Problems and benefit of Offshore Company
There are many legitimate reasons to set up an Offshore Company but for many companies the main reason is to take advantage of tax laws that are more partisan than those in the United States. Setting up an offshore corporation is a great way to keep your taxes low and more of your company profits fluid. Setting up an offshore corporation does not alleviate the need to pay taxes in the country where the income was derived however.
The other benefits of incorporating an offshore company are; the ability to trade internationally, financial confidentiality, asset protection, business and land ownership in a foreign country, increased financial flexibility and privacy.You may also find that offshore companies offer a higher quality of asset protection than setting up your company in the United States. Most offshore destinations will let you form an offshore company in such a way that earnings are fully shielded from all future liability.
To make the scenarios work effectively the offshore corporation must be formed by an attorney so there is attorney client privilege covering the formation of the corporation. If one uses a corporate agent the attorney client privilege is absent and the corporate agent could easily be compelled to reveal who formed the offshore corporation in question. If one took an attorney to court to get into the records concerning an Offshore Company formation the attorney would likely go to court kicking and screaming attorney client privileged communications all the way and give a heck of a fight to protect his client which in turn protects the livelihood of the attorney. If a corporate agent was use the corporate agent would need to retain an attorney to try to protect the records. The corporate agent has a case is weaker in terms of protecting you since attorney client privilege is a pillar of law in just about every country. The question of how much money the corporate agent would spend to protect your records is a scary question at best. You do want the security of dealing with a lawyer and having attorney client privilege. In Panama corporate agents do not exist, only a lawyer may form a corporation. Buying a corporation from an agent who bought it in turn from a lawyer does not make things any better in terms of the corporate agent still exists as a weak link in your privacy and security.
There are actually five main reasons why you should establish an offshore company.
1) To Reduce Tax
2) Simplification of Company Operation
3) Reduced Reporting Requirements
4) Asset Protection
5) Increased Confidentiality and Anonymity