General Knowledge About Offshore Companies

Why are those tax haven countries interested to register tax-free companies?

To start with, most of tax haven jurisdictions are small countries with small populations. So even relatively small amounts of money can make a difference. The visible part of the iceberg is represented by the direct registration duties and annual renewal fees paid to the government by all those offshore companies. Even a $100 government duty, multiplied by hundreds of thousands of non-resident companies who pay it annually without ever burdening the country's infrastructure, yields millions of extra budget revenue. But the invisible part is much bigger. That's the volume of professional fees paid by all those offshore companies to local Registered Agents, company managers and administrators. That's the money settling down and turning around in offshore banks, insurance companies and investment funds. All in all, a successful offshore financial sector may provide jobs, education, careers and income to a whole lot of people. The offshore services revenue will create demand for quality telecommunications, office space, computer equipment and software, furniture and business supplies. Ultimately, the offshore revenue will filter down into all consumer sectors of the economy. The result is notable increase in overall prosperity, which, in turn, strengthens the self-determination of the country – in particular, it's ability to withstand pressures from foreign governments and international organizations.