Offshore Holding Company

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Are you someone envisioning controlling multiple subsidiaries? An offshore company formation with a holding structure is the most viable option. Of late it has become the absolute favorites for corporations and businesses aiming for global wealth management and tax optimization.

What is an Offshore Holding Company?

An offshore holding company is a company type that is registered in tax havens to enjoy full proof asset protection and relaxed local laws.  It is also known as a  parent company  since it owns  and controls multiple businesses. Rather than involving in typical day-to-day business operations, they are designed for centralized assets management, holding financial instruments and leverage acquired passive income. Apart from being the guardian corporation they also have the competitive advantage of operating in an offshore jurisdiction. Hence this amalgamation of an offshore  holding company formation has been sought after by business enthusiasts and expats worldwide.

Who are the main beneficiaries?

1. Investors

Purpose: For tapping into diverse investments and enhancing their portfolios.

2. Multinational companies

Purpose: For holding global investments, trademarks and IPs.

3. Rich Individuals and families

Purpose: To manage their wealth, succession planning and for effective asset protection.

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Benefits of an Offshore holding company

These companies are globally pursued for their numerous benefits. Some of the key benefits are as follows:

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Reduced liability
Since the holding company does not directly deal with the financial activities their ownership is protected from legal extremities. Moreover, the offshore jurisdictions have favorable laws that support asset segregation and minimal litigation.
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Centralized ownership
Your company can have centralized control over subsidiaries and investments.  They act as the central authority  that commands over other companies and various assets such as corporate gains, intellectual property (IP), royalties, dividends, stocks and much more. 
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Better succession Planning
Opening an offshore holding company gives you a competitive advantage for faster wealth transfer and better asset distribution. 
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Diversification of investments
They are known to offer risk mitigation by diversifying capital in multiple businesses across the offshore jurisdictions. This strategic move also opens a new horizon for global investments, which may not be possible within the domestic borders.
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Favorable tax rates
Offshore holding company formation offers low or neutral tax rates on corporate gains and dividend incomes, facilitating long term fund optimisation and segregation of assets on other business operations. 
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Take the first step in safeguarding your assets with offshore company formation.
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Registration Process

Procedures for setting up an Offshore holding company

Starting a holding company can be flawless if the right steps are followed. Below are the necessary steps that needs to be followed for an effective start:

Step 1: Clear your doubts on this “company type”

Don’t get confused with the terms offshore and holding company. They are just big corporations having multiple businesses under them across foreign locations! During the planning process, make sure to be crystal clear about the following questions:

What is an offshore jurisdiction?

Do I know enough about holding companies?

Do the features of this company type fulfill your end goals?

Step 2: Decide an appropriate jurisdiction

The next step is to choose the best offshore jurisdiction for a holding company, ticking all the required criterias. The top 5 locations worth mentioning are:

  • The Cayman Islands
  • The British Virgin Islands (BVI)
  • Seychelle
  • The Cook Islands

Step 3: Select the right legal structure

Decide whether you want to incorporate as an IBC, LLC or operate as trust bodies. This will leverage the formation process with lesser legal entanglements.

Step 4: Choose a company name

Come up with a business name that supports your purpose and complies with the legal norms of the selected offshore location.

Step 5: Be handy with the documents

Be handy with the documents.

Make sure you have all the required documents ready for initiating the incorporation process. They are documents containing  personal and corporate information which  needs to submitted to the concerned offshore authority:

  • Passport copies 
  • Address proof
  • Details of directors and shareholders
  • MoA and AoA (if required)
  • Details of the business activity (if necessary)

Step 6: Secure Certificate of Incorporation

After submission of the legal documents, you will receive a Certificate of Incorporation. This ensures that your holding company is successfully registered and is set for business operations.

Step 7: Open a corporate bank account

After company formation the next step is to open a company bank account for obtaining dividends and multiple investment returns.

Step 8: Get in touch with a company setup expert

The final step is to get help from offshore holding experts who can perform the pre and post incorporation activities and deal with regulatory authorities.

Legal considerations

The quest for holding a company does not end with mere selection of a tax relaxing jurisdiction. The regulatory bodies have amended stricter rules to combat potential risks that tag along with fraudulent business operations. Some of the notable legal requisites are as follows:

Legal frameworks Important requisites
Economic Substance Act
  • Applies to companies conducting “relevant activities”
  • Proper evidence of business operations
  • A registered local agent
  • No tax evasion
  • Physical office space and working staff
Financial Action Task Force (FATF)
  • Avoid illegal financing and money laundering
  • Follow the 40 recommendations diligently
Environmental, Social and Governance (ESG)
  • Combine sustainability with operations
  • Maintain labor rights and be socially responsible
Common Reporting Standards (CRS)
  • Maintain financial transparency
  • Exchange accurate financial information with institutions

Top 5 jurisdictions for Offshore Holding Company setup

Selecting the right location for your company involves considering various factors such as low tax rates, full asset control and long term business support. The key is to select a jurisdiction that best supports your holding company objectives. Below are the best jurisdictions for holding companies:

Country Notable features Best for
Cayman Islands
  • Tax-free environment
  • Robust regulatory framework
  • Multinational firms
  • Holding assets
British Virgin Islands (BVI)
  • Supportive corporate laws
  • No bearer shares
  • Global trade
  • Owning IPs
Hong Kong
  • Doorway to global market
  • Advanced banking services
  • Investors
  • Giant corporations
  • Traders
Seychelles
  • Easy business setup
  • Relaxed business laws
  • Entrepreneurs
  • Global traders
Belize
  • Easy compliance rules
  • Tax efficient
  • Pure equity holding companies
  • Wealthy individuals

Starting a holding company can be a strategic move for businesses and investors aiming for cross borders assets and subsidiaries control. The main crux lies in selecting a jurisdiction that supports your business goals and being compliant with both the domestic and offshore regulatory frameworks. Our team at SCR specializes in company formation and are well recognised for credible services. Contact us today to build your own offshore holding company!

Frequently asked questions

Are offshore holding companies legal?
How long does it take to start an offshore holding company?
What are the different types of holding companies?
Can an offshore holding company be owned by a single individual?
What is the estimated cost for starting an offshore holding company?
Disclaimer:

SCR and its affiliated entities are independent management consulting firms that provide professional guidance and support services related to company formation and allied activities in Seychelles. Please note that we are not a government body, regulatory authority, or official registrar. All company-related licenses, registrations, and compliance documents are issued solely by the relevant government authorities. SCR and its representatives facilitate the process of company formation and related services but do not issue any official documentation.

While we make every effort to provide accurate, up-to-date, and reliable information, we do not guarantee the accuracy, completeness, or timeliness of any information or service provided. Clients are fully responsible for their business decisions and are strongly advised to seek independent legal, financial, or tax advice where appropriate. SCR shall not be held liable for any loss, damage, or inconvenience arising from the use of our services or reliance on the information provided. Use of our services constitutes acceptance of these terms.