For most people, the concept of offshore companies brings to mind corrupt businessmen, murder, espionage, and some billionaire being locked up for life for some crime unrelated to the offshore company. However, that is our prime-time law and order view. There are actual benefits to establishing an offshore company that has nothing to do with the crime. Offshore businesses are perfectly legal and can help the business owner to grow his or her company and wealth without the bureaucracy and high taxes imposed by his or her government. However not to be misleading, there are rules and laws by which the business owner must abide, but these like the offshore holding itself, are for the owner or owners’ protection.
There are several recommended locations throughout the world in which individuals or corporations can establish offshore businesses. Most choose to pick a location that is a draw to international visitors or tourists, where the business can also provide a service to the local inhabitants. Some of the most beautiful islands in the world, and a perfect location to establish an offshore company, is Labuan, Malaysia. Labuan is perfect for an offshore business because it is a common law jurisdiction and not bound by any rule outside of Malaysia.
The registration fees are very small, ranging from $300 to $1500 (U.S.) depending on the size of the company to be held. Upon registering, it only takes 1-2 days for the company to be incorporated. The entire process is much simpler and far more streamlined than establishing a business in the U.S.
It is true that offshore companies do save business owners on taxes, yet they still must pay taxes. In fact, trading companies pay 3% taxes, while holding companies are not subject to tax. There are minimal government fees payable every year, and owners are required to file tax returns.
Labuan welcomes these business owners and their companies, and there are firms that are there to assist, advise, and make the process go as quickly as possible, while also protecting not only the government of Labuan but also the business owner.
Shareholders can live and meet anywhere, there must be corporate directors, but local directors are optional. There must be a company secretary, but if more than one, at least one must remain local. Also, there is no requirement of the nationality of any of the owners or shareholders.
Many of benefits of establishing an offshore company in Labuan are the same as anywhere, such as
• minimized taxes
• reduced administration
• asset protection
• lower set up and maintenance costs
• lower start-up capital requirement
While these are the same benefits of starting in any of the other most utilized countries for offshore businesses, there are advantages that Labuan offers that others may not. Obviously, there is the beauty of the islands that attract many vacationers and business conferences. The most important benefit is that the Labuan government, as well as the inhabitants, recognize that offshore businesses bring financial as well as cultural benefits to their country and they are there to assist in any way possible.