Incorporating in Delaware

Offshore Company in Delaware

An offshore company in Delaware refers to corporations that are incorporated in the US state of Delaware for use outside the jurisdiction of both Delaware and the United States. An offshore company is formally called and IBC or International Business Company, and is typically used for overseas trade and reducing tax obligations since offshore companies or IBC’s are tax free entities.

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An offshore company in Delaware may be identified by a different name in certain jurisdictions. For instance, in Mauritius an offshore company is known as a Category 2 Global Business Company, in the British Virgin Islands – BVI Business Company, and in Nevis – Nevis Business Corporation. The basic concept of the offshore company in Delaware is standard in all offshore jurisdictions, with similar offshore company incorporation procedures and prerequisites, offshore company structures and laws.

Besides the IBC, other offshore company forms include the Limited Liability Company which is popularly known as the LLC, as well as the Limited Partnership (LP) and the Limited Liability Partnership (LLP). Delaware offshore companies and LLC’s are used for international business just as ordinary offshore companies, but these two Delaware companies have distinct legal structures and are chosen based on the specific needs of an investor as to which type of offshore company in Delaware is most suitable.

Offshore companies in Delaware are formed for the main purpose of being able to trade internationally; that is, to expand sales to alternative markets, to do business with an entity that is tax free and helps to reduce overall tax expenditure, to protect assets and to get more privacy when doing business. A Delaware offshore company has these benefits which are specific and constitute what can be considered as the comparative advantage of an offshore company in Delaware over an ordinary domestic company.

Offshore companies are created in offshore havens or jurisdictions. Delaware company incorporation involves meeting certain requirements that are legally required, such as filling out certain application forms, preparing a memorandum and articles of association, submitting identification documents, and filing relevant forms and documents with the jurisdiction’s registrar. All of these are required for incorporation offshore companies in Delaware.

Delaware offshore company formation is administered by agents, which are either individuals or companies that are licensed by the relevant authorities of the jurisdiction. Usually, the authorizing authorities may entail the Financial Services Commission (FSC), as is called in most offshore jurisdictions. An agent for Delaware company formation must be licensed and authorized and must meet certain financial, professional and legal prerequisites in order to be licensed. One would normally find, therefore, that agents for offshore companies in Delaware are lawyers, accounts and other business professionals.

The main duty of the agent to the offshore company in Delaware is to submit all necessary documents to the registrar for company incorporation. Other documents such as minutes, share and director registers, first board resolution appointing first directors and share certificates are prepared by the agent of Delaware companies offshore.

Delaware offshore companies must be registered with a name. Names chosen for offshore companies in Delaware must be unique and cannot be too similar to that of another offshore company as this may cause confusion or can be seen as intent to mislead customers.

An offshore company in Delaware is a legal person and thus exercises the rights of a ‘person’ in being able to sign contracts, take and give loans, take legal action, open and manage bank accounts and trade independently. Offshore companies in Delaware are entities separate from their owners.

Delaware offshore companies are ideal for lowering tax burden and offshore company incorporation simpler than normally imagined.

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