What jurisdiction should I choose for my Offshore Holding Company?
I get asked this question lots of times when speaking to new clients. There is no ‘one’ single perfect option, however in this section I will talk about common issues that might arise and which jurisdictions to stay away from in certain circumstances.
Let us say that Mr Smith (new client) has just called the office after being recommended. He wants to form an offshore company, to purchase a commercial property. His intention for doing so is that he wants to keep the beneficial ownership private. He has truly little knowledge in respect to the structure required, however has been spending days on days looking for the best buys on the Internet. He keeps seeing offers saying ‘Seychelles Offshore Company for £595’ or ‘Belize Offshore Company for £650’. What is happening here is that he now has these prices rigidly fixed in his mind.
By the time he has an initial discussion with Intelligent Formations, we are already on the defence and trying to justify the uplift in fees from what he has seen on the Internet.
For example, for an offshore company to purchase a property in another jurisdiction it should have the Corporate documents certified correctly by a Notary. The client’s conveyancing solicitor, if he is of any good practice, should firmly request these. A suitable offshore bank account should be set up to facilitate the purchase and they will also ask for the certified documents of the Company.
As far as jurisdictions go nowadays, we have Belize and Seychelles in and out of the OECD blacklist so our advice would be not to use these jurisdictions to purchase a property. I am not saying you can’t, I am simply saying that there are better options for peace of mind.
It is not as simple as it first seems and the need for anonymity could include the requirements for Nominee Director(s) and Shareholder(s). Now, if I were investing a lot of money into purchasing a property through an Offshore Company then I would not want any Tom, Dick or Harry based in a Blacklisted, unstable jurisdiction having partial control over my assets.
The key here is to choose a clean jurisdiction where the company documents are in English and are certified upon incorporation. The Isle of Man for example is a firm favourite for Holding Companies and would not scare any decent conveyancing lawyer off.
You can employ professional Nominee’s in the Isle of Man to whom you build a relationship with. They will provide you with non-dated resignations resolutions and signed share transfer forms before you go ahead with the purchase.
Now, to finalise, you might have paid a little more in the end but you sleep at night knowing that you have made the right choice for your Offshore Company Formation to act as a holding Company for your property purchase.