Common Offshore Incorporation Mistakes to Avoid
An offshore incorporation can allow your business to benefit from a number of advantages. From tax benefits to asset protection, your business can thrive in an offshore jurisdiction in many ways. Taking your business offshore can be a quick and easy process. However, it can also be painstakingly difficult when you encounter common offshore incorporation mistakes. Make the offshore incorporation process as painless as possible by learning from these common mistakes that some business owners have encountered.
1. Choose the Right Jurisdiction
When selecting a jurisdiction for your offshore incorporation, you must research the location before incorporating your business there. Selecting a jurisdiction depends upon your business’s specific needs—and not all offshore jurisdictions are the same.
There have been many instances when merchants came to us already incorporated and expected to open a merchant account in their jurisdiction. However, they quickly learned that they spent a great amount of time and money on their offshore incorporation only to find that they could not establish a merchant account in that jurisdiction.
While being exempt from taxes may sound ideal, be sure to find a merchant services provider prior to incorporating your business offshore. Not only do you want to ensure that you can open a merchant account, but you also want to ensure that your merchant account will offer you all of the credit card processing options your business needs to thrive.
2. Know the Local Laws
Just like in your country of residence, you need to know the laws you must follow when you apply for an offshore incorporation. For instance, some offshore jurisdictions require merchants to provide a business license in order to apply for a merchant account while others do not. You must also understand what that jurisdiction requires in order for you to incorporate your business there.
Additionally, make sure your jurisdiction has a double taxation treaty with the countries where you will be accepting payments. This step is to help you avoid paying taxes twice on your profits.
Business owners can easily avoid these first two mistakes by hiring a reputable consulting firm like Healy Consultants Group PLC that specializes in offshore incorporation services. The company will know all of the requirements you need to meet and will have details for you on different jurisdictions. This will also make the offshore incorporation process much quicker and less expensive.
3. Know Your Acquiring Options
Now that you have done the research on your preferred offshore jurisdiction, know your acquiring options. Work with merchant services providers that provide offshore merchant accounts and inquire about their offshore locations. If you wish to incorporate your business in Malta, then you would not want to work with a merchant services provider that only incorporates businesses in Cyprus and Panama.
Additionally, it is wise to get quotes from three or four merchant services providers so you can determine what company can best serve your credit card processing needs and budget.
As a business owner, it is imperative for you to understand that you can obtain a pre-approval for your offshore merchant account before the offshore incorporation takes place. Once you receive your pre-approval, then you can incorporate your business in that jurisdiction.
4. Choose the Right Offshore Services
To have a positive experience when taking your business offshore, choose a reputable merchant services provider and offshore incorporation firm. Together, the two will make it seamless for you to begin processing credit cards in your offshore jurisdiction. You will encounter little disruption to your business and start reaping all of the benefits associated with an offshore incorporation.
Author Biography: Chelsey Bell is the assistant copywriter at Instabill Corporation—an offshore merchant services provider located in New Hampshire, USA. Instabill helps e-commerce businesses worldwide establish affordable and reliable online merchant accounts. Be sure to check out additional e-commerce tips at the Instabill Blog.