The success of modern businesses can be attributed to the deployment of the expert, skilled, and thoroughly experienced professionals. Whether they be legal, financial, or administrative professionals, the services they provide are indispensable to a company’s success.
True Professionals are Highly Paid
There is no shortcut to being an expert in a certain field. Much study and experience are needed before a professional can build his portfolio. Thus, you can’t expect him to provide his services in the cheap.
And that’s their problem. A very high tax rate always accompanies a high income. That is why many professional service providers have set up their offshore companies in countries like Hong Kong, the Cayman Islands, BVI, Seychelles, Samoa, and so forth.
Tax Savings of Offshore Companies for Professional Service Providers
Those who are engaged in providing professional services can benefit immensely if they will set up their own offshore companies. By using this approach, professionals who are in the field of aviation, film and entertainment, construction and engineering, computer, and finance can reduce the amount of tax they are required to pay.
If a professional service provider establishes a personal service company which is based offshore, he could enjoy considerable tax savings. With an offshore company, there is a great possibility that he may not even be required to pay tax on his profit.
Once he realizes certain tax savings, he can then reinvest them in a tax free environment – if he wants to generate additional income from his offshore company.
How It Is Usually Done
The process how this is done is quite simple.
His offshore company can enter into an agreement to supply his services or that of another professional outside the country in which he resides. He can let the service fees he earn accumulate offshore with very little or no taxation in the offshore center.
If he uses the services of a professional, he can structure his payments to this individual in a way that his income tax will be minimized. For example, an overseas employment service provider can increase the individual’s subsistence expenses as against the fees that would be paid to him.
Offshore company formation & registration in Hong Kong and other tax haven countries can be a bit complicated to those who don’t have any knowledge about the process. But there are service companies which offer their help in this regard at very affordable fees.
Matters like pre-qualifications, documentary requirements, and actual processing of business application and registration are the expertise of such companies. Don’t let these rigmaroles prevent you from considering the viability of creating your own offshore company.
But for you to get a working knowledge of the subject, you need to make your own research about the offshore company formation & registration. This will give you an idea on how you can create one, how it operates, and how it will benefit your business.
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