Business Management - The Simple Offshore Service

Apart from registering the company in the first place and preparing its documents, the only ongoing services are the Registered Address and Resident Secretary.

Registered Address and Resident Secretary are the mandatory minimum domiciliation services. Any company registered in Gibraltar is required by the law to have a local address (Registered Address) and a legal agent in its country of incorporation. The Resident Secretary essentially serves as an intermediary between the owner of the company and the Gibraltar Government. In this capacity the Secretary arranges for the formal annual renewal of the Company with the Government Registrar. This service is provided by us as standard. Without it, the company cannot legally exist.

Shareholder

In a Basic Company, the actual Client would be directly registered as the Shareholder and the Director. Thus, the client would clearly and publicly appear as the owner and controller of the company. The information of who are the registered shareholders and directors of the company is not confidential. In Gibraltar, this information is directly filed at the Registrar of Companies, showing the names, addresses, nationalities and occupations of the registered shareholders and directors.

Being directly registered as a shareholder to an offshore company makes the person clearly linked to that company. This may cause punitive taxation if such offshore company enters into business with the domestic company of the same client (the concept of "related enterprises"). It may also involve the client being requested to report and pay tax on his personal income from such foreign shareholding.

Director

With a Basic Company the client would also serve as a Company Director. In this official capacity the actual client would fully and personally operate the company - sign in bank accounts, issue invoices, sign all contracts and correspondence. Similarly as with being a shareholder, serving as a Director to an offshore company raises serious legal problems. Again, the offshore company may be considered as legally "related" to the domestic firm of the client. Serving as a Director of an offshore company raises the important legal question of the place of management and control of the company. Many high-tax countries will consider that any company becomes taxable where it is managed and controlled - and this is usually where the company Directors reside. So, if the client serves as a Director of an offshore company, he may be requested that his offshore company reports and pays full domestic tax on its worldwide income. This would usually defeat the whole purpose of having an offshore company.

Communications

With a Basic Company the client would be unable to use the address of the Company for receiving or sending out any routine business correspondence because the Registered Address is not intended for that purpose. The Registered Address does not include any local telephone or fax number for use by the Company. Therefore, the owner of such Company would have to use his own personal or business facilities to conduct correspondence for his offshore business. This could facilitate confusion and would also clearly identify the Company as really "offshore".

While having all of these drawbacks, the Basic Company may still be useful for some self-employed globally-mobile individuals who would use the offshore company merely as a separate corporate body to conduct their international activities. In some circumstances such owners may afford not be concerned about being openly registered as shareholders and directors of an offshore company. In these special cases, they would enjoy minimum maintenance cost and a very straightforward company structure.

For anyone else a proper management system of the offshore company should be established. This can include the services of a third-party shareholder, a third-party director, an account signatory and various communications services.