Incorporate Offshore - The 2.5% Solution

Certain businesses which take place wholly or partially outside of Canada may gain many advantages by incorporating offshore, in jurisdictions other than Canada or the United States. Tax and regulatory environments in many countries are far more favourable than in Canada. Unfortunately, a number of traps for the unwary exist, because Canada and other high tax jurisdictions seek to prevent "tax leakage" to lower tax jurisdictions. An additional problem is that offshore incorporation has obtained a bad reputation because some individuals have used "tax havens" and "secrecy" for improper purposes. You also have to be careful in your choice of advisors. (If you are a victim of these advisors who promote secrecy we have a $995 plus tax package to advise you what is wrong about this type of advice and what to do about it if you fear you are trapped in a the secrecy sinkhole which leads to jail.)

Offshore Corporation Good for Canada!

Offshore corporations used to earn active business income outside of Canada are good for Canada. Offshore corporations enhance the competitiveness of Canadian corporations and provide a strong incentive for Canadian corporations to go out into the world and earn active business income then to bring that income back to Canada. If you structure your businesses properly and follow certain simple common sense rules, dramatic advantages are available from offshore incorporation. Capital invested offshore into active business tends to grow at a much faster rate because only a small fraction of the income is taken by governments instead of the higher proportion of the income that is taken by governments in high tax jurisdictions.

Of course, gaining advantage and opportunity come at a price. Compared to domestic corporations, the cost to start and properly maintain offshore corporations is costlier by thousands of dollars, and the choice of jurisdiction and structure is far more complex.

At INC Business Lawyers we are seeking certain types of businesses to assist which we know can gain dramatic advantages of offshore incorporation. If you are considering using offshore structures we can help. 

Here are a few simple screening questions to ask yourself to help you determine if you might benefit from our services in incorporating your business offshore:

• Do you have a corporation in another country and you are considering starting a corporation in Canada but are reluctant to do so because you have heard that Canada is a high tax country?
• Will your business earn in excess of $100,000 in the near future? Is the source of income wholly or partially outside of Canada?
• Do you seek to use your offshore corporation for legitimate purposes and are you willing to conduct your business following certain simple rules?
• Are you willing to pay tax on the income you bring back into Canada for personal use or which you spend for personal use outside of Canada?
• Are you willing to use professional advisors to guide you in this complex area?

When to set up an Offshore Corporation

The best time to use an offshore structure is before the business has started operations. We suggest that you contact us early in the business planning process. 

Corporate Tax rate of 2.5%

We focus on providing Barbados incorporations for our clients because it has the best tax treaty with Canada. Under the treaty your new Barbados International Business Corporation will enjoy a corporate tax rate of 2.5% and you can return the remaining profits back to your Canadian corporation tax free. 

We charge US$1,995 all inclusive for a Barbados IBC and the cost of the registered office services provided by a Barbados attorney-at-law we work with costs US$750 per year. Your Barbados IBC must also obtain an IBC license which costs US$250 per year. For more information about incorporating in Barbados or offshore corporations generally call Stuart Moir at 604-272-5474 or e-mail stuartmoir@incorporate.ca