Formation of an Offshore Company – The process
There are many jurisdictions that allow international entrepreneurs to create and form an offshore company. This should always start by the process called know your client (KYC). This is an international term used for the process in which the client should furnish the company formation agent with his/her requested documentation proving who they are. The minimum requirements for standard KYC should include a clear scan of a passport and a recent proof of address which can come in the form of a utility bill, or a bank statement. These documents should also be certified by a solicitor or an accountant and it is usual for most Offshore Company Formation agents to request that these documents are certified by a Notary. The KYC requirement are also requested on all the new Company Directors, Shareholders and Beneficial Owners. Remember that Companies can also act as Directors and Shareholders and appropriate KYC should also be carried out on the entities attached.
Covid-19 has made the certification of documents a little difficult so many firms now allow certification to be done via the ever-popular Skype or Team video link. Once these documents are received by the agent then clients will be required to explain the Company activity. For example, which countries will the Offshore Company be trading. This question is asked due to international sanctions placed on such countries like Iran, Afghanistan, and Syria, to mention a few.
Source of funds must be explained, this is how the Offshore Company is going to be funded. Other questions that need to be answered as part of the due diligence from reputable offshore agents are the transactional activities and the amount of expected turnover.
Once all the above have been received the application is passed to a compliance specialist to check the documents and application forms are all in order and then the Offshore Company can be incorporated. This process usually can happen within 24 to 48 hours depending on the jurisdiction and Registry speed.
As soon as the Company has been incorporated at the Registry then they will release the documents to the offshore company formation agent to be checked and forwarded to the client. These documents should include the certificate of incorporation, memorandum of articles and association, Director / Shareholder registers, and share certificates.
The original offshore company documents can then be shipped to an address of choice anywhere in the world for safe keeping and the company can then start to trade in its chosen activities.
Our next blog will be the opening of the Offshore Company bank account and the process involved in the service.