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Tax Engineering

How can I buy an offshore limited company?


Question

How can I buy an offshore limited company? What is a limited company? Which types of companies are the most important? What are the advantages and disadvantages when buying a limited company? Is it legal to buy a company?

Answer

When you buy a private limited or a ready-made company you must take into account many factors and first of all you have to take your time to investigate what exactly you are buying. Limited private company is a figure of Mercantile Registry in which the partners (individuals or legal entities) buy shares of capital stock of a company through shares. These shares may have different and favored values as set out in the articles of incorporation of the company. The key feature of private limited company is the responsibility for the debts of the shareholders to the company: the shareholders are in no way responsible with their private assets for the debts that the private limited company may have and will only respond with the capital provided at the moment of its formation. 

Case Study: 

Three partners register a private limited company with a share capital equal to 100,000 USD and a property in Panama registered in the name of the company. Each partner has 2 flats in their names (as individuals). The private limited company carries out activities in the country where it was registered and gets into the debts amounting to 250,000 euros. In a case of a lawsuit due to the debts to the bank by default only the share capital (100,000 USD) and the property in Panama may be seized. However, the bank cannot seize the flats that the partners have as individuals because the shareholders do not respond to the debts with their personal assets. 

A key feature that has to be taken into account when buying a private limited company is its opacity. Depending on the jurisdiction where it is incorporated, it can give to the final beneficiary more or less anonymity. Also it is essential to contract a liable lawyer in a case if the private limited company in going to issue bearer shares and thus hide the identity of the shareholders.

To buy a ready-made private limited company is a safe, quick and easy process, the most important aspect of which is to consider the reputation of the law firm that registered the company and verify that the company doesn’t have accrued debts that you will contract once becoming a new owner. Depending on the country where it is registered, the newly purchased company can be written in your name within 24 hours without the need of your physical presence. The most common jurisdictions to buy private limited company with high share capital and bearer shares are Belize, Seychelles and Panama. 

Advantages of buying a private limited company

The main advantages of buying a private limited company are: 

  • Anonymity of shareholders through bearer shares 
  • No paid in capital is required
  • Company formation is carried out without your physical presence 
  • The company can be registered within 24 hours and you can start a new business quickly.  
  • Pay a fixed price for your company formation and avoid surprises. 
  • Ready-made company will let you to hide the identity of its founder 
  • Broad list of corporate objectives for any commercial activity 
  • Ideal for entrepreneurs who want to set up a company and do not have much money to invest. 
  • No requirements to present accounting records or auditing 

Disadvantages of buying a private limited company

The main disadvantages of buying a private limited company are the following:  

  • You have to take time to investigate the background of the company, its previous activities and debts history.  
  • Check who was the founder of the company and if this person appears in any blacklist of any country.  
  • Verify if all the government seals are paid and the company is ready to operate.

offshore private limited company



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