Offshore companies are the subject of a persistent misconception. Many assume that the choice to form a business overseas is made to hide illegal activity. Fanned by media reports, there is a sizable portion of the public that believes offshore companies have only one purpose: to conduct criminal activity. The truth is that there are many legal benefits to locating or relocating a business overseas. There are two major benefits worth noting here. The first is a reduction in the tax burden carried by the business. This is not tax evasion, but rather tax avoidance. It is not only legal, but a sound strategy for furthering almost any business interest. The second is asset protection. A business may need to partition or protect certain assets as the result of a complex financing transaction or other legitimate asset structuring plan.
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