Going offshore can be scary, especially if you live in the US or the UK. You want relief from high taxes at home, and you check out offshore destinations with low or zero tax regimes. You may have also seen negative news reports about big corporations using tax havens to avoid paying taxes back home. You hesitate and ask: is it legal to go offshore? The answer is yes, if you do it properly.
It is perfectly legal to move your family outside of your home country and set up a business to take advantage of tax and business benefits offered by offshore jurisdictions. You have the right to enhance the value of your property and the right to improve its protection, if you play by the rules of that jurisdiction and abide by its laws. Each jurisdiction has different rules and laws, so do your research!
Going offshore can give you access to investment and business opportunities that may not be available in your home country. In a global economy, international investments allow you to diversify and reduce your portfolio risk. Some business owners and entrepreneurs set up a physical presence offshore which helps them grow their businesses internationally.
There are plenty of good reasons to go offshore:
- Tax benefits
- Protection from fluctuating currencies
- Stability against problems in home countries
- Operating an active business
- An improved lifestyle
An offshore company can be set up as a subsidiary for your business back home, such as a Canadian mother company setting up a subsidiary in the Cayman Islands, to take advantage of a Tax Information Exchange Agreement between Canada and the Cayman Islands, that provides some benefits to Canadian companies. Or you can launch a totally new company to reach global markets from an offshore destination. Cayman Enterprise City, a special economic zone in the Cayman Islands, allows you to easily incorporate and set up a physical presence with offices and staff.
It's legal to open an offshore bank account even if you still live at home, but there are reporting requirements that you must adhere to. Americans need to stay compliant with U.S. reporting laws, so if you are a US citizen, know what the rules are. The Internal Revenue Service (IRS) also requires Americans to report interest in all their foreign companies, and they need to file a tax statement for each company's profits.
Going offshore can be easy, but make sure you get the right tax advice from an expert in your home country first, to understand your obligations to your home country.