of registration of the company, we depend on the authority approval and also the client cooperation to obtain the required documents. When such documents are provided on time, we will be able to efficiently handle the procedures. SFM has successfully registered companies internationally in more than 20 jurisdictions.

SFM is dealing with several banks internationally and once you become one of our clients, we shall start to create your banking profile, so as to introduce you to the right bank which suits your banking needs and to increase your chances to open your company bank account, but the choice of a bank is ultimately yours. In the event that the bank will reject your application, our team will be glad to re-assess your profile and may assist you with a new application after reviewing the reasons of rejection and initiating the process with another bank.

Kindly note that a company does not provide the eligibility to apply or to obtain the residency in the country where the company is registered.

We provide the assistance with the residency in the UAE through the registration of a Local / Free Zone company and for more details kindly refer to the following website https://www.dubaicompany.com/ and you may contact us for more details.