An offshore company is defined as a company that is incorporated in a jurisdiction that is other than where the beneficial owner resides. In other words an offshore company is simply a company that is incorporated in a country overseas in a foreign jurisdiction.

An offshore company definition, however, is not something fixed but will have varying definitions depending upon the circumstances. The term “offshore” is what often appears confusing to most people and is used in contrast to traditional “onshore” companies.

While an onshore company refers to a domestic company exists and functions within the borders of a country, an offshore company in comparison is an entity that conducts all of its transactions outside the borders where it is incorporated. Because it is owned and exists as a non-resident entity it is not liable to local taxation as all of its financial transactions are made outside the boundaries of the jurisdiction.