Company

The Advantages of Companies

Tax Planning

An Offshore Company has the advantage of altering the situs of assets. For example a non-resident owning a property in the UK may pay inheritance tax on the value of the property upon their death. However by simply placing the property in an offshore holding company the assets becomes situs in the offshore location and Inheritance Tax could be avoided.

Management of Probate

By placing assets in an offshore company lengthy and costly probate could be avoided in the jurisdictions where the individual assets are located. Upon the death of a beneficial owner the shares in the company pass to their heirs and not the individual assets.

If the shares of the company were placed into a trust probate could be avoided altogether. The settlors would have freedom to choose their heirs, when and in what proportions or circumstances they may wish. This may not be possible by a will.

Commercial Status

A company may be considered over and above a trust as it creates a commercial entity to own an asset. This is particularly important when raising finance.

Confidentiality

An offshore company has a degree of confidentiality as in certain jurisdictions there is no public record of the ownership.

Sales by Share Transfer

The sale of property may be simplified if the shares in an offshore company were sold rather than the property itself. This may lead to substantial savings on capital taxes.
 

Holding Copyright, Licensing and Patents

There may be advantages in the holding of Copyright, Licensing and patents through an offshore company. This may allow royalties to be collected free of withholding taxes from certain jurisdictions.

Where withholding tax is deducted it may be possible to mitigate this by creating a holding structure to take advantage of double taxation agreements. Capital taxes may also be avoided on the sale of the assets.