Today

Rhiannon Williamson, from offshore investment firm Shelter Offshore, looks at the six critical considerations to keep in mind when choosing the right offshore jurisdiction for your personal requirements.

There are about 43 countries, islands, territories or jurisdictions in the world that offer at least a relatively secure haven for tax efficient business, banking or investment activity - but because each and every one of these so called 'offshore jurisdictions' offer different benefits and have various restrictions, how does one go about choosing the right offshore jurisdiction for company incorporation or a bank account for example?

A great deal depends on what your personal or business requirements are in terms of everything from confidentiality to tax efficiency - and to assist you with choosing the right offshore jurisdiction there are actually six key considerations to apply to each potential jurisdiction within your scope…

1.) Your personal or company profile

Why do you want an offshore company or bank account? If it is purely for personal reasons, will the company just be used for the preservation of assets for example or will the bank account simply be an internationally accessible pool for your liquid cash? If so, this will have a very different bearing on your choice of jurisdiction compared to someone who intends to trade through their offshore company for example.

If you fall into the latter category you will have to consider the jurisdiction you choose carefully taking into consideration your partners, clients, suppliers and how they will view the fact that you have a company registered in a given offshore location. Certain offshore jurisdictions are black listed by other nations as they represent unfair taxation competition or are regarded as corrupt for example - if you open a company in such a country this could say a lot of negative things about you to your potential client base.

Think about the image of a jurisdiction and whether it will reflect positively, negatively or indifferently on your personal or company profile.

2.) Stability of the location
Certain tax havens are known to be unstable, corrupt, a political tinderbox or an economic catastrophe waiting to happen….with other offshore jurisdictions it is not always immediately apparent whether they are politically and economically stable or not, so do your due diligence into the stability of the location before you commit to it otherwise you will be putting yourself, your assets and your business at great levels of risk.

3.) Legislation and reporting
How well established and tried and tested are the reporting requirements that are in place for offshore companies in a certain location? If a nation has a significantly high number of offshore companies or International Business Companies registered there than that's fairly good testimony to the sophistication of the legislation in place governing everything from company incorporation to reporting requirements…but make sure you carefully examine the laws governing offshore business in a given offshore tax haven to ensure the laws are up to date, sophisticated and simple. Furthermore, make sure that all legislation is backed up by independent local judiciary bodies which protect the interests and rights of all those with companies, bank accounts or investments within the given jurisdiction.

4.) Sophistication of Infrastructure
Infrastructure in this context refers to everything from telecommunications and internet accessibility to allow you to conduct business with support companies involved in the day to day running of your company such as a law firm or an accountant - to the business language used, the legal system in place and the physical accessibility of the country.

In fact, you need to consider everything from the time zone of the country relative to the one in which you reside to work ethics, from privacy and confidentiality to exchange controls, the local financial services industry and basically anything that can benefit or negatively affect the day to day operation of your company.

5.) Special benefits or features
Whilst the majority of features and benefits available in all jurisdictions for those who incorporate a company there are the same or very similar, certain jurisdictions are more suitable for certain types of company such as financial services companies for example, some are not suitable at all for citizens of certain nations, some allow for the use of nominee directors and some offer very specialist types of offshore company incorporation and if you require specialist services or company features this will again impact your decision when it comes to choosing the right offshore jurisdiction.

6.) Costs
And last but by no means least you need to consider how much it's going to cost you to set up a company or get a bank account or establish a trust or get a credit card in a given location for example, and then how much it will cost you each year to renew your particular service…every jurisdiction in the world has a very different fee structure as do all the offshore service providers who can assist you with establishing your particular offshore product or solution.