Most small corporations should not be looking to incorporate offshore. First, if it is done for tax purposes, you are likely to substantially increase your odds of getting audited by the IRS since there are many offshore tax schemes that are not legitimate.
If you are a US citizen and earn income from an offshore corporation, you are obligated to pay income tax in the US on that income. Trying to hide it in an offshore corporation will likely be viewed as tax evasion.
If you are looking to incorporate offshore for liability protection, there are several important considerations. First, in order to protect assets, you will need to transfer the assets into the offshore corporation, which will likely involve moving them to the offshore country or location.
There are a lot of horror stories about people losing their assets in offshore companies. You need to be very careful about whom you trust and whom you do business with. Secondly, you will be dealing with laws from another (offshore) jurisdiction that may be considerably different than the local corporation laws or US laws that you are used to.
In most cases, the risk and effort in setting up an offshore corporation will outweigh any potential benefits you might receive.
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