One of the main advantages of going offshore is bookkeeping. Accounting for offshore companies is often reduced to the minimum, meaning that offshore jurisdictions generally do not require companies to submit annual reports, or require only widely general reporting.
Here we will explain the main benefits of accounting for offshore companies.
No financial statements, no tax returns, and no consolidated statements Your typical offshore company, whether it is an LLC or an IBC, will generally not need to submit financial statements, tax returns, or consolidated statements. Probably the most it will need to submit is an unedited general balance, as with Belize IBCs. Thus, to keep the business going and complying with the laws of the jurisdiction, all your company needs to do is pay government fees.
Yet, you must consider that if your offshore company does business in another territory that demands filing reports with local authorities, that is a requirement you must comply with. This may happen if you set a branch of your offshore company in another country.
However, “offshore” is a flexible term. That means that under this term, some jurisdictions that might be considered offshore require annual audits. The best example of this is Hong Kong. In the said countries that require some sort of submission of reports or accounts, you can be penalized for non-filing or late filing that can go from fines or suspension to the termination of the company.
With the increasing international regulations, auditing is becoming mandatory on a higher level even in the traditional offshore jurisdictions. The regulations are constantly changing and, in order to comply with the accounting regulations of every jurisdiction where you establish or operate, we advise you hire the help of a professional accountant with experience in international corporate services.
Why you should still do it?
A widely different question would be if you want to voluntarily keep annual reports. This can be beneficial for many reasons. First, some offshore jurisdictions are updating their legislation due to OECD pressure and are doing it quickly. Belize is a good example of this.
In some countries, they must keep drafts, although state authorities will not audit nor receive them. This is a way to protect owners as they can have actual information about their company at all times. Plus, some jurisdictions allow the registered agent to receive profit & loss statements and balance sheets upon request.
This means that even if the accounting is private, it must be conducted. Another reason why you may want to keep your books up to date is that a bank may ask for the financial statements of your offshore company, but generally just the basic ones: profit & loss statements and balance sheet.
What can we do for you?
In Privatus Maximus, we work with the best experts in the best offshore jurisdictions in the world. We can help you set up an offshore structure in most of the sought-after jurisdictions worldwide. Also, most of our experts can help you find an experienced registered agent and with accounting, whether it is mandatory or not.
What kind of jurisdictions do we work with? We can help you set up an LLC or IBC in Belize, Nevis, Cayman Islands, Hong Kong, Saint Lucia, Mauritius, Delaware, and many others. Just contact us right now and our experts will find a tailor-made solution for you.
This article is merely informative and does not constitute legal or formal advice. In order to find out the exact regulations that apply to your country or you company´s country, we recommend a consultation with a professional accountant.