Company Formation Services

CLD Corporate Services Ltd. has been successfully providing international corporate services since 1999. Our main offices are located in Panama, a prime jurisdiction that has been offering for more than 85 years Legal Services to the Financial and Legal Industries.

 

Below we provide our clientele with a few of the most popular jurisdictions we offer:

Central, North, South America and the Caribbean

Bahamas

Bahamas

Located off the south coast of Miami, the islands of the Bahamas have been a prime location for the formation of offshore companies. Since the passing of the International Business Companies (IBC) Act in 1990, thousands of Bahamas IBC’s have been created to help manage and protect assets. A Bahamas IBC enables the principal/individual to transact business globally. In addition to this key benefit, forming a Bahamas Company Offshore means complete freedom from tax. Incorporating in the Bahamas means that the corporation, the owner and the shareholders are exempt from all Bahamian taxes and exchange controls for an incredible 20 years from incorporation.

The Bahamas is a stable developing country, dependent on an economy based on tourism and banking. Tourism alone accounts for more than 60 percent of GDP and directly or indirectly employs half the workforce of the archipelago.

The European Union has confirmed that the Bahamas has not been included in the updated list of non-cooperative jurisdictions for fiscal purposes (known as the EU blacklist), which was published on March 12, 2019.

In the Bahamas, the necessary structural changes that were required were presented, which can be considered a milestone in its fiscal transparency regime, sending a message to the international business community that the Bahamas is a place for legitimate business.

Key features.

  • One director required, who may be a natural person or another legal entity of any nationality or jurisdiction. 
  • One shareholder required, who may be a natural person or another legal entity of any nationality or jurisdiction;
  • Bearer shares are not allowed;
  • A registered agent is required;
  • No Secretary required;
  • A Bahamian IBC is not liable to taxation in the Bahamas;
  • No minimum requirement for the share capital;
  • Accounting is required to be kept (anywhere in the world);
  • Subject to Economic Substance test;
  • Details of public knowledge: name of registered agent and registered address, name and address of the director;
  • Non-payment of the government fees would cause the company to be struck off and automatically dissolved.

RECENT AMENDMENTS:

The Law on Commercial Entities (Substance Requirement) entered into force on December 31, 2018. This law requires that certain legal entities that carry out relevant activities demonstrate an adequate economic substance in said jurisdiction.

The relevant activities are:

  1. Banking business
  2. Insurance business
  3. Fund management business
  4. Leasing and financial businesses
  5. Company headquarters
  6. Shipping business
  7. Distribution and service center
  8. Intellectual property
  9. Any holding company that performs or where one or more of its subsidiaries is involved in one of the activities listed in items 1 through 8.

A company that performs a relevant activity is called an “entity included” and is required to demonstrate that it maintains an economic substance in the Bahamas.

Entities Not Included under the Economic Substance regulations.

An entity not included is one that:

  1. Is a tax resident in another jurisdiction and is administered outside the Bahamas, even if he performs a relevant activity;
  2. Does not participate in a relevant activity in itself or through any of its subsidiaries;
  3. It is owned by residents and is managed centrally in the Bahamas, even if it performs a relevant activity.
Barbados

Barbados

Barbados is an island country located in the Lesser Antilles near the Caribbean Sea in the North Atlantic Ocean. With only an estimated population of 290,000 people, Barbados is a former colony of the United Kingdom (UK) and gained independence in 1966. Currently, it is a member of the British Commonwealth.

Barbados is the most developed and richest country in the Eastern Caribbean region with its highest per capita income. Its economic success derives from its strong tourism and financial services industry that attracts investors from around the world.

As a result of the changes in the legislation of the offshore sector within the framework of the OECD requirements to comply with BEPS initiatives, we will no longer talk about International Business Company in Barbados, only domestic or regular companies are offered.

  • A director is required, who can be a natural person or other legal entity of any nationality or jurisdiction.
  • A shareholder is required, who can be a natural person or other legal entity of any nationality or jurisdiction;
  • Bearer shares are not allowed;
  • A registered agent is required;
  • A company secretary is required who must be licensed and can be an individual or a company;
  • A company in Barbados taxes between 1% and 5.5% (previously 25%);
  • There is no minimum requirement for share capital;
  • Accounting is required (anywhere in the world);
  • Subject to proof of Economic Substance;
  • Public knowledge details: name of the registered agent and registered address, name and address of the director, name and address of the shareholder (s);
  • Companies may request a foreign currency permit, provided they declare that 100% of their income is in foreign currency
  • They can provide services locally and internationally
  • Can open accounts in Barbados in multi-currency
  • No tax payable on dividends received by a resident company of Barbados from a non-resident company where:
    • The resident company of Barbados owns> 10% of the capital of the non-resident company; and
    • The investment is not maintained as a portfolio investment.
  • Dividends paid from income of foreign origin to a non-resident shareholder are exempt from withholding taxes.
  • There is no capital gains tax.
  • There is no property transfer tax or stamp duty on the sale of shares to a person residing outside of Barbados, whether the transferor is a resident of Barbados, where the assets of the company in question consist of foreign assets and their assets. Revenue is obtained only from sources outside of Barbados.
  • Access to most of the network of treaties to avoid double taxation of Barbados.
  • There are no capitalization rules.

 

Belize

Belize

Belize is a stable and peaceful democracy in the heart of Central America. It is well- regulated, yet user-friendly jurisdiction offering a wide variety of international financial services.

Modern and up-to-date Belizean legislation provides maximum flexibility with regard to the protection of assets globally, as well as in the areas of tax planning and investments.

Key features.

  • You can conduct business inside and outside Belize.
  • Absence of exchange controls.
  • It is not necessary to publicly disclose the name and identity of the owner or owners.
  • A director is required, who can be a natural person or other legal entity of any nationality or jurisdiction.
  • A shareholder is required, who can be a natural person or other legal entity of any nationality or jurisdiction;
  • Bearer shares are not allowed;
  • Registered agent is required;
  • No secretary required;
  • The meetings of shareholders and directors can be held outside of Belize, by telephone or other electronic means.
  • The domiciliation of foreign companies and a Belizean company in another jurisdiction is allowed
  • The company can be registered in any language.
  • Accounting is required (anywhere in the world);
  • Subject to proof of Economic Substance;
  • Details of public knowledge: name of the registered agent and registered address, name and address of the director;
  • Failure to pay government fees would cause the company to be eliminated and automatically dissolved.

Belize, as other ex British Colonies, has enacted legislation concerning Economic Substance. The law requires that certain legal entities that carry out relevant activities demonstrate adequate economic substance in said jurisdiction.

The relevant activities are:

  1. Banking business
  2. Insurance business
  3. Fund management business
  4. Leasing and financial business
  5. Company headquarters
  6. Shipping business
  7. Distribution and service center
  8. Intellectual property
  9. Holding companies, understood as a “holding entity of pure capital”.

In addition, companies that do not fall under the scope of the Economic Substance Act, will nevertheless have to file a tax return every year and pay Belizean tax on worldwide income.

It’s worth noting that the Economic Substance Act and the taxation aspect of the new regime is not applicable to Trusts, Private Foundations and Belize LLC’s. 

Please contact us if you have any questions concerning this matter.



British Virgin Islands

The British Virgin Islands

BVI is an internationally respected financial center that connects markets, facilitates investment, trade, and capital flow. BVI is a world leader in excellence and innovation in financial services and an essential gear in the global economy. As a British Overseas Territory, the BVI offers all the security and stability that is traditionally associated with the British flag.

  • A director is required, who can be a natural person or other legal entity of any nationality or jurisdiction.
  • A shareholder is required, who can be a natural person or other legal entity of any nationality or jurisdiction;
  • Bearer shares are not allowed;
  • A registered agent is required;
  • No secretary required;
  • Exemption of all local taxes.
  • Well developed financial services industry.
  • The legal system of common law based on Anglo-Saxon law.
  • There are no currency restrictions.
  • Company documents are well known and widely recognized by international banks
  • Information on shareholders and real beneficiaries is not public
  • Information of the directors if it is public as of 2017.
  • Subject to an analysis of Economic Substance.
  • Accounting is required (anywhere in the world)
  • Companies incorporated in any other jurisdiction can be continued in BVI as a “Business Company”.
  • BVI may, where the laws of another jurisdiction permit, change of address to said jurisdiction.
  • Failure to pay government fees would cause the company to be eliminated and automatically dissolved.

On January 1, 2007, the Virgin Islands of Commercial Companies British Law of 2004 became the only Commercial Companies Law in the BVI.

The BC Law of BVI eliminates the differences between ‘local’ BVI and ‘offshore’ legal entities. The term “International Business Company (IBC) ‘was replaced by the term” Company (BC)’.

The Law on Commercial Entities (Substance Requirement) entered into force on December 31, 2018. This law requires that certain legal entities that carry out relevant activities demonstrate adequate economic substance in said jurisdiction.

Compliance and reporting requirements appear in the rules of economic substance and in the explanatory notes (the Rules), which were published by the BVI International Tax Authority (ITA) in the draft on April 23, 2019, and finalized on 9 October 2019 to reflect comments from the EU and industry.

The relevant activities are:

  1. Banking business
  2. Insurance business
  3. Fund management business
  4. Leasing and financial business
  5. Company headquarters
  6. Shipping business
  7. Distribution and service center
  8. Intellectual property
  9. Holding companies understood as a “holding entity of pure capital”.

 

Cayman Islands

Cayman Islands

The Cayman Islands are a British Crown colony consisting of 3 islands in the Caribbean that are approximately 480 miles south of Miami, Florida. The area is about 260 square kilometers and consists of Grand Cayman and the “sister islands” of Cayman Brac and Little Cayman. Grand Cayman, the largest of the three islands, is the only island populated significantly with 58,000 inhabitants, of which approximately 29,000 are residents in George Town, the capital.

Taxation has many advantages for non-residents and offshore companies. This made it possible to place the Cayman Islands as the fifth international financial center, with more than 90,000 registered companies, of which there are more than 600 banks, which manage more than 500 billion dollars in assets.

There are two main types of companies for international operations: ordinary (non-resident) and exempt, both types of companies limited by shares.

A non-resident company is a company, which does not intend to conduct business within the Cayman Islands. An exempted company has requested and received the status of “exempt” by the Secretary of Finance.

The exempt company annually submits a declaration of compliance, rather than a detailed annual statement. An exempt company can be granted a future tax exemption for 20 years, which may be renewable. It is worth taking into account that there are no taxes in the Cayman Islands anyway.

All companies incorporated or registered under the Cayman Companies Law, including resident and non-resident companies, special economic zones, and exempt companies, must complete and maintain a final beneficiary registry at the registered offices of the Cayman Islands. The information is not public and is accessible only at the request of the competent authority of the Cayman Islands.

An ordinary (non-resident) company must submit an annual statement containing the details of its shareholders, while an exempt company must only submit an annual statement of compliance with the law of the company signed by an officer or director. Annual accounts do not have to be submitted, nor do they require the appointment of auditors.

An ordinary (non-resident) company must hold at least one Annual General Meeting of Shareholders, which can be held anywhere in the world.

Key features.

  • A director is required, who can be a natural person or other legal entity of any nationality or jurisdiction.
  • A shareholder is required, who can be a natural person or other legal entity of any nationality or jurisdiction;
  • Bearer shares are not allowed;
  • A registered agent is required;
  • No secretary is required;
  • An exempt company is not subject to taxes in the Cayman Islands;
  • There is no minimum requirement for share capital;
  • Accounting is required (anywhere in the world);
  • Subject to proof of Economic Substance;
  • Details of public knowledge: name of the registered agent and registered address, name and address of the director;
  • Failure to pay government fees would cause the company to be eliminated and automatically dissolved.

As of January 1, 2019, new legislation entered into force in the Cayman Islands, which requires that entities within the scope that carry out particular activities have demonstrable economic substance in Cayman.

The International Fiscal Cooperation (Economic Substances) Act of 2018 was enacted after an extensive consultation process with the EU Code of Conduct Group, the OECD, and stakeholders in the Cayman Islands.

The relevant activities are:

  1. Banking business
  2. Insurance business
  3. Fund management business
  4. Leasing and financial business
  5. Company headquarters
  6. Shipping business
  7. Distribution and service center
  8. Intellectual property
  9. Any holding company of shares of other companies and that receives dividends (subject to reduced economic substance).

Relevant entities include the majority of Cayman exempt companies, Cayman LLC, and registered foreign companies, except:

  1. Investment funds or entities through which investment funds invest or operate directly or indirectly;
  2. Entities that are fiscal residents outside the Cayman Islands;
  3. Entities that are authorized to conduct business locally in the Cayman Islands as a national company; or
  4. Cayman exempted limited partnerships and trusts.

 

Costa Rica

Costa Rica

Costa Rica is a democratic country located in Central America. Recently becoming popular due to tax system (territorial) and the availability of a Data Processing License, very popular among gambling websites, it offers two types of companies: The “Sociedad de Responsabilidad Limitada”, also referred to as “S.R.L.”, “Limitada” or “Ltda” and the “Sociedad Anónima”. In both cases, the assets of the shareholders are not to be confused with the assets of the companies and therefore protected from the creditors of the companies.

The special features of the S.R.L. are mainly the following:

  1. Shares cannot be transferred to non-shareholders without the previous express consent of the other shareholders, who have a right of first refusal to purchase them.
  2. These companies require, for their administration, no more than one individual (Manager).

The “Sociedad Anónima”, also referred to as “S.A.”, is the most widely used corporate structure in Costa Rica. It is pretty flexible and its legal treatment is extensive. In general terms, it can have any amount of social capital (usually a low amount is used without any negative consequence) divided into as many shares as the investor desires (normally structured in a way in which they can be divided into as many shareholders that can be previewed, since such shares are, by law, not divisible).

The S.A. has many features, of which the most important are:

  1. The positions of President, Secretary, and Treasurer are legally mandatory and must be occupied by three different individuals
  2. It must have a Board of Directors of at least three members, as well as one Comptroller, who must not hold any powers of attorney on behalf of the company.
  3. Shares can be transferred to any non-shareholder without the approval of the other shareholders.
  4. By-Laws can be issued and they can be amended at any time through a Meetings of Shareholders. Voting by proxy is allowed.
  5. It is possible to establish special features for the protection of minorities and their voting rights.
  6. The legal representatives (those that have the power to represent the company) are liable for any actions taken against the interest of the company and/or its shareholders.
  7. They must have three corporate books (shareholders meetings, shareholders registry book, and board of directors meeting book) and three accounting books. These books must be authorized by the local tax authorities and are a requirement for implementing any change in the company’s By-Laws or its power of attorney structure since no shareholders meeting can be held without being recorded in the specific book authorized for such purposes.

RECENT AMENDMENTS.

The Costa Rican government passed a law that requires the mandatory disclosure of the shareholders and or beneficial owners of any corporate entities registered in Costa Rica. The filing obligation was originally set for March of 2019 but the tax department extended that deadline to September of 2019 so that they could publish the corresponding regulations and procedures for compliance.

The objective of this law is to identify all the shares of each legal entity registered in Costa Rican and then disclose the direct shareholders or the beneficial owners of those shares.

 

Nevis

Nevis

Nevis is a part of the politically independent St Kitts and Nevis Federation. Traditionally, St. Kitts focuses on tourism business and Nevis offers offshore asset protection services. Nevis has its offshore legislation, which brings a lot of advantages to clients involved in international business activities.

New amendments have been introduced in Nevis, specifically stating that IBCs and/or LLCs, incorporated before the start of 2019 and not directly operating a business in Nevis, were granted a period of adjustment. These companies retain their tax-exempt status until June 2021. Since, 1st January 2019, Nevis IBC’s and LLC’s have therefore been subject to Federal Corporate Tax. This decision was taken following consultation and at the direct request of the European Union and OECD, to assist with tax harmonization.

In late 2018, the Government of Nevis amended its International Business Corporation (IBC) and Limited Liability Corporation (LLC) Acts, to remove the exemption of these companies from Federal Corporate Tax.

Key features.

  • Complete powers to engage in any legitimate business worldwide, subject only to certain limitations on local business in Nevis.
  • The name may be registered in any language, with your choice of a suffix such as Inc, S.A., Limited, BV, SARL, KFT, etc. The name must; however, be written in the Latin/English alphabet.
  • Any person or company from any jurisdiction may incorporate a Nevis IBC.
  • Concerning bearer shares, they have been restricted. Bearer shares are only permitted with the approval of the Registrar of Corporations or the Regulator. The Registered Agent must maintain custody of the bearer share certificate on behalf of the beneficial owner and must maintain a register of each bearer share. AML/CFT On-site Examinations are conducted by the FSRC – Nevis Branch to ensure that Registered Agents comply with these stipulations.
  • Corporate directors and single subscriber companies are permitted.
  • Complete exemption from Nevis taxes.
  • Details of management and ownership remain private.
  • Redomiciliation permitted into and out of Nevis, including emergency re-domiciliation.
  • Total confidentiality and anonymity; no requirements to disclose beneficial owners, shareholders, and directors to the Government. The Articles of Incorporation is the only document filed with the Nevis Registrar of Companies. This document does not include any information about corporate directors, officers, shareholders, and beneficial owners. It lists only the name of the Nevis registered agent and registered office address.

 

Panama

Panama does not depend on tourism and financial services and although Panama does have a thriving tourism and financial services industry, we also provide many other services, like the Free Zones, a robust Banking Center and the Panama Canal, Maritime services in general (ports, communications), plus manufacturing and agricultural industries also growing day by day and being more competitive as well.

Panama has a stable democracy, a growing and competitive economy that has consistently grown at a rate of 2 to 5% per year, in addition to:

  • Absence of major natural disasters such as hurricanes, tsunamis or earthquakes.
  • Panama’s Sovereign Debt has been granted Investment Grade by Moody’s, S&P and Fitch Ratings.
  • Banking facilities for companies acting as holding companies or in any case doing business from Panama and possibility of opening accounts remotely, meaning, without having to travel to Panama.
  • Panama provides more security for the Beneficial Owner or Shareholder, as any amendment or modification to the articles has to be recorded publicly and authorized, if so expressed on the certificate of incorporation, by the shareholders, whereas in other jurisdictions (typically common law jurisdictions) these changes may be done privately and with no obligation to register, thus a shareholder could very well not be aware or have knowledge of an amendment.
  • As a holding entity for shares, bonds, bank accounts, term deposits, investment projects, IP rights or any other financial or commercial title
  • Owner of shares in other companies, be them Panamanian or foreign.
  • Owner of immovable property, such as apartments, lots, houses or any other asset, be them movable or unmovable
  • Manager or promoter of international commercial transactions
  • International lease of aircraft, vehicles, machinery, vessels and others
  • Instrument to receive and deliver loans in cash or commissions for products and services
  • Marketing and promotion of products and services
  • Other financial or commercial activities. 

For over eighty five (85) years the Panamanian Corporation (“Sociedades Anónimas”) have been recognized, worldwide, as a corporate vehicle that can be successfully used in a variety of International Business, Asset Protection, Estate Planning Structures, among others.

Key features.

  • Quick registration in 24 to 48 hours
  • The Panamanian Corporations can be registered notwithstanding the nationality of its directors or shareholders. 
  • The income produced by a Panamanian Corporation outside the territory of the Republic of Panama is exempt from paying Income Tax in Panama. 
  • The capital of the company does not have to be paid partially or fully at the moment of incorporation.
  • There is no obligation to file annual reports, financial statements or sworn income declarations, always that the company does not generate Panamanian source income.
  • Legal entities of any country can be appointed as directors, officers or shareholders.
  • There is no obligation to undertake annual meetings of the Board of Directors or Shareholders.
  • The directors and shareholders can meet in person, by Proxy, phone or by any other electronic means. 
  • The shares can be issued in nominative or bearer form. In any case, the name of the shareholder is not required to be registered at the Public Registry, thus privacy is preserved. Bearer shares do need to be kept with an authorized custodian in Panama.
  • A Panamanian company may issue shares with no par value.
  • May issue different classes of shares and series.
  • A Panamanian company may purchase its own shares.
  • Foreign currency incorporations are permitted.
  • Incorporations in foreign languages are always permitted if a translation to Spanish is also filed.
  • The corporate books can be kept in any part of the world and can be managed by electronic files or programs.
  • Shelf companies are available.
  • A Panamanian Corporation can do transactions and own assets in any part of the world, without having the obligation to maintain assets in the Republic of Panama.
  • The Panamanian Corporation can undertake any type of legal business activity in any part of the world.
  • The use of the Apostille is permitted.

On Friday, March 20, 2020, Law 129 of the same date was published in the Official Gazette (“the Law”), through which the “Private and Unique Registry System for Beneficial Owners of Legal Persons” is created, which seeks to centralize and facilitate access to the information of the beneficial owners of legal entities, previously collected by the lawyers or law firms that provide their services as resident agents.

This new regulation also seeks that, through a technological platform, which will be administered by the Superintendency of Non-Financial Subjects, to store and protect the information contained therein, be used to assist the authorities in the prevention of money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction.

The Law defines several concepts, which although previously defined in Law 23 of 2015, this time delves into what are called the equity participation criteria and control criteria.

On the other hand, the Law establishes the obligation of the lawyers or law firms that provide their services as Resident Agents to supply the information of each legal person to whom they provide the service and of their final beneficiary. To fulfill this purpose, the resident agents will have to obtain a code that will allow them access to the Unique System and subsequent entry of the information. The latter, however, has not been regulated.

The information that the Resident Agents must provide about the final beneficiaries is: their full name, identity document, nationality and address.

It should be noted that the information must be kept up-to-date and if there are changes, these must be registered on the platform within 30 days from the date on which the communication of the changes was received from the representative of the company.

It is extremely important to inform that access to the platform will be limited, that is, the system will be accessed by the resident agent of the person or legal entities to whom it provides the mentioned service and two officials from the Superintendency of Non-Financial Subjects, who will have the exclusive purpose to make available to the competent authority the information they require to fulfill their functions in the prevention of money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction and to comply with the obligations of international cooperation established through international conventions ratified by the Republic of Panama.

By competent authority, the Law refers to the Superintendency of Non-Financial Subjects, the Financial Analysis Unit (UAF), the Public Ministry, the Ministry of Economy and Finance (MEF) and the door is left open for other government entities with jurisdiction to address money laundering, terrorist financing and the proliferation of weapons, to request and have access to the platform.

The regulation contemplates an implementation term of up to six (6) months for the Superintendence of Non-Financial Subjects to be in charge of the administration of the platform, however, with the current situation as a result of COVID-19, we estimate that this term will have to be extended.

 



United States of America Delaware

DELAWARE

The State of Delaware is a leading domicile for U.S. and international corporations. More than 1,000,000 business entities have made Delaware their legal home. More than 66% of the Fortune 500 have chosen Delaware as their legal home.

Businesses choose Delaware, not for one single reason, but because the State provides a complete package of incorporation services. The Delaware General Corporation Law is the most advanced and flexible business formation statute in the nation. The Delaware Court of Chancery is a unique 220-year-old business court that has written most of the modern U.S. corporation case law. Delaware’s State Government is business-friendly and accessible. These factors have all contributed to making Delaware a premier legal home to companies around the world.

There are so-called Corporations and the so-called Limited Liability Companies or LLC. A corporation or an LLC that chooses to be treated as a corporation for tax purposes must keep accounting and file annual income returns and pay taxes in the United States. There are strategies to reduce the tax burden in these cases. In cases of LLC that choose to be transparent for tax purposes, the company will no longer be responsible for submitting annual income statements, but its member or owner, with the advantage that, if it is a single foreign owner, the latter will not have to pay taxes in the United States, provided the income is from a foreign source (non-US income). This is a significant advantage, as the LLC could well be used as a vehicle that holds shares and real estate outside the United States.

Notwithstanding the foregoing, it should be noted that, as of January 2017, an LLC with a single foreign member must report to the United States Department of Internal Revenue the name of the person responsible and should be understood as the person responsible for those who have effective control of the society. This information is private and confidential and that the United States collects to comply with the International Treaties on information exchange and double taxation that it has signed.

The United States has not signed the so-called “Common Reporting Standard” or CRS and the Multilateral Agreement for the Exchange of Fiscal Information in Administrative Matters has not been ratified and is not expected to be ratified promptly.

A Delaware LLC is a business vehicle with a legal existence separate and distinct from its owners. Owners and managers are not personally liable for the company’s debts and obligations.

A Delaware LLC can be treated as a pass-through entity for tax purposes. As such, it is considered a hybrid business formation that combines some of the best features of corporations and partnerships.

An LLC is a relatively new type of entity in the United States. If properly structured, it combines the limited liability of a corporation with the pass-through taxation of a partnership. However, it is important to clarify that while LLCs can be treated as legal partnerships, they are not corporations. Owners-or members, as they are called in an LLC structure – can be individuals or any type of entity, from anywhere in the world, and are unlimited in number.

The features of a Delaware limited liability company, when combined with non-U.S. source income, means non-resident aliens of the United States can avoid U.S. taxation when using an LLC.

Other Advantages of Delaware:

  • Delaware’s business law is one of the most flexible in the United States of America.
  • For corporations, there is no state corporate income tax for companies that are formed in Delaware but do not transact business there (but there is a franchise tax).
  • Taxation requirements are often favorable to companies with complex capitalization structures and/or a large number of authorized shares of stock.
  • There is no personal income tax for non-residents.
  • Shareholders, directors, and officers of a corporation or members or managers of an LLC don’t need to be Delaware residents.
  • Stock shares owned by persons outside Delaware are not subject to Delaware taxes.
Nevada

NEVADA

Nevada legislature has worked since the early 1990s to turn the state into a business-friendly environment. Nevada’s advantages have made it a rival to other States in reducing the tax burden for business owners, and their particular combination of benefits makes it especially appropriate for smaller businesses.

There are so-called Corporations and the so-called Limited Liability Companies or LLC. A corporation or an LLC that chooses to be treated as a corporation for tax purposes must keep accounting and file annual income returns and pay taxes in the United States. There are strategies to reduce the tax burden in these cases. In cases of LLC that choose to be transparent for tax purposes, the company will no longer be responsible for submitting annual income statements, but its member or owner, with the advantage that, if it is a single foreign owner, the latter will not have to pay taxes in the United States, provided the income is from a foreign source (non-US income). This is a significant advantage, as the LLC could well be used as a vehicle that holds shares and real estate outside the United States.

Notwithstanding the foregoing, it should be noted that, as of January 2017, an LLC with a single foreign member must report to the United States Department of Internal Revenue the name of the person responsible and should be understood as the person responsible for those who have effective control of the society. This information is private and confidential and that the United States collects to comply with the International Treaties on information exchange and double taxation that it has signed.

The United States has not signed the so-called “Common Reporting Standard” or CRS and the Multilateral Agreement for the Exchange of Fiscal Information in Administrative Matters has not been ratified and is not expected to be ratified promptly.

Nevada offers a wide range of benefits as a state of incorporation, including its ease of registration, relatively low corporate taxes, and lack of state taxes. Nevada also offers strong privacy protections to business owners and a business-friendly environment. If you are starting an LLC, Nevada may be a better home for your business than Delaware.

Some of Nevada’s benefits for LLCs include:

  • No state income, corporate or franchise taxes
  • No taxes on corporate shares or earnings
  • Strong privacy protection for homeowners, who can remain anonymous
  • No operational agreements or annual meetings are required.
  • Fast registration times (companies can register in just one hour for a fee)
  • Low business registration fees
  • Formation of single-person corporations allowed
  • Permissive rules on the creation of actions, which allow their creation for everything from services offered to real estate.
  • An efficient judicial system that often relies on Delaware jurisprudence to resolve business disputes
  • A strong corporate veil that protects agents, employees, officers, and directors of responsibility
  • Shareholders, directors, and officers do not have to live or hold meetings in Nevada, or even be citizens of the United States.
  • Directors do not need to be shareholders.
  • Officers and directors of a Nevada corporation are protected from any personal liability for lawful acts of the corporation.
  • Nevada corporations can buy, hold, sell, or transfer shares of their capital.
  • Nevada companies can issue shares for money, services, personal property, or real estate, including lease agreements and options. Directors determine the value of any of these operations, and it is their final decision.
  • The courts of Nevada have a history of jurisprudence protecting the “corporate veil”, so it is the most difficult in the country for the courts to lift that veil. Nevada has only allowed the drilling of a corporate veil once in the last 21 years, and it was due to fraud resulting in a Nevada resident. The case was Rowland v. Lemire, 99 Nev. 308, 662 P.2d 1332 (1983).
  • A Nevada corporation can be formed for the sole purpose of limiting a person’s responsibility in any lawful business.
  • The use of “bearer shares” is prohibited in Nevada.

Europe

Cyprus

Cyprus is not a zero-tax jurisdiction, but rather a low tax jurisdiction. This beautiful island located in the Mediterranean Ocean offers an extensive double tax treaty network that makes it ideal when it comes to tax planning and additionally is a member of the EU and thus it will not be frowned upon.

Among the particular features of the Cyprus Company we find:

  1. The powers and objects of a Cyprus company are contained within the Memorandum of Association and have to be specific. The languages of legislation and corporate documentation are English and Greek;
  2. The company must maintain a registered office address within Cyprus;
  3. The company must also appoint a company secretary who, for practical reasons, is advisable to be resident in Cyprus;
  4. The Company cannot engage in banking, insurance or the provision of financial services to the public unless special permission is granted; 
  5. The Company cannot trade with resident individuals or companies located in Cyprus other than in relation to the maintenance of premises or banking and professional services. 
  6. Company names are subject to the following requirements: names may be expressed in any language that uses the Latin or Greek alphabet if the Registrar is in receipt of a Greek or English translation and the name is not deemed undesirable; Any name that is identical or similar to an existing company name is not acceptable; Any name that implies illegal activity or implies royal or government patronage is not permitted. The following words or their derivatives are restricted: Asset Management, Asset Manager, Assurance, Bank, Banking, Broker, Brokerage, Capital, Credit, Currency, Custodian, Custody, Dealer, Dealing, Deposit, Derivative, Exchange, Fiduciary, Finance, Financial, Fund, Future, Insurance, Lending, Loan, Lender, Option, Pension, Portfolio, Reserves, Savings, Security, Stock, Trust or Trustees. The following names or their derivatives and foreign language equivalents require consent or a license: Bank, Trust, Building Society, Insurance, Assurance, Reinsurance. The suffix Limited or Ltd. denoting limited liability must be included. 
  7. The minimum number of directors is one. The directors may be natural persons or corporate bodies. In order to obtain relief under the taxation treaties signed by Cyprus, the Company needs to be Cyprus resident, and must have a majority of its directors based in Cyprus;
  8. The minimum number of shareholders is one;
  9. The details of directors and shareholders appear on the public files but anonymity can be retained by the use of third-party directors and nominee shareholders. Bank references for the beneficial owners must be submitted to the Central Bank of Cyprus. However, this information is protected by secrecy laws;
  10. The share capital must be expressed in Cyprus pounds. The minimum authorized share capital of a Cyprus offshore company is CYP 1,000;
  11. For companies wishing to establish a physical presence in Cyprus, the minimum is CYP 10,000;
  12. The following classes of shares are permitted in Cyprus: registered shares, shares with par value, preference shares, redeemable shares, and shares with no voting rights. It should be emphasized that bearer shares are not permitted;
  13. Taxation rules imply that by virtue of special provisions in the Cyprus Income Tax Laws, the net chargeable profits of Cyprus Offshore Companies are taxed at a rate of 10%;
  14. One of the great benefits of Cyprus Companies is that Cyprus has signed a large number of double-tax treaties which provide for reduced or zero withholding taxes on dividends, interest, or royalties paid to a Cyprus Company. There are treaties with Austria, Belgium, Bulgaria, Canada, China, the Czech Republic & Slovakia, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Japan, Kuwait, Malta, Mauritius, Norway, Poland, Romania, Russia (including all the CIS countries except for Kazakhstan), Singapore, South Africa, Sweden, Syria, Thailand, UK, USA, and the former Yugoslavia. Double taxation treaties with Kazakhstan and Finland are currently being negotiated;
  15. License fees are not applicable in Cyprus;
  16. An annual return giving details of all those who have held shares throughout the year and the current directors must be filed and submitted to the Cyprus Taxation Authority and the Central Bank of Cyprus. In addition, every Cyprus Company must prepare audited accounts and submit these to the Central Bank and the income tax office.

 

Malta

Malta

One of the main reasons to start a business in Malta is that the process of forming a Company in Malta is pretty straightforward and lacks complications. The most important thing to note is that you would never need to be present in Malta to form a Maltese Company. The Malta Financial Services Authority (MFSA) is an autonomous public authority entrusted with the regulation of financial services in Malta. The MFSA also houses the Registry of Companies where all commercial partnerships, including companies, are registered regardless of what type of activities they carry out. The Registry of Companies is a public registry and all registered information and documentation are available to the public. The Registrar of Companies is appointed in terms of the Companies Act

  1. Tax exemptions: 5% implied Tax on profits from trading activities of the Malta Company and full exemption on participating holdings.
  2. Limited liability with minimal paid-up capital requirement for the Maltese Company.
  3. Business can be conducted internationally and with minimal changes through the Malta Company.
  4. The Malta Company will be incorporated using your desired name (subject to approval by the Registrar of Companies).
  5. Companies registered in Malta are considered resident in Malta, wherever ownership or management exists or business is carried out.
  6. Non-residents are freely entitled to hold shares or offices in a Malta Company.
  7. Annual and general meetings of the Maltese Company may be held outside Malta.
  8. Malta Companies may hold funds in banks outside Malta.
  9. The company formation procedure in Malta typically takes 48 hours.
  10. Companies can be re-domiciled to Malta.
  11. Highest level of privacy protection.

 

Switzerland

Switzerland

  • Switzerland offers companies an excellent international reputation and a very favorable tax environment with moderate overall taxation compared with other European jurisdictions; 
  • Switzerland is known for its traditionally cooperative and constructive relationships between taxpayers and tax authorities, therefore, advance tax rulings are extensively used to minimize future tax risks; 
  • Possibility to have tax advantages for some types of Companies (holdings, international trading companies, Companies offering services within their group); 
  • No exchange control regulations; 
  • A large network of double tax treaties; 
  • No withholding tax on royalties and private loans interests paid to non-residents; 

For corporate income tax purposes, a company is deemed resident in Switzerland if it is either incorporated in Switzerland or effectively managed from there. 

The General Assessment Rule is that resident companies are assessed on their worldwide income except for profits generated by enterprises, permanent establishments, and real estate situated abroad, whereas non-resident companies are only assessed on profit generated by enterprises, real estate, and permanent establishments situated in Switzerland as well as interest on loans secured on Swiss real estate. 

Corporate income tax is levied at a federal, cantonal, and communal level. The level of corporate income tax payable varies considerably between 11.5% and 25%. Corporate income tax payable to the federal authorities may be tax-deductible for an assessment to cantonal corporate income tax and vice versa. Advance tax rulings on the level of corporate income tax payable are available and are advised as a matter of prudence. 

  • Share capital: minimum CHF 100 000; 20% of the share capital but not less than CHF 50 000 are payable upon incorporation; 
  • Shareholders: minimum 1 shareholder required; 
  • Share certificates: bearer shares are available; 
  • Audit: mandatory, but it is possible to make “opting-out” under certain conditions (ask us for details) 
  • Accountancy: mandatory 
  • Directors: minimum 1 director required; at least one member of the Board of Directors has to be a resident.

 

United Kingdom

United Kingdom

The United Kingdom has a fast and efficient registration. It is a very stable jurisdiction with an excellent reputation. Companies can be established electronically in one day. Besides, this country has strong commercial relations with Central American jurisdictions.

The main attraction of the United Kingdom is its flexible regulatory framework, through which it offers not only favorable conditions for international business but also a complete list of international agreements to avoid double taxation.

All UK companies are residents of the United Kingdom for tax purposes under the “incorporation rule”. This results in the responsibility of worldwide income and income tax, subject to a double tax exemption. The current UK corporate tax rate is 19% (the rate will be reduced to 17% in the year 2020).

The legislation of this country provides for the establishment of British companies (Ltd) and limited companies (LLP), which are attractive instruments for international investment and trade activities.

The directors of the company can be of any nationality and can reside anywhere. At least one director is required.

The Shareholders of the company can be of any nationality and can reside anywhere. At least one shareholder is required, this may be the same person as one of the directors. There is no upper limit for the number of shareholders and a shareholder can be a person or a corporation.

The company must have a registered agent, a registered office, and a company secretary in the United Kingdom.

The details of the Shareholders and Directors appear in a public registry that is fully accessible.

The company must maintain accounting records, however, it does not have to maintain records in the United Kingdom.

Offshore companies in the United Kingdom are highly recommended in the following cases:

  • Holder of bank accounts, fixed deposits, investment plans, and any other financial or commercial title
  • Owner of the shares of other companies or legal entities
  • International leasing of aircraft, vehicles, machinery, and others
  • Borrow or lend money, pay or receive commissions, royalties, or others
  • Marketing and promotion of products and services
  • Exploit the vast network of double taxation treaties

 

Indian Ocena, Middle East, Asia, and Oceania

Hong Kong

Hong Kong

Hong Kong is one of the world’s most liberal economies. Hong Kong’s strengths as cited by the Heritage Foundation are its very low level of government involvement in business activities, very low inflation, very low barriers to foreign investment, very low level of restrictions in banking and finance, very low level of regulation. 

  1. One of the major advantages of utilizing a Hong Kong entity is that it will not be perceived as a tax avoidance vehicle, as Hong Kong is a major trading entity in its own right;
  2. A Hong Kong company is one of the best corporate structures in the world. As well as being an extremely tax-efficient corporate vehicle;
  3. The tax laws of Hong Kong are extremely simple compared to other onshore jurisdictions and the tax advantages of operating there could be summarized as follows:
    1. Taxes are levied according to the “territorial principle” meaning that taxes are only levied on income “derived from or arising in” Hong Kong and not on income sourced outside the Territory;
    2. Some taxes that exist in most jurisdictions do not exist in Hong Kong. Thus there are no capital gains taxes, no withholding taxes, no sales taxes, no VAT, no annual net worth taxes, and no accumulated earnings taxes on companies, which retain earnings rather than distribute them. In the long term, it is intended to completely phase out stamp duty on the sale and issue of shares and securities and to reduce direct taxes further.
    3. Hong Kong has no double tax agreement with any country, except for a limited treaty with the United States of America relating to shipping matters only.
  4. The Business Registration Fee, currently USD335 (HK$2,600), is due and payable to the Hong Kong Registrar of Companies within one month from the date of incorporation and then annually on the anniversary of the first payment;
  5. The standard authorized share capital is HK$10,000. An increase in the authorized share capital above this amount incurs an increase in annual statutory fees. The minimum issued capital is one share of HK$1 each;
  6. A Hong Kong company must appoint a company secretary, who may be a natural person or a body corporate, but the company secretary must be a resident in Hong Kong. The Company Ordinance prohibits the sole director to be company secretary of the Company.
  7. Hong Kong companies are required to prepare full audited accounts under the company laws. Also, the audited financial statements are furnished to the Inland Revenue Department together with a Profits Tax Return. 
  8. At least one director is required and full details of directors are filed with the Hong Kong Public Registry. The directors can be of any nationality and be resident anywhere. There is no requirement for board meetings to be held within Hong Kong and directors may be resident anywhere in the world;
  9. Every Hong Kong Company must have a Registered Office in the Territory to comply with the Companies Ordinance.

 

Marshall Islands

Marshall Islands

The Republic of the Marshall Islands (RMI) which is located in the Pacific Ocean, and is part of the larger island group of Micronesia, comprised of many individual atolls and islets lying north of the Equator. In 1986, independence as a sovereign nation was attained although it remains in Free association with the United States, the same as Puerto Rico. The local currency is the US dollar, with English and Marshallese being the islands’ two most widely spoken languages.

The Marshall Islands is a democratic and independent state, which has had no recent legal reform. The foundation of the legal system in the Marshall Islands partially derives from the legislation of Delaware State, which ensures friendliness and flexibility of the legal infrastructure towards the business community, making it a suitable choice for international corporations, Partnerships, Limited Liability Partnerships and Limited Liability Companies in various capacities.

  • Exemption from all local taxes and stamp duty
  • Maximum confidentiality and anonymity
  • Ease of operation, maintenance, and control
  • Asset security
  • No disclosure or minimum capital requirements
  • A Marshall Islands IBC requires a minimum of one shareholder
  • A Marshall Islands IBC requires a minimum of one director
  • Corporate directors and shareholders are permitted
  • Excellent and flexible post-incorporation follow-up services
  • No statutory requirement to hold annual general meetings
  • Highly competitive fees and costs

 

Seychelles

The Seychelles IBC was created by the International Business Companies Act of 1994. Today this jurisdiction is very popular for its simplicity, the speed of the incorporation process and the price, but it also enjoys many other benefits that you can read below:

  • IBC pays no taxes in Seychelles other than the Government License fee; 
  • Annual reporting not required for IBC’s; 
  • Requirement to keep accounting; 
  • There is no minimum capital requirement; shares may be either registered and may be issued in any currency; 
  • Shares can be issued with or without par value; 
  • Bearer shares are not permitted;
  • Only one shareholder and one director are required. Their particulars do not appear on public record; 
  • Shareholders, directors and officers need not be resident in the Seychelles and there is no stipulation as to their nationality; 
  • Directors and/or officers can be either corporate entities or natural persons; 
  • There is no foreign exchange control; 
  • It takes only 24 hours to incorporate an offshore company in Seychelles and the fees are the lowest on the Internet; 
  • Speedy incorporation procedures and simple ongoing administration; 
  • Shareholders and directors meetings need not be held in the Seychelles, can be held by telephone, may be attended by proxy; 
  • The Memorandum and Articles of Association are the only documents to be held on the public record; 
  • There is no requirement to register initial or ongoing changes in directors and/or officers; 
  • IBC’s may engage in any lawful business in any country and may carry on transactions in whatever currencies they choose.

Recent amendments.

At  the end of August 2020, Seychelles adopted a new Final Beneficiaries Law.

Since most jurisdictions maintain a beneficial ownership registry at the registered agent’s office only, and in accordance with current regulations introduced, similarly to the BVI, Seychelles registered agents will be required to file with the authorities, no later than January 31, 2021, the registry of beneficial owners of the company as prescribed in the Law. Any change in the ownership structure thereafter, we would be obliged to also file with the Financial Intelligence Unit (FIU) any update of the Registry of beneficial owners.

The system and the process for the system with the FIU is not yet implemented since the authorities are working on the internal process and the digital infrastructure to serve it, with which the FIU would be communicating at the end of 2020 to the registered agents when the system is fully operational.

The Regulations and the filling process will require that all companies have in their respective file of Final Beneficiaries a notice under the new Beneficiary Declaration before the Registry of Beneficiaries is effectively presented to the authorities.

All companies (active and non-active) that do not provide the notice before the established deadline to guarantee the completion of their UBO registration with the FIU, will be in default and consequently, the registered agent must resign.

United Arab Emirates

United Arab Emirates

The United Arab Emirates boasts several jurisdictions within itself, but primarily we deal with Ras Al Khaimah (RAK). This jurisdiction combines several advantages, making the United Arab Emirates an ideal basis and perfect environment for your successful offshore business. RAK is a perfect example of a completely tax-free environment combined with an excellent and outstanding reputation as a highly regulated financial center.

Ras Al Khaimah is part of the United Arab Emirates, a constitutional federation of seven emirates located along the southeastern tip of the Arabian Peninsula. Its infrastructure is of the highest standard, with access to more than 170 shipping lines and approximately 86 airlines connecting to over 100 cities worldwide. The RAK Investment Authority (RAKIA) launched the concept of the International Business Company in January 2007 and it has since become one of the most popular offshore destinations.

 

If you have any questions, please contact us