Difference between Onshore and Offshore Company

While setting up a business, it is necessary to consider where you want to register that company. Different companies differ in how they operate depending on their overall business goals and the products and services they sell. For example, an offshore company will vary from the onshore companies on how they work as their operational needs are different.

Whether a firm decides to register as an offshore or onshore company depends on a cost comparison, business location, and other factors such as cultural considerations. What’s the difference between offshore and onshore companies, however? What do these terms mean?

For starters, both the types of companies refer to the different jurisdictions that companies can register under. Each has different ramifications and protocols regarding privacy, assets, and taxes. Therefore before choosing what jurisdiction to register under, it is wise for any given company to take the time to determine which jurisdiction would best suit it in the long run.

Still unsure about the differences between the two? Let’s take a closer look at each one.


Onshore Company

Offshore Company


Onshore companies are registered in countries that do not offer preferential tax options. These companies usually reside in countries that are more developed economically.

Offshore companies refer to those that register in certain countries that offer preferential tax options.


Reduced skilled labor cost, absence of cultural and language barriers, secure outsourcing, etc.

Flexible, adapt to different working environments, high-cost saving, access to skilled labor, etc.

Business Operation

Onshore companies typically conduct a sizeable amount of their business in the country where they are registered.

Offshore companies cannot conduct business in the jurisdiction in which it is registered.


Onshore companies are provided less privacy, which leaves them more subject to state control.

Offshore companies and their owners are provided with complete privacy. The company information is not provided outside.

Tax Rate



Office Space

Office space is mandatory, and residence visas are possible depending on the size of the office/work premises.

There is no need for an office space to be rented, and therefore it does not allow for the issuance of residence visas.


High-cost structure

Low-cost structure

Onshore and offshore companies have their particularities, and it is essential to understand them in the context of specific business purposes. The organization’s image can be linked to the jurisdiction in which it is based- an even important reason to seek proper guidance and counseling before registration.

How to Decide on Whether to Open and Operate an Onshore or Offshore Business?

When deciding between the onshore and offshore companies, the location you set your business in is critical. Also, taxes imposed in the country you opt to open your business must be a significant factor to decide whether to go offshore or onshore.


We hope you better understand the difference between onshore and offshore company entails of. As you’ve seen, there are some key factors you should put into consideration before deciding whether to consider an onshore or offshore company. Utilize these factors so that you can be sure about the company that will suit your needs better once you open it.

Business Setup Worldwide is a platform to help you start an offshore company. We provide this service in different parts of the world. With offshore company registration we also offer other services like offshore company bank account opening, business licenses, accounting and bookkeeping, IP services, etc. should you decide to register an offshore company, contact us- we’d be glad to assist you.