Where are the best places to start an offshore company in the south and north Americas?
By: Sibin Sebastian
Tags: Startup, America, Investment, Offshore Company, Banking

The Americas are home to one of the most attractive international and offshore company sectors due to their low offshore/tax jurisdictions, especially in the Caribbean. However, this was not always the case as countries in the Americas had different approaches towards setting up companies for both non-residents and residents.

For example, non-residents would set up their companies using the International Business Company (IBC) laws that offered cots and tax advantages compared to ‘onshore’ incorporation. They would offer zero local taxes, extra privacy, and minimum compliance requirements. However, pressure from EU and OECD offshore jurisdictions led the Americas to amend their offshore tax regimes in certain ways that only allows non-residents to benefit from the tax exemptions.

Here are some of the best places to incorporate an offshore company in the south Americas

Panama

Panama is the best place in the world to incorporate an offshore company as it comes with excellent economic growth and one of the most stable political regions in the Americas, making it the ideal destination for foreign investors. The country is located north of South America and depends on one of the most used interoceanic waterway across the globe: the Panama Canal.

Panama has been facilitating the incorporation and protection of offshore companies since 1932 and allows their management from anywhere across the world. Offshore companies incorporated in Panama get access to tax-exempt earnings as long as they are obtained outside Panama. Additionally, offshore companies incorporated in Panama do not need to present balances and income tax returns.

Incorporating an offshore company in Panama is quite easy as there are a number of firms that will help you set up an offshore company and have it operational in no time.

Belize

Belize is located in Central America and borders the Caribbean Sea and Mexico. Belize is less popular but with a rich culture and biodiversity that offers favorable tax conditions, making it an interesting destination to incorporate an offshore company

Any International Business Company (IBC) set up in Belize gets to enjoy the 1990 zero-tax legislation and subsequent amendments of 2000. Under this legislation, offshore companies are exempt from tax duties on dividends, income of the IBC, and stamp duties. Additionally, any Belize IBC gets to enjoy zero tax on all expenses such as compensation, royalties, rent, interests, and other key expenses.

Cayman Islands

For a long time, the Cayman Islands have been the go-to jurisdiction for captive reinsurance companies and offshore investment funds. Compared to other offshore destinations that come with a two-sided tax approach, the Cayman Islands do not tax both residents and non-residents. The Cayman Islands come with a large and solid financial sector controlled by its Cayman Islands Monetary Authority (CIMA), which is recognized globally for meeting international standards, effectiveness, and transparency against terrorist financing and money laundering.

The Cayman Islands also offer different structuring formats for offshore companies such as foundation companies, STAR Trusts, trusts, limited liability partnerships, pass-through limited liability companies, or through companies limited by guarantee or shares. The Cayman Islands also introduced a special economic zone known as The Cayman Enterprise City (CEC), which allows qualifying Cayman Companies, especially those in the science, technology, and media industries, to operate with tax resident entities with zero tax implications. Additionally, this special economic zone also offers CEC-incorporated company officials a 5-year renewable residency or work visas in the Caymans. This allows an entity to be managed and controlled from the Caymans.

The United States

The US offers investors a chance to incorporate Limited Liability Companies (LLC) to access the various USD merchant processing options available in the country. It is important that internet and e-commerce businesses obtain card processing and payment options that are quite reliable such as top USD payment aggregators in the US. But these will require a US company and a subsequent US bank account.

In the US, the LLC incorporation structure treats companies as partnerships for purposes of tax. For example, an LLC can benefit from a variety of USD payment processing options and a US business reputation without any additional tax liability if its group structure is set up properly in terms of transfer pricing and other legal agreements in addition to there being no intervention from the US effectively connected income (ECI).

Nevis

Nevis offers the best offshore destination for purposes of asset protection. Incorporating an offshore company in the form of an LLC in Nevis offers you the most protective investment vehicles available globally. If your business holds a great deal of assets or involves some level of liability, it would be wise to incorporate it in a region where the claimant will have to hire a local lawyer and post a cash bond with the Nevis Courts before he or she can bring a suit to you.

In Nevis, clients have to pay for legal services in full as attorneys are not allowed to work on contingency. Additionally, a Nevis LLC benefits from charging order protection and the fact that a court order cannot be used to confiscate the membership interests of a Nevis LLC.

The asset protection features, potential pass-through status, and simple legal structure make Nevis the ideal jurisdiction to incorporate a company for holding and protecting assets or one that has a higher degree of liability.

British Virgin Islands

The British Virgin Islands offer one of the most compliant and stable offshore company jurisdiction across the globe. BVI companies are tax exempt and face nil reporting requirements. While companies are required to maintain accounting records, they do not have to file them with any authorities. However, these records have to be stored at a specified office and not necessarily the registered head office.

Additionally, incorporating an offshore company through the BVI International Business Company (IBC) might be ideal if the business has some form of public exposure and you are looking to set it up in a tax-neutral jurisdiction.

Verdict

The North and South Americas offers a number of offshore jurisdictions that are ideal to incorporate a business in. However, each of these jurisdictions comes with different benefits that will be suitable for different types of businesses and it would be important you do your due diligence before settling for a specific offshore jurisdiction.