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Income Tax Planning And Establishing Offshore Companies

Every business organization will do everything in its power to implement effective income tax planning methods. In a country like the USA there are plenty of ways in which such income tax planning can be done. One of the ways is for a business organization to incorporate their operations in a foreign country or an offshore location that offers them larger tax benefits. There are plenty of countries all across the world that offer a significantly lower income tax rate and therefore have become attractive destinations for setting up offshore operations. While going in for such an offshore company formation, it is essential that you retain the services of a professional incorporation services firm.

From the beginning of the process, such a firm will have experts who can guide you on the correct processes and methodology to be followed to establish offshore operations. For instance you need to know exactly what kind of an offshore company you need to be establishing. You also need to know which country to do this in. Each country will have pros and cons. For instance, aspects such as a double taxation treaty, requirement of local residents as your directors and the need to disclose financial details or ownership of the company will all come into play when you are establishing an offshore company for the purpose of income tax planning.

If one focuses on the corporate income tax levels alone then it is interesting to see that it can touch a maximum of 35% in the USA but in countries like Bermuda there is absolutely no corporate income tax. Therefore it stands to logic that plenty of companies and business entities will set up their operations in countries such as Bermuda or other destinations which offer either nil or extremely low corporate income tax rates.

Some of the services that a professional incorporation firm can deliver to you when you are looking at income tax planning in this method isto help with the registration of your company. They can also help you open and operate bank accounts, offer their own local offices for the purpose of showing it as your own registered office and they can also help you navigate the taxation systems and other regulatory environments in the country of your choice. You can also open different types of offshore companies such as trading companies, holding companies and investment companies to name a few. International structuring is another aspect that goes a long way in helping you with your income tax planning.

James is a writer and blogger with 5 years experience.
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