Incorporating Abroad

Reasons to Incorporate Abroad

Companies that incorporate abroad run the very real risk of a PR backlash. But the possibility of negative PR might not be enough to dissuade you from taking your company outside the U.S. -- especially when you consider all the great reasons to incorporate abroad.

You've heard about companies that incorporate offshore, but you've probably never considered it to be a real possibility for your company.

Why not? Although incorporating abroad has a bad reputation, there are a lot of great reasons for taking a company offshore - none of which have anything to do with shady or illegal business activities.

Legitimate and successful US businesses incorporate outside of the US all the time. Although foreign incorporation comes with a unique set of challenges, it also comes with benefits that can give your company a leg up in the marketplace or fulfill specific requirements for your business. If the idea of foreign incorporation is new to you, here are five reasons why incorporating abroad might not be a bad idea:

  • Tax Benefits - Clearly, the single biggest reason why many US companies incorporate abroad is the possibility of achieving significant tax savings. Offshore incorporation can be used to minimize tax requirements for the company and its principals. Combined with the power of the offshore banking community, this benefit alone is enough to push some business owners across the border.
  • Asset Protection - Offshore corporations have a long-standing reputation as reservoirs of asset protection and wealth preservation. By allowing assets to be owned by the corporation (rather than by individuals), they can be sheltered from seizure by creditors and/or the government.
  • Nondisclosure - Companies that are incorporated in the United States are usually required to disclose the names of board members and major shareholders. However, that's not the case with businesses that have been incorporated abroad. If discretion is important to you, offshore incorporation provides a ready-made resource for protecting your anonymity.
  • Simplicity - As long as your company does not do business or use financial resources (e.g. banks) in the local jurisdiction, foreign incorporation significantly reduces the regulations and requirements that are typically associated with corporate ownership. When it comes to a simplified corporate business entity, it's hard to beat offshore incorporation.
  • Reporting - Similarly, the reporting requirements for businesses that are incorporated abroad are minimal compared to their US-based peers. Foreign jurisdictions streamline reporting to make themselves more attractive to corporate interests.

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