Offshore Company Formation: 10 Essential Pros & Cons of Going Offshore

An objective discussion is necessary concerning offshore company formation. What is it really all about? Why do you need it? The truth is that offshore companies really are legitimate when properly used. But unfortunately, the entire offshore industry has come under attack for dubious reasons. 

Lets start by exposing the hypocrisy. Ironically, the list of western dignitaries and politically exposed individuals who have joined the nefarious “Russian Oligarchs” indulging in offshore company formation is indeed very long. 

A top down analysis reveals that the Queen of England herself has offshore accounts in the Caribbean. So it is difficult to take the newspaper headlines seriously which only demonize the politically vulnerable Russian oligarchs. This is especially apparent in London which is where most of the oligarchs’ money always winds up anyway.

Either way, one thing these publicly exposed individuals all have in common is that they engaged unscrupulous offshore service providers to form their offshore enterprises. As a result, their personal information was leaked to reporters who were eager to exploit it. Otherwise, the public debacle never would have emerged. 

Should this deter you from forming an offshore company? Not if you use a diligent agent. You can be the judge. Here is everything you need to know.

Table of Contents

  1. Why are Offshore Companies Controversial?
  2. The Source of Leaked Personal Data
  3. List of Dignitaries with Offshore Accounts
  4. Why is Second Citizenship Necessary?
  5. Use a Trusted Lawyer or iGlobal Agent
  6. Offshore Company List of Essential PROS
  7. Offshore Company List of Essential CONS
  8. Choose iGlobal for Your Offshore Security

Unjustified Scrutiny of Offshore Company Formation

Unfortunately, for the legitimate 99.9% of offshore clients, unbridled public scrutiny is unjustified. Indeed, evidence of wrong doing is circumstantial at best for the vast, vast majority of compromised offshore accounts exposed in the data leaks.

Just because you have money, has become a crime in itself nowadays. Clearly, this is what it is really all about. Since the beginning of human civilization, there has been a perverse fascination with wealth, especially other people’s money.

So public officials with conflicts of interest notwithstanding, the exposure of personal information disclosed by the data leaks is not justified.   

It seems that beneficial owners of legitimate offshore companies are only guilty because 1) they have more money than the average Joe; 2) they used an unscrupulous offshore service provider who leaked their information and 3) they have offshore accounts which they meant to keep private.

Source of the Publicly Leaked Databases

Offshore company formation has greatly increased in the last twenty years or so, especially in former British colonies located offshore.

To further clarify, the lightening rod for the database breach has been accounts held in British Overseas Territories e.g. British Virgin Islands, Cayman Islands. These countries in the spotlight have not completed the process of independence from the United Kingdom.

Indeed, the lingering connection between the countries at the center of the scandal and the United Kingdom is far from coincidental. The connection is especially relevant since the UK retains the power to override local legislation in their overseas territories that overtly operate as offshore financial centers. But they have not done so.

Who can we thank for publishing the data? The receiving party of the breached databases is the International Consortium of Investigative Journalists (ICIJ) based in Washington D.C. Thanks to the massive breach of client confidentiality by offshore service providers, the ICIJ has published data contained in over 20 million documents that was used to expose over 750,000 identities concealed by offshore companies and trusts.

To be clear, the ICIJ publicly exposed (without due process) the identities of the beneficial owners behind all of these offshore companies without discretion, not only the identities of those with public disclosure obligations. In addition, the information is online and meticulously organized for all to see.

List of Top ICIJ “Power Players”

To make it more publicly useful, ICIJ has made a list of individuals who are “Power Players”. By power players, they mean public officials with conflicts of interest. Such individuals have indeed come to define everything and everyone that has gone offshore.

It is very telling to know that just because they are dignitaries does not mean they used common sense when they set up their offshore accounts. A mass market offshore service provider is apparently who they chose to set up their companies. As a result, they are now exposed in a public debacle, which for the vast majority of their unlucky companions is completely unjustified. 

Just the same, here is a short list of prominent public figures with big conflicts of interest.

  1. Volodymyr Zelensky – President of Ukraine
  2. Petro Poroshenko – Ukrainian Oligarch, Former President of Ukraine
  3. Queen Elizabeth II – Queen, United Kingdom
  4. Salman Bin Abdulaziz Bin Abdulrahman Al Saud – King of Saudi Arabia
  5. Malcolm Turnbull – Former Prime Minister of Australia
  6. Tony Blair – Former UK Prime Minister
  7. Wilbur Loius Ross Jr. – Former US Secretary of Commerce

Why is Second Citizenship Necessary?

Anyone who has an offshore account is guilty by association. This is the result of public scrutiny conducted by those who do not rightfully understand the legitimate use of an offshore company. You are obviously avoiding income tax, so when subjected to public scrutiny there can be no other logical conclusion.

Although I do not advocate this view, you should take note because the conclusion of the masses may be justified for citizens of countries which impose citizenship based taxation.

For example, citizens of the United States, Myanmar, Eritrea and Hungary have this form of global taxation system. Therefore, it does not matter where you are based or where your income is sourced. You must pay tax to your country of origin, if you don’t you are probably avoiding taxes.

However, a moral loophole exists if you are based in a foreign country and you do not need or want to ever receive public aid and services from your government. If so, why should you be obligated to pay tax to that government?

Do you intend to stay abroad indefinitely? Is your income solely derived offshore? Have you already relocated your assets offshore? If so, you are in need an additional offshore solution to supplement offshore company formation.

Primarily, the benefit of second citizenship will give you the option to renounce your original citizenship. As a result, your ownership of offshore accounts is vindicated beyond any doubt after you complete renunciation. Even if not immediately utilized you will be glad that you acquired second citizenship.

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Use a Trusted Lawyer or iGlobal Agent

In order to maintain complete control of your personal data, keep it in your possession. As you can see from the ICIJ scandals outlined above, this is imperative lest you meet the same fate.

So it is most unwise to delegate company formation responsibilities to your financial advisors. Invariably, they will just call some offshore service provider e.g. Mossack Fonseca (Panama Papers) and your information is then promptly leaked just in time for the next scandal.

The sensible alternative is to use a boutique agency for offshore company formation. Or better yet, do not use an agent at all. You can call a local attorney directly and personally handle your own company or trust set up.

The solution is simple because you are avoiding the middle man altogether and therefore avoiding any unnecessary risk of your data being exposed. Plus, you stay in control of your own financial planning. It is really a matter of common sense to keep your information confidential.

My partners and I have 35+ years of experience working with the St Kitts and Nevis citizenship program, plus Nevis Company formation. If you need a local attorney reference for company or trust formation in the Eastern Caribbean, contact me and I will be happy to assist.

Essentially, I can also help you obtain an offshore bank account for your company which is not necessarily located in the same country as it is registered. 

Offshore Company Formation List of PROS

  1. Privacy and Liability Protection: The best offshore companies are found in St Kitts and Nevis, specifically on the island of Nevis. As a result, in combination with citizenship by investment, an offshore company in the right jurisdiction can protect your privacy plus completely eliminate your income tax and creditor liability. 
  2. Data Security: Your personal data is 100% secure. Indeed, legit tax havens that we represent enforce strict privacy laws. The breaches outlined above were committed by offshore service providers who we do not associate with.
  3. Offshore Banking: The crux of offshore company formation is a compatible offshore bank account. We will walk you through the entire process. You can rest assured our citizenship clients will have the best post citizenship services. Therefore, your offshore bank account set up will be a trouble free experience with iGlobal.
  4. Live and Work in the US: Choose the right Caribbean citizenship so you and your offshore company can gain access to the US market. The US E-2 Visa, US B-1 visa, US EB-5 and also the US L-1 Visa are available to certain Caribbean passport holders. Secure a long term, multiple entry visa into the US to cash in on the spendthrift US economy.
  5. Offshore Company for Offshore Life: Living a life offshore requires a legit offshore company. Form an offshore company in the best jurisdiction to gain secure access to your markets and investments. Use iGlobal to set up your offshore solutions. 

Offshore Company Formation List of CONS

  1. Public Officials: – Use of offshore company formation by public officials to break campaign promises, dodge taxes and launder money is not acceptable. Fortunately, public officials comprise only small handful of beneficial owners of offshore companies.
  2. Offshore Service Providers: Breaches of confidentiality are common among mass market offshore service providers. Client confidentiality is paramount, it is necessary to use a high level of discretion before choosing who will set up your offshore company. A hasty decision can haunt you for a lifetime. 
  3. Public Bias: High net worth individuals will inherently face an unjust social bias. Anything positive emerging by allowing unfettered public scrutiny of your offshore accounts is a remote possibility. Before publication of personal details is allowed, due process must be followed.
  4. Bank Account Formation: New companies can face high scrutiny when applying for an offshore bank account in a good jurisdiction. Although not insurmountable, it can be a formidable obstacle. So diligent preparation is essential. It is a valuable benefit if your company has an established history of banking transactions. This will ease the transition to moving offshore.
  5. Bad Actors: A small handful of bad actors have brought disrepute to the entire offshore industry.

Choose iGlobal for Offshore Security

The choice of a trusted agent for your offshore company formation is essential. My partners and I have over 35+ years of experience working with the Caribbean citizenship by investment programs. As a result, obtain second citizenship in addition to an offshore company in the most efficient, confidential and cost effective manner possible.

Rest assured that we have walked in your shoes on the path to global citizenship. Our clients obtain satisfaction through personal and professional guidance. Contact me today to secure global access and economic freedom.

Edwin Morgan - Offshore Company Formation specialist
Edwin Morgan, Managing Director Go Global Corporation PTE LTD

Email: [email protected]
Telegram: +60104689761