Doing Business Offshore: Legal Solutions to Eliminate the Tax Wedge

Have you ever wondered how doing business offshore could transform your company? With the right legal offshore solutions , you can reduce the tax wedge to zero , maximize profits, and protect your assets. Offshore jurisdictions offer unique advantages: low or zero taxes, financial privacy, and access to global markets. In today's globalized world, more and more entrepreneurs and investors are seeking offshore solutions to optimize their taxation and increase their business profitability. Establishing an offshore company not only reduces the tax wedge, but also offers advantages in terms of asset protection and confidentiality. However, it is essential to follow legal strategies to avoid problems with the tax authorities.

What Does It Mean to Do Business Offshore?

An offshore structure refers to a company registered in a foreign jurisdiction that offers tax and regulatory advantages. Some of the key benefits include:

• Zero or low corporate income taxes
• Asset protection against legal actions and creditors
• Corporate confidentiality and privacy
• Ease of management and less bureaucracy

Why Choose Offshore Business?

1. Tax Reduction : Countries such as Panama, Seychelles or Belize offer advantageous tax regimes, with zero income taxes for offshore companies.
2. Asset Protection : Offshore structures protect your assets from litigation or legal claims.
3. Privacy : Offshore jurisdictions guarantee confidentiality, with no obligation to publish the names of the owners.
4. Access to Global Markets : Operating offshore allows you to expand your business internationally.

Tax havens and offshore companies

Tax havens are where public limited companies are established, and they are also home to public company registries. In tax havens, you're unlikely to find a truly public registry. While they do allow you to know the company's name in the public domain, everything else is jealously guarded as classified information and unavailable to the public or judicial authorities. Indeed, tax havens are the ultimate destinations for seeking true fiscal and personal privacy.

In addition to an offshore company, you'll need to open an offshore account. An offshore bank account is an account opened in a bank outside of Europe. If opened legally and with the right requirements (proper tax residency and a qualified offshore company), it doesn't transmit information to the tax authorities and preserves the privacy of transactions and customers. Opening an offshore bank account is therefore essential if you want to operate an offshore limited company. The tax residency and tax domicile of both the offshore company and its beneficiary do not necessarily have to be in the same offshore country. Operating an offshore business means two fundamental things:

Obtaining a personal tax residence and domicile in a country with territorial taxation (such as Panama or Paraguay )

Open an offshore bank account at one of the many offshore banks we work with

Finally, it should be emphasized that European, British, and especially Dutch, Swiss, Bulgarian, Slovenian, Cypriot, and Maltese companies are not offshore. None of these countries are tax havens for Italians or Europeans. Legally, they are considered onshore, not offshore, companies.

Through our website, you can take advantage of all these and many other offshore services. Contact us.

POEM or Place of Effective Management

Studio Panama Italia has been providing offshore services, such as opening offshore companies with offshore accounts, for years and has dedicated its efforts to offering a high level of product and service for all budgets and workloads.

Operating Offshore means laying the foundations in one or more jurisdictions with privileged taxation and territorial taxation, which provide for the incorporation of offshore companies remotely, without a physical presence on site, which may often be single-owned, therefore with a single director, and may also have a single shareholder, often the same director.

Territorial taxation is a type of preferential taxation available only in a few specific countries, such as Panama and Paraguay for individuals and legal entities, and in other offshore countries only through corporate incorporation. Through appropriate techniques, it is possible to evade or circumvent the POEM, or Place of Effective Management. The POEM, or Place of Effective Management, is the place of effective management, or the place where a company is effectively managed and controlled, or the place where the highest-level decision-making process on important policies essential to the management of a company takes place.

The POEM, or Place of Effective Management, does not necessarily have to coincide with the place of incorporation. An offshore company, along with tax residency, is the basis for easily and legally operating tax-free, also circumventing the POEM through the use of new technologies. Indeed, a prerequisite for a valid POEM is determining the actual location where decisions regarding the management of a company are made, whether offshore or onshore.

Article 4, paragraph 3 of the OECD Model Convention says

“if by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.”.

POEM, "anxiety from overestimating risk"

The situation is changing and, paradoxically, favoring those who operate these companies remotely thanks to the feasibility, enshrined in the company's articles of association, of being able to make decisions at the highest levels (senior members, CEO, managers, directors) from abroad, via telephone, Skype, or any virtual medium.

It goes without saying, therefore, that POEM is not actually a serious problem to which we should give serious consideration, as a wide range of means are available to circumvent local management. For example, being a shareholder in a company but not appearing to be involved in its management allows one to bypass management and entrust it to external nominees, deliberately outside the country that one does not want to be defined as POEM.

This bypassing of the Place of Effective Management or POEM is, among many, one of the numerous ways to take advantage of an offshore company in defiance of the ridiculous OECD rules.

Territorial Taxation in Offshore Regimes

Territorial taxation allows you to pay zero taxes in the new country where you have obtained residency, such as Panama, provided you do not receive earnings or payments from other residents of that country. Offshore companies are the basis of all transnational transactions. Opening an offshore company is legal, transparent, and permitted by Italian and international law.

Opening an offshore company allows you to dilute liability, protect both tangible and intangible assets, establish an inheritance, take advantage of advantageous international insurance, open offshore accounts with banking secrecy, and use your offshore company as an international holding company.

Many jurisdictions allow the use of nominees or figureheads on the board of directors of an offshore company. Opening a foreign company in these jurisdictions is highly recommended due to the clear and simple rules, often derived from British Common Law, and the absolute anonymity of the public corporate registers.

In particular, Nevis companies and Cook Islands offshore companies are particularly popular in this area. If you opt for other jurisdictions, there are Panamanian joint-stock companies that adopt the Roman Civil Law. But what is an offshore company? An offshore company is one registered in a country outside of Europe, allowing you to avoid taxes and pay zero taxes on earnings when operating in a country other than the one in which it was incorporated. American LLCs are also considered offshore companies.

Opening of anonymous offshore companies

Joint-stock companies represent approximately 70% of the companies used worldwide to manage, establish, and operate transnational businesses. Conducting business operations through a shell company is therefore the first option for any manager or startup to gain an edge over competitors

Offshore company meaning

An offshore company is a company established in a country far from its place of residence and outside Europe, which operates in countries other than its country of incorporation. Often, and almost always, it manages to evade up to 100% of the tax burden related to business conduct in one or more specific territories.

Different laws, treaties, TIEAs, DTAs, specific KYC, AML depending on whether under Fincen, FATCA, or European management, positively or negatively affect, dilute or not the limited liability, reduce or not the described advantages, reduce or increase the privacy obtained and perceived, expand or not the credit resources that can be requested from specific institutions or public institutions, allow or not to participate in public tenders or to receive or not funds for various purposes.

The variability depends on the specific context, the tax residency of the board of directors, the shareholders' committee, the managers or members, etc. An objective assessment and the ideal structure of your foreign company with an account must plausibly be preceded by a comprehensive study of your situation, an examination of your data and core business, and finally a legal opinion on how a corporate incorporation tailored to your specific needs should be legally approached.

In this case, we therefore ask you to be particularly mature in choosing one of our paid consultations on what to do,

Offshore company advantages

Incorporating an offshore company brings countless advantages in terms of privacy, secrecy, anonymity of one's identity, and protection from seizures, both physical (by hiding behind an anonymous company one does not risk being the victim of kidnappers, mafias, criminal organizations, and organizations dedicated to kidnapping and extortion) and judicial (preventive active seizures or in the event of clear liability in cases of professional misconduct, divorce, or damage to third parties).

Incorporating a public limited company also allows you to operate with DTAs globally, take advantage of TIEAs, and obtain bank credit and bank guarantees from international and offshore banks.

The advantages of operating with a foreign company aren't limited to those listed above, as there's also extensive corporate law that adapts to multiple situations and depends on the country of operation. A good rule of thumb is to understand that not all companies are the same.

 Offshore companies in Italy

Offshore companies operate regularly in Italy and are legally accepted. It is estimated that approximately 21,000 joint-stock companies operate legally in Italy. Clearly, the company must have a tax code and perform due diligence on the final beneficiary, which will only slightly affect the benefits derived from operating abroad with an anonymous foreign company.

 Offshore company costs

On average, it depends on the location and any additional features such as nominees, translations, apostilles, certifications, etc. Prices start at €1250 for a basic company. Contact us for more information