Examples of using offshore companies

Offshore companies can be used differently, and their advantages can be combined. Typical applications are as follows:

1) The tax optimization and planning
 

• Offshore company is duly established, registered and active company whose ID, headquarters, Managing Director scope of business are duly registered, may quite legally provide services to Czech companies, enter into contracts and issue invoices, whether in CZK or other currencies and prices for its servives may be at market or negotiated rate, depending on the concept chosen.
• Avoidance of taxation of dividends, or dividends payment to partners: a typical feature of tax systems of offshore destinations is non-aseessing taxes on dividends and profits distributed to partners, while a natural person being a business owner in the CR (either LLC or JSC), has to, after payment an income tax, assess at 15% a payment of dividends or a net profit (15%), so there is a DOUBLE taxation of these funds, offshore jurisdictions do not apply such taxes and, besides that, they have a Bilateral Agreement concluded  with the Czech Republic for the avoidance of double taxation, so that the CR CANNOT ASSESS TAXES on payment of dividends upon limited liability companies at 15%

 

2) International Trade

• International trade in goods is an increasingly popular reason for using offshore companies and their structures for the management of logistics, which significantly benefits from possibilities of tax optimization, even in use of tax-free zones
• A typical example is the involvement of offshore companies between suppliers and consumer of goods and the transfer of some of the profits to such a company

 

3) Holding companies

• Possibility pf reducing the tax burden due to a holding formation while centralizing profits into the parent company having its headquarters located in some of offshore destinations ranks among decisive advantages - typically the most frequently used jurisdictions are of Netherland´ s (the avoidance of taxation of dividends and capital flows) or of countries like USA and the Seychelles (full advantage of offshore tax optimization)

 

4) Intellectual Property Rights

• Use, possession and sale of copyright licenses, know-how, patents, trademarks and other intangible assets

 

5) Anonymity of Property

• An offshore company combined with the service of nominee directors is ideal for the purpose of making the owner of a business or property invisible – it will ensure a full anonymity of ownership, while mainaining your full control over your assets - a similar solution are mostly used in Anglo-American world, when, for example in London, there is 70% of real estate held by offshore companies – this way of assets administration is known as TRUST

 
6) Provision of services

• Economic and business consultancy, agency and brokerage activities, negotiations with business partners, education and training, online presentations, database management and data warehousing, legal services, etc. belong to the most frequent services provided by offshore companies.

 
7) Investments in securities

• You can easily minimize the tax consequences arising from profits achieved in trading shares or other securities when using offshore jurisdictions – this is often widely used even by small investors

 

8) International financing

• Provision of loans and lendings through some offshore companies and jurisdictions prevents from taxation of interest on those loans and thus leads to a higher profit of loans provider

 

9) Trading receivables

• This specific business is tailor-made for a utilization of offshore structures; a dealer buys these claims typically from banks (outstanding loans and mortgages) for a purpose of their final resale or enforcement. Trading receivables through an offshore company can significantly reduce the tax burden on companies owing to a lower withholding tax

 
10) Business without necessity of a basic capital

• Our law allows a business both to Czech and foreign companies
• By contrast to Czech ones, the offshore companies have fully redeemed their low basic capital already at the moment of establishment, the typical capital is $ 100 divided into 100 shares at 1 dollar. Such a share setup allows for an easy distribution of a company and the possibility of participation of additional partners
• Offshore company can easily set up a branch office in the CR with company´ s ID number using a provided registered office´ s address. Such a branch office acts through its Head, , which we can also provide at your request. The branch office behaves just like a Czech company, you can apply for the VAT registration, you may have your staff while maintaing most of your tax advantages pursuant to your domicile legislation.

„If you have any questions, please contact us.“
JUDr. Jakub Maur, executive

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