Several countries around the world provide attractive conditions for starting offshore and onshore companies. The offshore company is typically incorporated in a jurisdiction that provides a preferential tax regime: the company will not be imposed with a set of taxes that are generally applicable to locally incorporated businesses.
Onshore companies do not enjoy a preferential tax regime and they also have to comply with more governmental regulations compared to offshore companies. However, one of the main differences between the two is related to the places in which they can sell their products or services. In the case of an offshore company, it can only sell its products or services outside the jurisdiction in which it is registered. In the case of an onshore company, its representatives can also address their products or services to the local consumer market.
An offshore company can be set up in Qatar, where investors can benefit from a favourable tax system and a highly developed infrastructure, which can accelerate the development of the company. An offshore company has the following key characteristics: a low level of taxes, a fast registration procedure, minimum requirements for setting up the company, low administrative costs and it can also be registered with full foreign ownership.
For example, an offshore company registered in the Cayman Islands, one of the most attractive jurisdictions for offshore businesses, benefits from very attractive conditions. The Cayman offshore company can be incorporated by a single shareholder; it needs to have one director (there are no restrictions concerning his or her residency) and it can be registered without share capital. Some of the tax exemptions applicable to an offshore company in the Cayman Islands refer to the following:
- the corporate income tax;
- the capital gains tax;
- the wealth tax;
- the personal income tax.
A Cayman Islands company can be registered in a period of 48 hours and the country does not provide any requirements concerning corporate audits. The offshore company benefits from numerous tax exemptions in other jurisdictions as well; for example, offshore companies in Singapore will not be imposed with the value added tax, the capital gains tax or the sales tax. However, in the case of this jurisdiction, an offshore company needs to appoint a director who has obtained his or her residency in this country.