An offshore is a company which is incorporated by a non-resident and has no business activity in the country where it has been registered. It means theoretically an offshore can be incorporated at any state, but usually offshore countries are those ones which offer very attractive taxation system for the offshore companies.
Opening an offshore company can bring many benefits to its founder. The main of them are:
An offshore is a legal and very effective way to avoid tax burden in the country of your residence. Non-resident companies get possibility to pay no taxes at all in most offshore zones or the tax rates can be very low.
An offshore is a good option for the propriety protection. The assets of your offshore company are not available for the state of your residence.
Most offshore jurisdictions give an opportunity to obtain a high level of anonymity while doing business with the offshore company.
An offshore zone is a state or a region which gives some special conditions for the formation of those companies which were registered within the country by the person, non-residential for this state.
It is forbidden to do the business inside the offshore zone for the companies which belong to it. An offshore country usually gets no income through the taxes, its profit mostly is the registration fees and various additional expenses such as business premises renting, electricity, transport, some social contributions, etc.
Opening offshore companies is mostly popular with the developing countries as it gives an opportunity to fill their budgets up with the fees for the offshore registration.
The offshore countries can be divided into several groups: those ones which provide no taxes and minimum state control for the offshore companies (Commonwealth of the Bahamas, Belize, Andorra, Cayman Islands, etc) and those ones where an offshore activity is more controllable by the state, but they are more prestigious at the international scene (Hong Kong, Dubai, etc).
Switzerland as an offshore jurisdiction
Officially Switzerland is not an offshore jurisdiction, but due to its taxation system it obtains the features of the offshore zone and becomes very attractive for the offshore companies’ formation.
Switzerland has agreements with more then 100 other states for the double taxation avoidance. Tax system in Switzerland is different for every canton, so it is possible to register a company at the canton which offers the lowest taxation. At the moment Schwyz and Zug are the most attractive cantons for the offshore company formation.