What is Offshoring?

In this article we are going to see what is offshoring, and what are offshore companies and their main characteristics.

Offshore is a term that can be applied to offshore banks, companies and investments, and refers to any location that is beyond national boundaries, whether on land or water. In terms of more commercial activities, offshoring can often be referred to as outsourcing.

An offshore company is one that has its headquarters abroad, i.e., it is located in a country other than the country of origin of the investor or client.

A company may have several reasons for moving abroad:

  • Be headquartered in a country with a more convenient regulation for your business.
  • To benefit from lower salary ranges in other countries. 
  • Benefit from less costly taxation.

 There are many countries with offshore financial centers (OFC), in fact, there are some that are very popular, such as Switzerland, Belize, the Cayman Islands, etc… 

Like everything in this world, there are two points of view on offshoring. Those who are against it argue that it is a form of tax evasion, and those who are in favor argue that offshore companies help the flow of capital.


What are its characteristics?

The main characteristics of offshore companies are:

  • Companies establish their headquarters abroad.
  • They do not carry out any of their economic activities in the country of incorporation.
  • They usually pay less tax.
  • The incorporation of this type of company is simple.
  • The cost of registering the company is much lower. 
  • Reduce audit costs.
  • They are not required to hold meetings with shareholders.

 It is clear that an offshore company is very useful for investors and companies, but it is always better to do it with a company like Orion, which will help you to do it in the best possible way and always within the legal framework.


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