What are offshore zones?
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Uncontrolled turnover and money laundering is one of the main challenges of the modern financial world. It is worth noting that, despite the efforts of the official authorities and the establishment of international institutions working in this direction, the flows and the total amount of shadow capital are growing, and they do not lend themselves to control mechanisms. Especially often, they find themselves in the so-called offshores, the phenomenon of which will become the theme of our story.

Answering the question of what offshore zones are, one must understand that they can include both entire states and their individual sections. In these zones, non-resident organizations are entitled to apply preferential tax conditions. In addition, registration and obtaining a license for financial activities are also carried out according to a similar principle. Offshore zones are sometimes effective, and sometimes the only mechanism for filling the budget of individual states.

The above procedures are standard, but they all take place subject to the condition that a territory outside such a zone has been selected for commercial activity. The second name for these territorial entities is "tax haven". When classifying offshore zones, the degree of secrecy of information about the founders is taken into account. In addition, the conditions for such types of reporting as accounting and tax are considered.

What are offshore zones? This is the place where the use of low interest rates on profits is practiced. At the same time, the state does not exercise control over the circulation of currency. In other words, transactions made in foreign currency on the offshore territory cannot be verified. As required by the legislation in force there. By and large, offshores are an opportunity for beneficial storage of capital (including illegal) for its owners, but a very bad phenomenon for states, from the zone of financial influence of which there is an outflow of considerable cash flows.

Learn more about the benefits that the offshore zone provides to companies

For companies, the procedure for registering a company has been significantly simplified and accelerated. It is accompanied by the payment of a very small amount of money. In Panama, for example, there is no need to provide details of the founders. At the same time, the amount of the annual fee charged when a company is re-registered can be called purely symbolic.

World offshore zones do not give permission for non-resident legal entities to carry out any kind of mercantile activity on their territory. Thanks to this, it is possible to protect the national business. Many offshore companies, as a prerequisite, put forward the requirement to create so-called secretarial bureaus of non-resident companies. At the same time, local residents should work in them.

The maintenance of such secretarial offices is one of the components of offshore income. It includes the following boards:

For renting a room.
For electricity.
For the connection.
For the salaries of employees.
For food.
Accommodation.
For transport.
In addition, offshore zones receive tax deductions, fees and charges for registration, re-registration, licensing, and more.

Separation of offshore companies depending on taxation

In almost all offshores, tax exemptions differ from each other. They can be roughly divided into 6 categories:

Zones with zero taxation, considered classic. Companies located in such offshores are not required to pay taxes. They only have to pay a one-time fee once a year.
Areas in which taxation is based on a territorial basis. At the same time, only the profit that is received within its limits is taxed.
Offshore zones exempt from taxes for certain types of activities. They present a special document to each entrepreneur who has expressed a desire to register. It contains all types of activities that are not taxed in this zone.
Areas in which taxes are charged individually on individual individuals. Cyprus belongs to such zones today. Here it is necessary to resolve the issue of full or partial tax exemption on an individual basis.
Low taxation zones. This type of offshore does not provide for the abolition of taxes. But at the same time, their size is so low that sometimes they are even lower than the one-off fees practiced in other zones.
A short excursion into offshore zones can be regarded as an attempt to find an answer to an interesting question for many: what are offshore zones and why capital outflow in them is growing every year.