Legal status, ownership and management
of an offshore company
The legal structure and operation of a typical offshore company mirrors that
of any common law-based limited company.
Once formed, an offshore company -- or, in fact, any company -- is an entity
in its own right. Having the status of a legal person, an offshore company is
quite separate from its owners (shareholders) and managers (directors) -- a
fact exploited time and time again as a protection against litigation.
Just like any limited company, an offshore company is managed by a board of
directors for the benefit of its shareholders. Shareholders have the power to
elect the company's directors.
In many offshore jurisdictions, a single person of any nationality can act
as both the sole director and the sole shareholder.
Increasingly, nominee directors and nominee shareholders are used to protect the
actual beneficial owner's identity. Nominees are professional parties who, subject
to a private contract with the beneficial owner, allow their names to be used
in place of the name(s) of the company's owner(s).
Powers and restrictions of
an offshore company
Most offshore companies are permitted to conduct any business activity that
is not specifically prohibited by the legislation of their place of incorporation.
A typical offshore company can do what any limited company can, and more:
Open bank accounts worldwide
Own cash, securities, commodities
Own real estate, land
Own intellectual property
Offshore companies can be managed from anywhere in the world.
A common restriction of an offshore company is that it cannot conduct business
inside its country of incorporation.
Many offshore companies are completely tax-free: they are exempt from any taxation
on their profits or assets, the one exception being the requirement to pay a
small annual licence fee.
An ideal offshore company does not need to file annual accounts or returns.