12:47 p.m. - 2010-05-17
Offshore Holding LLC
Offshore Holding Company
How can a offshore holding company be of useful?
This is a question which is asked daily on our live chat and we would like to spot some light on this question to make it more clear towards new or young business entrepreneurs which haven't seen this possibility yet.
A Offshore Holding Company can protect you from any losses in case that your trading or investment companies get into a hurricane of troubles or simply just need to be liquidated or stop their business, if that should happen which we don't wish you ever will be experiencing then it is most often too late to setup any offshore holding company to rescue the last bit of assets you may have left, so in other words a Offshore Holding Company will work as a protection shield in an effort of asset protection.
To setup a offshore holding company isn't any difficult, all you will need to do is to establish the Holding company before you register the trading or investment company, of course it is possible to establish a offshore holding company after you have registered the trading / investment company but most often this transaction involves some tax that have to be paid in your home country.
However, once you have established your Offshore Holding company which needs to be registered and formed in an Offshore Jurisdiction like the Seychelles, Belize, BVI or Cyprus then the share of the new trading / investment company will have to be owned by the Holding Company, if you don't do business yet then it is a simple task otherwise if you already have a established company you will need to transfer the shares (ALL SHARES) to the Offshore Holding company in order to get the structure in the correct place.
Any trading or investment company can be transfer their shares to a offshore holding company, actually there are no complications with it others than you may have or may not have to pay tax from such an transaction, therefore it is highly recommend to get your company structure right from the very beginning, it is less complicated and you avoid any tax complications.
Now, if something should go wrong in your trading company or investment company, and you will be forced to stop all activities but still owe people or business partners money normally you won't be able to "clean" the company from the good assets, but while you have a Offshore Holding company you can easily move all the "good assets" to the Holding Company and liquidate or strike off the bad company. Another common way to protect and secure assets in a company is that everything like the office building, trademarks, patents etc. are owned from the very beginning by the Offshore Holding Company and rented/leased to the trading company, in this way no authority not creditor or others that you may owe something can doubt the originating owner of such assets and you will be able to keep them for the purpose to use them in another company or a new company.
We would highly recommend any business owner with good earnings or which are entering into a new business venture to establish a offshore holding company.
Quickly said, then the major benefit to have a Offshore Holding Company compared to a local company are that it is very difficult for any creditors as well as lenders to get an overview of what assets there are or may be in the
Holding company or even get a court order to set aside the originating owner in an effort to get what they may have or not lost.
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