(Last Updated On: November 15, 2023)

What are the present-day offshores? On the one hand, they still have the reputation of jurisdictions used for all kinds of illegal activities, like money laundering or hiding. All that is confirmed by the media headlines that announce different scandals related to offshore jurisdictions – and by numerous ads that offer extremely fast company registration with 100% confidentiality, no taxes to be paid, and cooperation with any bank of the world. On the other hand, this is simply not true. In this post, we will take a look at the real situation in the realm of offshore business.

If you want to read more about such issues as offshore confidentiality, welcome to our portal. We have a whole section devoted to offshore business and banking (though we work with midshores and onshores as well). Our experts start companies for entrepreneurs from across the globe on a regular basis, and they share useful information in their articles. You can also book a session with our expert to ask questions or discuss your business plans and get qualified advice for free. And if you decide to delegate all the administrative steps to us, we can start an offshore company for you on a turnkey basis.

Let’s look at some misconceptions that exist in the world of offshore business.

Information in the Register

You establish your offshore company and think that the information from the company register will not be available to third parties. And there do exist closed registries (in Panama or Nevis, for example). However, you should know that even such jurisdictions transfer the information on each shareholder/founder to local authorities and they are required to keep these records to comply with international laws. This requirement is obligatory, so the data you provide is conditional (third parties cannot access this information at any time, but they can do so if they have a serious reason to do that, like a court decision).

Banks Cooperate with All Offshore Businesses

Banks are willing to provide services to companies that fulfill the requirements of international regulators and pay taxes. Offshore jurisdictions offer low tax rates, which is good for businesses but may entail some problems with banks:

  • Serious banks are usually reluctant to onboard such companies as they seem dubious.
  • Payment systems are not always offshore company-friendly, either.
  • If the company was bought as a ready-made legal entity rather than registered, it would be quite expensive (or even impossible) to open an account for it.

Shelf Company Operation

There is a popular misconception that a shelf (ready-to-use) company can start operations as soon as it is bought. Unfortunately, this is not exactly so. If you buy a shelf company with a bank account (our company sells only such packages to simplify matters for future owners), you can launch it almost at once. However, if the ready-to-use company is bought without a bank account, you will face the challenge of opening it.

If you buy a company with an account, use a reputable service provider or you may face some unpleasant surprises:

  • The company’s accounts may be seized due to the violation of laws by the previous owner.
  • The services may be denied for the above reason.
  • You may be required to cancel the previous account and set up a new one, which takes time.

We have a wide range of reliable ready-to-use companies for sale. Please get in touch with us to find out more.

Banks and Offshore Companies Control

Some people think that banks do not control offshore businesses in any way, but it is not true.

First of all, tax information is supposed to be exchanged between countries, and financial institutions share information about suspicious transactions with the authorities.

Second, you should know that the bank will only open an account for the company if it provides additional documents, which may be challenging. Here is a possible list:

  • Passport data of the nominee manager
  • Explanation of the reasons for company setup
  • Document that describes the scope of the company’s activities
  • Publicly available information about the beneficial owner
  • Proof of the company’s sufficiently high business reputation
  • Certificate of non-conviction for the owner

An Account is Not Mandatory

The overwhelming majority of companies incorporated by foreigners are meant for active operation. If you have no corporate account, you cannot carry out business activities and keep in contact with business partners. In addition, practically all countries require legal entities to have corporate accounts as the latter need to submit financial and tax reporting. Moreover, an account makes it easier to trace the movement of financial assets.

Opening an Account for a Ready-Made Company is Easier

In fact, quite the opposite is true – no matter whether we are talking about an offshore, midshore, or onshore company. You will face numerous challenges trying to open an account in this way as there is a common belief that ready-to-use companies are bought to hide from the public eye, conceal unlawful activities, or work without paying taxes.

Banks will take a good look at your company – especially if it was set up in an offshore jurisdiction. The matter is that the new owner is highly likely to get some unpleasant surprises from the previous one:

  • Problems with the law
  • A bad credit history
  • Debts with another financial institution
  • A bad reputation

You will have a hard time trying to explain to the bank that this is the previous owner’s fault.

In most cases, banks do not even explain why they turn the customer down. Thus, the new owner loses time and money and decides to start it all anew in the end.

Don’t miss an opportunity to get professional advice to avoid such situations.

Useful Tips

If you think that all you need is an offshore company, we recommend taking the following steps:

  • Activate the service that generates accounting reports.
  • Obtain a tax exemption certificate.
  • Create a corporate website and fill it with appropriate content.
  • Set up a virtual office to receive correspondence and calls. This is a good step to confirm the company’s active status.

As you see, the offshore world may be tricky, and you need to know the ins and outs. Click on the above link to explore it in more detail or get in touch with our experts to have a smooth experience!


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