To build a successful international business with tax optimization and protection of personal assets it is necessary to understand how an offshore company is managed. Now there are many dedicated software development teams, they help to create a unique product. Taking into account all your changes and wishes, they create a finished product, which will help in the realization of your business. This article contains information about nominee service functions, tools and methods of managing offshore business directly by the business owner and transferring offshore business to trust management.
The main types of offshore company management
Every entrepreneur, before registering his first offshore company, wonders how to better manage an offshore company, and what nuances are important to pay attention to. We offer to get acquainted with different types of offshore company management in popular jurisdictions. Be warned, however, the deoffshorization policy that has been unfolding around the world is bringing changes. Some types of management become irrelevant and are replaced by new ones.
The old type of offshore company management – bearer shares
Most tax havens have already prohibited their offshore companies to issue bearer shares. And yet they are the oldest type of management and ownership in the classic offshore. Practically all the foreign banks no longer open corporate accounts for firms issuing bearer shares. Only a few banking institutions in Andorra and Panama remain.
The main advantage of this instrument was to preserve the confidentiality of the real owners. Previously, banks required that bearer shares be kept in safe deposit boxes. They also had an important disadvantage – a great risk of loss of rights to manage the firm, if bearer shares were stolen or lost. After all, they do not contain the owner’s personal information.
Management through nominee shareholders
The next type of management of the offshore company we consider involves the issue of registered shares to the nominee shareholder. This tool is suitable for conventional offshore companies, which prohibit the issuance of bearer shares. In this case the registers of shareholders open in many offshore companies contain only the personal data of the nominee shareholder. Thus, only the information on the nominee shareholder is public. Information about the real owner remains hidden.
To control the actions of a nominee shareholder an agreement with the actual owner is executed specifying all obligations and rights of the nominee.
Trust management
This type of offshore company management is often used when establishing a trust or fund. Trust management implies placement of private assets under management of another person on the basis of trust. The income from it, excluding the commission of the trustee, is transferred to the account of the real owner of the firm.
The beneficiary and the trustor conclude an agreement with each other, in which they spell out all the terms of the trust management. When the fiduciary manages a trust, the owner receives income from its assets at minimal expense. When the settlor manages a trust, the owner receives protection of the assets from third parties.
Board of Directors
The most familiar way to run an offshore company is to establish a board of directors. Many offshore companies require a single resident director to provide substance. In this case, the owner orders a nominee service from the registration agent, and himself, if desired, performs the duties of a second manager in the Board of Directors. Administrative responsibility for the activities of an offshore company lies with the nominee director acting as a representative. To maintain anonymity the owner does not enter into the position of the manager. Only personal information about the nominee director is entered into the register of directors of the firm. Depending on the offshore jurisdiction, they may also be entered in the Registry of Companies.