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Should you purchase an Offshore Ready Made Company or incorporate a new Offshore Company?

This is a question that many of us have asked ourselves, which avenue we should go down.  With this being a decision that most of us struggle with, it’s good to do some research on what options are available. Obviously, you are the only one that can decide what option is best for you.  I hope the information below will give you an idea on what options are available and the information provided should help you make the right choice.

What is an Offshore Company?

An Offshore Company is a type of legal entity which is incorporated or registered in an Offshore Financial Centre or ‘tax haven’. The extent to which a country is regarded to as Offshore is often a commonly asked question. Countries such as Bermuda, British Virgin Islands, Seychelles and Belize are classed as Offshore Jurisdictions, and companies incorporated within these countries are labelled as Offshore Companies.

What is a Ready Made Offshore Company?

A Ready Made Company is also known as a Shelf Company, Preregistered Company or Vintage Company (depending on the age of incorporation).  This is a company that has already been registered with the authorities in the Offshore Jurisdiction.  Buying a Ready Made Offshore Company is an advantage to a lot of customers looking to set up or buy an Offshore Company. This can be seen as an advantage, as the registration number of the company is immediately available.

When purchasing a Ready Made Offshore Company, you will need to allow time to transfer the ownership over to yourself, this includes appointing new officers. The time to transfer the ownership of the company is usually a lot quicker than incorporating a new company, so this can be a great time saving advantage if you urgently need to start trading.

An important point that I would recommend to everyone who is looking at purchasing a Ready Made company is to:

  • Always ensure that the company has never traded before – as the company could have debts or liabilities
  • Ensure the company is in good standing with the authorities – you can ask for a Certificate of Good Standing, this confirms that the company is in good standing with the authorities

The reason I recommend these two points is so you don’t buy a company that has bad debts / credit history or isn’t up to date with the authorities, as this could be a huge problem for you. 

Once you have found the right company for you, we would ensure that you purchase the company from a reputable seller, one that can assure you the company has never traded.

Advantages of purchasing a Ready Made Offshore Company

  • Boost your business with an established company – reliability comes with an aged company, may add commercial credibility which is reassuring for your clients.
  • Establish business relationships easily – business and banking relationships are easily established with an older company
  • Gain confidence from customers – new and existing clients will feel more confident dealing with you as your company will have a history
  • Simplicity & save time – the process is simple and straight forward, Shelf Companies are immediately available to transfer over to you to begin trading with the company

What is an Offshore Company Formation or Incorporation?

This is a brand new company that is newly registered with the authorities in the offshore jurisdiction. The company will be registered with your specified details from day 1 of the registration, it usually takes a few days to register a company dependent on the jurisdiction you choose. I find that Seychelles is the quickest, usually taking up to 24 hours to register a company.

There are a number of different offshore jurisdictions that you can choose from, you need to make sure you make the right choice.

When registering a new Offshore Company you are required to provide information on the following:

  • Company Officers – including names, addresses and other personal information
  • Share Details – what shares you require issuing within the company
  • Business Activities – details of what the proposed company will be doing

Depending which offshore location you choose, you may be required to provide more information on the company you intend to establish. Offshore authorities usually ask for as much information as possible to ensure the company is registered to your requirements.

As soon as the offshore company has been registered and you have the registration number, you will be able to start trading with the company.

Advantages of an Offshore Company Formation

  • Usually cheaper than purchasing an existing company
  • You can choose the exact company name you require without having to change the name of the company
  • You are shown as being the owner of the company from day 1 of the registration
  • You can choose exactly how you wish the company to be registered
  • There will be no previous officers within the company – the registers of the company will show you only as being Director / Shareholder
  • The shares for the company will be organised exactly how you wish them to be

What should be included within the price of an Offshore Company Formation or Ready Made Company?

You should ensure that the following is included within an Offshore Company Formation/Incorporation:

  • Government Registration Fees
  • Registered Office for 1 Year
  • Registered Agent for 1 Year
  • Certificate of Incorporation
  • Memorandum and Articles of Association
  • Register of Directors
  • Register of Shareholders
  • Share Certificates

You should ensure that the following is included within an Offshore Ready Made Company:

  • Transferring the ownership of the company to new officers
  • Registered Office for 1 Year
  • Registered Agent for 1 Year
  • Certificate of Incorporation showing when the company was registered etc.
  • Memorandum and Articles of Association
  • Register of Directors – showing a record of the previous officers within the company
  • Register of Shareholders – showing a record of the previous shareholders within the company
  • Share Certificates – showing current and previous shareholders and shares within the company

Making the right choice

Advantages for both company choices are shown above, however the final decision would depend on your requirements and this is totally your choice! Only you can be sure that you have made the correct decision. 

If you would like to give your clients the impression that you have been established for longer than you actually have, a Ready Made Company is probably the best.

I know that making the correct decision is not always easy and you may require more information on the different offshore locations. If this is the case, or you have any questions about the different locations, please do not hesitate to contact the specialist team at CFS.

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