The global economic crisis: opportunities or barriers for offshore companies registration?
Experienced businessmen already now understand that the current economic crisis will inevitably lead to higher taxes. For small and medium-sized businesses already affected by an unexpected pandemic, repercussions could become fatal. Hence, many of their owners are beginning to think seriously about how to open an offshore company in 2020.
The main advantage of such a company is that, according to the current legislation, it pays virtually no taxes in the territory of the country of its registration, thus significantly reducing the financial burden on its owners.
Advantages of Offshore
- Favorable taxation;
- The principle of anonymity that applies to actual business owners;
- Simplified procedure for submission of financial statements;
- Lack of obligations of entrepreneurs related to the activities of their company;
- Simplified registration procedure;
- Relative political and economic stability.
Opening an offshore in 2020 is also relevant for expanding the market for goods and services produced by the company. With the decline in people's ability to pay due to unemployment and the global economic crisis, it is crucial for entrepreneurs to expand the audience of their potential consumers, and it is best to do so by entering the international market.
The company's presence in an offshore zone is not reprehensible at present, but there are serious dangers behind the obvious advantages of this economic zone. In the context of the pandemic, the governments of most countries promptly amend existing laws to make them stricter, or vice versa, weakening the requirements for local and foreign entrepreneurs.
To get a good profit from the future firm's activity, a businessman needs to clearly understand which of the possible jurisdictions best corresponds to the specifics of its activity, and to make an emergency plan in case of a risky economic situation. Expert assistance in market analysis, organization, and support for the firm’s operation can be obtained at IT-OFFSHORE. Our specialists have solid experience in this field, and the offshore registration in 2020, with their support, will go quickly and smoothly.
Why not be afraid to open an offshore company in crisis?
- Economic development is cyclical, and each recession will inevitably be replaced by a rise. If the company can operate in adverse conditions, it will bring impressive profits to its owner during the period of economic growth;
- The crisis opens up new opportunities for the brave: competition decreases, weak players leave the market, rental costs drop, state benefits and subsidies appear;
- In the face of growing inflation, an offshore business will be a good tool for preserving and increasing the entrepreneur's own capital.
It is safe to say that the global economic crisis of 2020 should not be the reason for refusing to open an offshore company, but it will require much more flexibility and financial literacy from the entrepreneur. In these difficult times, it is not worth starting your own business abroad with only borrowed funds, given that the basis should be equity capital.
Businessmen need to "keep their hand on the pulse", track the slightest changes in global market trends, quickly occupy emerging niches that previously seemed unprofitable, and, despite all efforts, be prepared for the fact that at any time their business may begin to need optimization or reduction measures.