In the broadest sense, offshoring is the practice of moving a company from one country to another. In a narrower sense, it has several connotations. Oftentimes, companies will go offshore because the taxes or the governmental structures in their home country are not conducive to business. The business might struggle because the taxes are too high. The business might also struggle because the political headwinds are blowing in a highly regulated manner. Or a political system might be unstable making business difficult or impossible. Unstable conditions are not good for companies. However, many people offshore their companies simply so they can keep more of their money and pay lower taxes.
Offshore VATs
One of the biggest taxes a business or an individual has to pay is the value-added tax (VAT). This is the tax that is added to items as they change hands. So, if something moves from a materials supplier to an assembler to a distributor and then to you, it could be taxed four times. Each time it is taxed, it is taxed at a higher rate. If you move your company to Switzerland, you can register for a Swiss VAT. The value-added tax on Swiss goods is often much lower than other countries. This is especially helpful for companies that move from the UK. Company formation in Switzerland has many benefits beyond just the VAT as well.
Company Bank Accounts
If you have bank accounts associated with your company they can also be taxed. There are corporate income taxes, private income taxes, business taxes, property taxes, capital gains taxes, and much more. All of this can be taxed on a territorial basis or a global basis. There are many different laws, especially if you are dealing with income from different countries. It is often much easier to put your earnings into a bank account in Switzerland that is private and confidential. That way, you can organise your funds and pay your taxes without the oversight of a government, or dozens of governments. You can also avoid your taxes completely if you want to. Many companies do it for as long as they can.
Other Taxes
As mentioned earlier, there are more taxes than just your basic VAT. There are also taxes that apply to businesses and to business owners. All of those taxes add up to a lot of money you have to pay to keep your business on the right side of the law. Therefore, by moving to a place with significantly lower taxes, you’ll be able to save a lot of money. One way to do that is by forming a company in Switzerland. However, it’s not easy to form a company in Switzerland. Your best option is to rely on experts to help you form your company and keep it legal.
