What is onshore?

Onshore means all investments made by a company or individual in its high tax country of residence. The main difference between onshore and offshore is essentially a tax regime. Offshore are jurisdictions where non-resident companies or individuals pay 0% or less than 10% tax. The examples of this kind of jurisdictions are Cayman Islands, Belize or Saint Vincent and the Grenadines. Onshore are jurisdictions where all taxes are paid regardless of whether the company or an individual is a resident or not, carries out its business activities within these jurisdictions or outside its borders. Clear example of this kind of jurisdictions is Germany, Switzerland and Spain.

The main advantage of going to onshore is the status it will have when providing a client with the fiscal data of your company and an account number of an onshore jurisdiction. Since your client will see that your company and account number are from the country of high taxes with the relevant regulations assigned he will be able to deposit more trust in your business. Due to the public opinion it is not the same to bill a client with an onshore company incorporated in Delaware, Cyprus or the United Kingdom or through a company incorporated in Belize or Seychelles. The customer's perception of an onshore is much more pleasant than of an offshore. Another very important advantage would be the high number of double taxation agreements signed by onshore jurisdictions with other countries.

The main disadvantage of going onshore is the regulation that high-tax governments charge on corporations and bank accounts due to the requirements to keep accounting, auditing and presentation of taxes. The biggest disadvantage facing the onshore is undoubtedly the payment of taxes to which offshore companies are subject, however, there are some onshore jurisdictions that have a low corporation tax such as Cyprus, Ireland or the Netherlands. Anyone can go to onshore at any time. There is no type of illegality to open a company or bank account in an onshore jurisdiction. According to European Union regulations, any Euro-citizen can develop any type of business in the EU.