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Understanding Offshore Companies

An offshore company is incorporated or registered outside the country where its investors live or where its main operations are located. Offshore companies are often registered in countries with extremely favorable tax rates like zero tax, and they do not pay corporate taxes in their home jurisdiction. Information about offshore companies is often difficult to obtain as they do not disclose details about their structure, activities, and operations publicly.

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mohak vilecha
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22 views1 page

Understanding Offshore Companies

An offshore company is incorporated or registered outside the country where its investors live or where its main operations are located. Offshore companies are often registered in countries with extremely favorable tax rates like zero tax, and they do not pay corporate taxes in their home jurisdiction. Information about offshore companies is often difficult to obtain as they do not disclose details about their structure, activities, and operations publicly.

Uploaded by

mohak vilecha
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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What do you mean by offshore companies???

Thank you Devansh for providing some useful insight into the case. So as the heading of this
Slide suggests…. I will try my best to answer the question What is meant by Offshore
companies????

Basically, an offshore company is one that is incorporated or registered in another country,


i.e., outside where its principle investors live. It is also an offshore company if it is registered
outside where its main operations and offices are. For example “An offshore company filed
in the Caribbean island of Nevis can hold a bank account in that country, but it cannot operate
a business within the country.”
An offshore corporation might engage in offshoring business services or manufacturing.
Countries, territories, or parts of a country that offer extremely favourable tax rates. In fact,
some of them have zero tax rates are usually where these Offshore companies are nurtured.
There are also some advanced economies having large markets and significantly lower
corporate tax rates than their competitors. In the United Kingdom, for example, corporate tax
is only 21%, compared to 38% in the United States.
These companies do not pay corporate taxes in their home jurisdiction.
Also, it is difficult to get information about them. Information regarding the company’s set
up, structure, activities, and behaviour is not available to the public.
In the Cayman Islands, for example, there is virtually no information available to the public.
However, in Hong Kong and Singapore, law enforcement authorities have access to much
more data.
According to various press sources, people use them to launder money, evade taxes, and
commit fraud and white-collar crime. White collar refers to a type of job in which the worker
does non-manual work, i.e., office work. Because of this questions arise on their existence.
I now pass on the baton to Alisha.

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