Most business owners tend to have inhibitions while kick starting their small business or startup. Even research has pointed out that 90% of startups fail to make a mark in the market. Industry experts recommend offshore company setup to those who are starting with limited resources up their sleeves.
The jurisdiction of a new business is a critical factor that most business owners fail to consider. Consequently, they go on to set up bases in their home countries. As a result, more than 20% of startups fail to make it past their first year in the market.
An offshore company may not be the perfect solution to all kinds of businesses, but the plethora of business benefits more than make up for it. Read on to know more about how small business owners can take steps such as starting a company in Hong Kong as a foreigner or any other offshore jurisdictions across the globe to reap huge benefits.
What Is an Offshore Company for a Small Business?
Several misconceptions exist concerning offshore entities. First, people have been misled into believing that these foreign entities are dubious or illegal by detractors. However, this could not be farther from the truth.
An offshore company refers to an entity set up in a jurisdiction other than the home country of the business owner. For instance, a resident of the United Kingdom can choose to kickstart an offshore company in Malaysia.
It is not mandatory for business owners to shift to the jurisdiction wherein their company is located. Based on the type of work, you may also conduct your business tasks from the confines of your home. E-commerce startups are a good example.
What Are the Benefits of Taking Your Small Business Offshore?
In 2021, more and more people are taking a step towards setting up their businesses. As a result, there has been an overwhelming increase in competition.
An offshore setup can work miracles for a company that is yet to establish a name in any particular country or jurisdiction. For example, startups that fall in the e-commerce sector need not worry much about locations and can start an offshore company in Dubai, Malaysia, Singapore, or other jurisdictions.
Read to know more about the advantages of setting up an offshore business.
- Tax Benefits
One of the most significant benefits of an offshore company is very low to zero taxes, if not the biggest. As more and more jurisdictions are trying to become more business-friendly, they also come up with beneficial taxation systems to help offshore businesses persevere.
Many business owners have earned huge profits after setting up offshore companies in Singapore. The country is well-revered for having a flexible taxation system. The income tax and corporate tax rates are meagre. The country has also introduced tax incentives and other relief measures to welcome more and more businesses.
- Protection of Assets
Suppose you live in a country wherein the political situation is mainly unstable. In that case, you can set up your small business in a well-known jurisdiction for being equipped with a safe economic and political climate.
Most of these jurisdictions attract offshore companies due to a robust legal system that protects businesses against unlawful claims or groundless lawsuits.
Offshore company registration in Singapore has become a popular choice due to the nation’s sound laws concerning commerce, intellectual property protection, and so forth.
If you are the type of business owner who greatly values financial privacy, the security aspects of offshore companies will blow you away.
If you have a unique idea for a business and don’t want your competitors to gain profits from your ideas unlawfully, it would be better to set up a company in a jurisdiction other than your home country.
- Tons of Foreign Trade Opportunities
Incorporating your small business in a foreign jurisdiction will pave the way for plenty of investment opportunities, something that may take you years to accomplish if you started in your own home country.
For instance, starting a company in Hong Kong as a foreigner means that you will have access to increased trade and investment opportunities owing to the jurisdiction’s central location.
- Talent Pool and Better Infrastructure
When you choose to set up your company in a jurisdiction other than your home country, you get unparalleled access to a massive pool of talented professionals and excellent infrastructure. On top of that, you can attain skilled human resources in these foreign jurisdictions at a much lower rate than in your own country.
Numerous countries out there, including the British Virgin Islands (BVI), Hong Kong, Singapore, New Zealand, etc., offer desirable business benefits for SMEs. Therefore, the onus is on the offshore enthusiast to carefully scrutinize these benefits and pick the jurisdiction that offers their company the best environment to succeed.
If you want to know more about offshore companies or wish to gain valuable business insights, we can help. So, get in touch with us today!