Offshore investments

Undertaking a commercial or industrial activity creates wealth and employment. However, any business can be carried out only if your investments provide sufficient profitability. With an offshore investment a client can eliminate taxes and make competition to already consolidated companies. On many occasions, the taxation derived from commercial operations, investments and their benefits, is the difference between whether a business is going to be profitable or not, and therefore is the difference between the decision to undertake it or not, to create wealth and generate employment or stay still. In many international businesses it is frequent that the final profitability depends on the use of an offshore jurisdiction that relieves the taxation of operations and creates competitive advantage. 

On other occasions, offshore investments in Latin America or Asia, for example, must be carried out through branches established in offshore territories close to the place of investment to profit from greater legal security, banking and financial experience than in the country of destination of the final investment. The proximity of the offshore jurisdiction is, in these cases, a factor that can be decisive to ensure final success and profitability of offshore investment

Entering the field, not only of possibility but also of reality, big companies use offshore territories for numerous activities. One of them is to raise funds from investors around the world by issuing debt whose returns are paid out of taxes. It is to say, to capitalize operating profits and to mitigate its taxation or, as has been said before, to sell whole lines of complemented products, directly or through the Internet. Another example is worldwide known events and shows. For years, the Formula 1 car championship has been managed through a network of "Trusts", "holding" and instrumental companies domiciled in Liechtenstein and Jersey, two of the best-known offshore centers in the world. 

In the United States, a country with one of the most severe tax regimes, companies have used branches in tax haven for years to sell and distribute products or offshore investments with the consent of the authorities. These are called "Foreign Sales Corporations" or foreign sales companies. Some of the entities, structures and corporate or commercial innovations designed in these enclaves to ease the tax burden are incorporated into the general legislation of high taxation countries: the coordination centers, holding companies.

Another characteristic of offshore investments is the ease of business formation and the absence of bureaucracy. The operating costs derived from the administration, personnel and bureaucratic management of these territories are also very much reduced.