There is no doubt there is a wide variety of jurisdictions to choose from – a brass plate gleaming under the palm-fringed island sun in most cases. However, there are 3 concerns of many of these offshore schemes:
1. As business addresses, they do not sound credible.
A business in BVI, Panama, or Macau is clearly offshore and doesn’t sound very credible. When location is determined by tax-haven status alone, then the business lacks credibility. These are not natural locations for an international business.
2. They lack safety
One of the reasons they lack credibility is that it is difficult to deliver physical business from these places. In addition, it is often difficult to secure a business bank account with a highly secure bank. Using a bank with a weak balance sheet and a poor trading name, or with poor functionality is not a recommended way to launch your business.
With a minor unfamiliar bank, assets become less secure in times of crisis. Furthermore, those banks themselves often have higher commission structures and are not very dynamic, using out-dated technology giving you a poorer user experience.
3. The associated bookkeeping, legal and audit costs are usually high
Using an offshore scheme, you may be at the mercy of whichever bookkeeper, lawyer, auditor has been suggested to you at the formation stage. You will need to be careful that these do not come at a premium cost because of the tax saving they hope to achieve for you.
If you read, 8 key considerations before establishing your company, you will be aware of what to watch out for.
The good news for you is that at Hubconsult, we have designed the Smart Company solution with these considerations in mind: we have all 8 of these covered. You use a company already established, Hubconsult. We take care of the running of the company, bookkeeping, auditing, returns. The accounting is powered by Xero.com and allows you access to your own management accounts. We bank with HSBC. And you’ll have no Corporate Tax and VAT to worry about.
Strict regulation. Great for business. Your assets safe. Dynamic business location. Very much onshore – at the heart of the Asian market in Hong Kong, and it costs you less than you spend on coffee!