Why using a foreign holding or trading company?
Some of the motivations for individuals and corporations to utilise foreign holding or trading companies include the desire to:
Motivations
- Reduce tax;
- Protect assets;
- Manage risk;
- Maintain privacy;
- Avoid bureaucracy.
Reasons and advantages
More broadly, the reasons for choosing certain countries for the establishment of holding-, trading- or other kind of companies include:
- Anonymity and confidentiality;
- Low or no taxation;
- Exchange control, free remittance of profits and capital;
- Secure banking systems;
- Banking privacy;
- Access to double tax treaties;
- Security of property rights;
- Access to foreign insurance and reinsurance;
- Customs and duty exemptions;
- Foreign investment inducements;
- Tested legal systems;
- Higher yields and returns;
- The availability of sophisticated banking facilities;
- Political stability.
|