Corporate Resource Guide » location http://www.corporateresourceguide.com Information For Small Business Owners Sun, 30 Oct 2011 19:23:58 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Are offshore corporations legitimate and what are the benefits or pitfalls? http://www.corporateresourceguide.com/differences/are-offshore-corporations-legitimate-and-what-are-the-benefits-or-pitfalls/ http://www.corporateresourceguide.com/differences/are-offshore-corporations-legitimate-and-what-are-the-benefits-or-pitfalls/#comments Fri, 04 Mar 2011 07:27:51 +0000 Robert Montgomery http://www.corporateresourceguide.com/?p=40 Continue...]]> 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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