Dubai Offshore Company | Cash In On These 10 Uses
Dubai Offshore Company: Professional services, trading, investing, intellectual property, property is various uses
Dubai offshore company: The term offshore companies conjures up an image of shadowy entities conducting transactions in secrecy. Most tax havens try to live up to this image by instituting laws that give you confidentiality of ownership.
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Medium Net Worth Investors too can form offshore companies to fulfill our more mundane everyday needs.
Dubai offshore company: 10 Offshore company uses
1. Professional services
If you are a consultant, IT professional, engineer, designer, author or entertainer operating outside your resident country you can benefit significantly.
The offshore company can show you as a company employee. The fee you would have received is now billed by the offshore company and paid to it. This fee is received and saved tax-free. You can then take the payment you need to minimize your taxes.
As an importer or exporter, your offshore company may act as an agent for the transaction. The profits can be retained in your offshore company bank account.
You may use your offshore company to buy mutual funds, shares, bonds, property, jewelry, and precious metals.
This could be done through online stock brokers or through managed funds offered by your bank.
Depending on your wealth you may have multiple offshore companies, each one holding different asset classes.
To save on capital gains taxes, the offshore company shares may be sold instead of the asset itself.
4. Holding assets
Your offshore company can also be used to own and fund operating companies in different countries. They could also be joint venture partners or the ‘promoter’ of publicly quoted companies.
Mauritius is well suited as a country for investing companies because of its favorable double tax treaties with many countries including India.
5. Dot com businesses
The internet has made the cost of business entry very low and consequently the legal protection of the company’s assets, both physical and intellectual, that much easier.
If you have a Dotcom company you can now use this flexibility to develop different projects via individual offshore companies.
This will enable you to invite investors who may be interested in only a specific project rather than your entire business.
Both Mauritius and Seychelles have Protected Cell Company [PCC] structures available for just this kind of need.
6. Owning property
Buying a property in an offshore company will save you capital gain taxes and transfer charges. Provided you sell the company’s shares instead of the property itself.
However, this is subject to the rules applicable to property ownership and sale in your country.
Importantly, in some countries, e.g. Islamic ones, inheritance is via Shariah Law and not your will. So an offshore ownership will ensure that the assets owned outside the country need not be distributed according to Shariah Law.
7. Shipping & Leisure craft
Offshore companies were invented to own or charter ships. They can also own your pleasure craft.
Shipping companies accumulate profits in tax-free offshore jurisdictions and, if each ship is placed in a separate offshore company, it can obtain significant asset protection by isolating liabilities of each individual ship.
8. Employment entities
Multinational organizations may use offshore companies to employ expatriate staff who are deployed in different tax jurisdictions around the world.
To facilitate transfers, reduce the employee’s taxes and administer benefits easily an offshore company employment is preferred.
9. Intellectual property and royalty ownership
Offshore companies are seen as vehicles to own intellectual property and royalties received for software, technology rights, music, literature, patents, trademarks and copyrights, franchising, and brands. These companies are in the form of trusts or foundations.
10. Asset protection
It is estimated that a professional in the US can be expected to be sued every 3 years! And that more than 90% of the world’s lawsuits are filed in the US.
If you have an income or assets of more than US$ 100,000 outside your country you should seriously consider owning them through an offshore company structure.
Most offshore jurisdictions require that for a lawsuit, a lawyer must be hired and paid up front before a suit can be filed, thus keeping frivolous lawsuits away. Often a substantial bank bond has to be placed with the government, to even implement a lawsuit. It can also (take years of waiting) to get into court in some offshore jurisdictions.
If you have substantial liquid assets you should consider a Trust which would own the offshore company. This will provide a greater degree of protection, at the least expense.
However, we should remember that this structure is for asset protection, not for tax savings and so that focus should be maintained.
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