A modern market is undergoing large-scale changes in almost all sectors, and its financial component is not an exception. A financial market, which operates today on the international stage, differs significantly from the former one, which operated a couple of years ago. According to the opinion of international experts and financial analysts, the issue of confidentiality of information and banking secrecy was a main impetus for the changes in the financial sector. Formerly, the world banking groups and financial institutions could guarantee 100% a banking secrecy, but today the situation is evidently different.
In the current situation, it is quite difficult to find correctly understanding and to take the only right decision, which will not harm an existing business. At the same time, there is always an alternative option, which makes it possible to provide financial assets with an adequate protection, including an information protection.
Foreign jurisdictions – why may be highly useful
In the current economic climate, foreign jurisdictions remain one of the most popular tools for optimization of many business processes. Moreover, the various offshore structures and special mechanisms provide businesses with an opportunity to protect its own assets. Today, international decisions are taken using the most various tools, starting from traditional foreign companies, and up to the complex multilevel structures.
An attractiveness of foreign jurisdictions is a result of emergence of a number of issues and tasks. If you are familiar with foreign jurisdictions only to a minimum extend and did not face such issues earlier, it will be difficult for you to choose the best option for your business. You should know the peculiarities of the local corporate legislation and legal forms of the legal entity to be incorporated.
A choice of a suitable jurisdiction is not limited to the choice of a territory with minimal tax level and low cost of company administration – it is a consideration of a number of factors and aspects, which directly affect the reliability and security of business. It is important to consider the following key factors:
- Availability of the infrastructure, which is necessary for your business;
- Culture and business ethics of the local population;
- Protection of private property at the legislative level;
- Issues of visa application procedure and business licensing.
The most attractive and effective strategy of protecting your assets in a foreign jurisdiction can be found only when considering the sum of all the aspects.
A special attention should be given to the financial and credit institutions that operate in the country. Approved and established offshore banks will offer you, in addition to servicing, services of financial agents and consultants.
Approach of choosing an optimal country for registration of a foreign company
You should answer several questions in order to get a clear understanding of the basics, which you should take into account when choosing a foreign jurisdiction, including:
Are the decisions and judgments of foreign judicial authorities on the issues of execution of financial assets from your account, applied on the territory of the target jurisdiction?
Do not underestimate unfair competition and other negative factors of the market even if you are sure that this matter is not applied to you, and it is unlikely that you will encounter it. It is impossible to predict and to anticipate all the possible situations.
Protection of the assets at the legislative level is typical for a reliable jurisdiction, and public authorities do not accept and execute the decisions and judgments of foreign judicial authorities. Your assets will be under a reliable protection of the state, provided that you do not violate an applicable law.
Is the confidentiality of information about the ultimate beneficiaries and asset protection provided at the legislative level ?
The answer to this question overlaps to some extent with the previous one, because the effective protection of your assets largely depends on the information safekeeping. Unfortunately, nowadays, the number of traditional foreign jurisdictions, which can provide information security at the legislative level, declines. This situation is due to the intensification of resistance to the low-tax jurisdictions at the international level, and the introduction of international tools of pressure on banking institutions.
What are the exceptions in the current legislation, which allow foreign fiscal or judicial authorities to gain access to information and assets of an offshore formation?
Here we are talking about all the possible international agreements that are aimed at the exchange of information, including tax information. They can include both separate contracts and agreements on information exchange in automatic mode. This issue requires a tailored approach and thorough analysis. For example, if the foreign jurisdiction is dependent on a particular large country, knowledge of the legislation of this country is required.
How the intended country of company registration is economically and politically stable?
Many traditional low-tax jurisdictions apply an approved economic model, when the local economy and in particular the treasury are supported at the expense of registration and annual charges for servicing the companies, which are registered in this country. This system was long ago tested through practice, and is successfully applied in low-tax jurisdictions. However, one must follow the news, events and important changes in legislation of such areas.
What is the level of development of the local financial, social and legal infrastructure of the chosen foreign jurisdiction?
Many traditional foreign jurisdictions, which have a form of small island countries, are characterized by the limited possibilities in terms of infrastructure provision. Typically, such areas are located far away from the mainland and offer their clients a small range of instruments, including financial.
Besides, the low level of legal or social infrastructure can become a barrier for recruiting qualified employees. As a result, if chosen jurisdiction cannot provide quality service and custody of assets, its value as a tool for optimization is greatly reduced.
If you have difficulties or lack the necessary resources to study the legislation and peculiarities of the various foreign jurisdictions, you can always use the services of professionals. The advantages of qualified help cannot be overstated, because a question of choosing a right jurisdiction is a question of protection and security of your assets. You will not have to waste time and private resources, and a team of professionals will choose the most optimal jurisdiction that meets all the needs of your business using many years' experience and own groundworks. Help of the professionals is the opportunity to achieve set goals in a short time and with minimal financial losses.