Offshore in America

American offshore is commonly referred to as companies that are registered in special tax zones in the U.S., which allow the use of favorable tax conditions and ensure the confidentiality of data of business owners.

What are the benefits of registering a legal entity in the USA?

Among the advantages of registering a legal entity in the United States are:

• the rapid industrial and technological development of the state;
• favorable and stable economy of the country for foreign business;
• flexible legislation that regulates entrepreneurial activity;
• safety of capital and protection of investments made in a new company;
• the possibility of registering a company in an American offshore zone.

The prospect of doing business under favorable tax conditions attracts thousands of foreign investors every year. For entrepreneurs, this is a great opportunity to start their own business, while the state receives millions of dollars of investment in the local economy. Offshore can be useful to foreign investors in any sphere of employment (trade, IT, fintech, industry), as it is usually used to ensure the confidentiality of data and the safety of the firm’s capital.

Features of US offshores

The concept of offshore in the United States exists within the framework of federal legislation and does not apply to the entire territory of the country. Individual states have the right to create special zones with flexible conditions for company registration and preferential taxation for foreign investors. The word “offshore” does not appear in state regulations, so it is important to understand the terms of local legislation to take advantage of the benefits of doing business in these zones.

Special conditions for foreign investors exist due to multi-level legislation. Federal regulations in each state may provide for separate “tax havens” and favorable regimes to attract foreign entrepreneurs and stimulate the local economy.

Despite the absence of classic signs of offshore (as, for example, in other countries of the world), the U.S. business environment is characterized by its prestige and general reputation. Firms registered in the American jurisdiction are characterized by trustworthiness, which in turn simplifies cooperation with other companies and foreign partners.

Offshore zones in the USA are limited by the terms of the legislation of a particular state. For example, Delaware offers favorable conditions for registration and business activities of legal entities in the form of Limited Liability Company (LLC). Similar low-tax jurisdictions operate in Nevada, Oregon and Arkansas.

How to set up an offshore company in the USA?

Foreign entrepreneurs who are not residents of the United States most often choose to register their business as an LLC in an offshore zone. The step-by-step process of creating a company in a low-tax jurisdiction consists of the following steps:

1. Choosing a specific state.
   The conditions of business activity are determined by federal legislation, so it is important to decide on the zone of registration. Delaware is usually the most promising option for offshore companies. In order to register a company, it will be necessary to provide a legal address. Alt-industry specialists will help to solve this issue without the need to open a real office in Delaware.
2. Selection of the form of legal entity.
   For registration of offshore companies in the USA usually choose Limited Liability Company. This form of company allows you to create a business with several founders, manage it remotely and not to form an additional board of shareholders. The owners are not responsible for the activities of the company with their own property, which protects their private assets from possible risks.
3. Company registration.
   To open your own business, it is necessary to collect the required package of documents, according to the state legislation. Usually, it is enough to provide information about the founders of the company (identity card and certificate of criminal record), as well as information about the future activities of the company (memorandum of association). The cost of registration, as a rule, is about 1000 USD. You should also take into account additional costs for the preparation of documents. The simplest and most inexpensive procedure for registering a legal entity operates in the state of Delaware, which makes it a favorite among foreign entrepreneurs.
4. Registration with government agencies.
   The established company should apply to the U.S. Internal Revenue Service to obtain a corporate payer identification number. If the activity of the future company requires additional permits, it will be necessary to request a license.
5. Registration of a corporate account.
   The company representative will need to go to one of the local banking institutions with the company’s documents. The corporate account will be needed for internal settlements and payment of taxes, as well as transactions with partners and clients of the company.

Comparison of US offshore with other jurisdictions

The main feature and advantage of companies that are registered in special zones of the United States, is the reduction of the tax rate on income received by non-resident firms outside the United States. That is, a company with foreign owners, which is registered in an offshore jurisdiction of the United States and operates outside this state, can enjoy favorable tax conditions.

Also, a distinctive feature of US offshore is the absence of mandatory filing requirements in case of zero income in the country (for example, in Delaware). Some states do require filing a blank standardized statement of no profit for the current accounting period. In each case, this saves considerable time and accounting service costs.

Compared to Malta and Cyprus, where a minimum income tax is still present, offshore companies in Delaware are exempt from paying in the case of business activities outside the United States. Among the advantages of U.S. offshore companies, it is also worth considering the flexible conditions of legalization and obtaining documents for immigration to the state for the owners of the firm.