The tendency to protect financial affairs and achieve the highest degree of confidentiality has started at the beginning of the XX century, and nowadays more than the half of the world’s capital is kept offshore.

During the years offshore legal environment has lived many changes and today it provides a secure and solid base for conducting a business activity.

There is no single definition of an offshore jurisdiction, but most of them unite such element as being outside of control of a high tax authority (mainly Western countries). Saying by simple words – offshore jurisdiction is represented by any country outside one’s country of residence. So, for a French citizen BVI is an offshore country, but for a BVI resident – France is an offshore jurisdiction.

Obviously, in terms of tax maximization BVI provides major advantages then France – that is why it is of a vital importance to address your financial consultant in order to find the jurisdiction that most fits your goals and objectives, that will help you work out and define the most advantageous solutions exactly to your needs.

There are more than 80 offshore jurisdictions that provide taxation facilitations and advantages, high level of privacy and other business benefits. However, it is important to remember that each jurisdiction has its own rules and norms to follow which are necessary to know and understand. It is a mistaken opinion to believe that „there are no taxes in an offshore jurisdiction”, there are some countries where direct taxes are absent, while in others taxes are due to be paid in various sectors and for various reasons. Although those taxes are lower than those of an onshore country.

Offshore jurisdictions have a sovereign power to make, adjust and reinforce their own laws, and in recent times there is a trend of offshore jurisdictions uniting into international organizations for even a more effective cooperation.

Offshore jurisdictions are usually called as tax heavens, no tax jurisdictions or fiscal paradises. Of course, as any country, also offshore jurisdictions need revenues and often high indirect duties such as import duties are characteristic to them.

It would be more correct to call offshore countries as low-direct-tax jurisdictions, as indirect taxes are still applicable almost everywhere.

A company incorporated in such a tax favorable environment should apply for a tax exempt status available in a concrete jurisdiction, as it will let the company pay a nominal amount of money on the annual basis instead of paying taxes on revenues as it often is practiced in high tax jurisdictions.

Moreover, offshore jurisdictions are exempt from exchange control regulations that can significantly facilitate business activities. Freedom of movements of funds accompanied with moderate costs and asset protection are the important aspects of the offshore environment attraction to always a bigger amount of potential clients.

There is a mistaken idea on an offshore environment to be mysterious, illegal, dangerous or unregulated. All offshore as onshore countries have their own legislation and jurisprudence that is necessary to know well in order to follow all the laws in the appropriate way and conduct a business on 100% legal basis. Diverse countries provide different opportunities and advantages to different companies and business ideas. It is important to explore, analyze and choose the one that suits you in the most appropriate way, but any business can find its own advantages offshore.