Company law is one of the most complexes. But the entrepreneurial spirit has always challenged the systems put in place to maximize profits. It is from this last that was born the type of company called offshore. You have probably heard of it in the past but you have not really understood the concept. We are there for that. Indeed, we have an excellent experience of offshoring and we want to share what we know with you. In this article, in particular, we will introduce you to the notion and present you with these best attractions and its flaws.
What is an offshore company?
Legally, it is a company whose head office is abroad. However, we are not talking here about any state, but only about those who have instituted a tax haven regime. For more information about offshore companies, visit the Offshore ciitzen.net site.
Indeed, the company is created in a country where the societary and fiscal legislation is flexible. In general, there is often no social capital required, nor the presence of an officer and you are exempt from tax.
Is it legal in France?
This formula seems suspicious, even utopian for some. And in a sense, it is. But we want to emphasize that this is an operation that fits perfectly within the legal framework. A Frenchman can totally start his business in a tax haven and be exempted from the French tax authorities.
For most business sectors, from liberal professions to international merchandise trade activities, to services provided online, it is allowed. Please still refer to the texts because there are also areas where it is forbidden.
To be able to create an offshore, apart from the list of sectors of activity that we mentioned earlier, you should no longer see the law of the host country more than the French law. If you want to settle in Switzerland, Swiss law will tell you what to do and what the conditions are.
It’s when you live in France that the issue gets a bit complicated. Indeed, being a resident, you are a taxpayer and therefore subject to the Tax Administration. You must be able to prove where your income comes from and if so, that your company is not fictitious.
In this case, to run your business from where you are, you must use one or both of the following methods:
- Or you open a liaison office: it will be a point through which all the mail of your company passes. You will be aware of all that is happening and you will have the means to prove that you are managing well offshore. This office, however, does not have the faculty for commercial operations;
- The other option will be to open a branch: it is a kind of representative office that can carry out any commercial transactions in the name and on behalf of the offshore mother. You will be able to sell to a French audience.
The advantages and disadvantages of an offshore
The attractions are crystal clear. You will not pay the high tax rates that you will have to pay if your company was based in France: Income tax, income, VAT, social contributions …
Be aware that there are limits. Indeed, if you open a branch and you hire on French soil, your plan will change as to the status of your employees. In addition, a second drawback is that offshore companies do not enjoy as much trust and credibility from your partners as if you were based in France.