Anonymous Offshore Company & LLCs

Offshore companies are simply companies which are incorporated outside of the country in which the owner resides. Offshore companies have become popular financial vehicles, as they provide access to different financial and economic landscapes in potentially favourable offshore jurisdictions.

In an attempt to attract wealthy foreign investors, some countries have created friendly offshore financial environments which offer company owners greater levels of privacy, asset protection, and tax optimisation than can typically be enjoyed in their home countries. 

In this article we will explore the use of offshore LLCs for anonymity and asset protection, discuss some of their other benefits, as well as the best jurisdictions in which to incorporate an offshore LLC. 

Table of Contents:

• Using an Offshore LLC for Asset Protection and Anonymity 
• Benefits of an Offshore LLC
• How to Ensure Anonymity in an Offshore Company?
• Multi-Layered Structures
• The Use Of Trusts
• Other Ownership Options
• Best Offshore Jurisdictions for an Anonymous Offshore LLC
• The US as a Jurisdiction for Offshore Company Formation
• Conclusion

Using an Offshore LLC for Asset Protection and Anonymity 

The most common and preferred type of business entity to use for an offshore company is that of a Limited Liability Company (LLC). LLCs are easier and cheaper to form than corporations, can have sole ownership like a sole proprietorship, yet offer superior asset protection and privacy.

LLCs provide limited liability protection to their owners, meaning that they are not personally liable for the company’s debts and expenses, and are thus only exposed to risk to the extent of the capital that they have invested in the company. 

LLCs are also the most popular type of business utilised in offshore jurisdictions and tax havens. These entities can be used as pass-through financial vehicles to protect the identities of owners in the case of private and sensitive activities.

In this age of information sharing, anti-money laundering, and mutual tax treaties, it is extremely difficult to ever obtain complete anonymity through any one financial vehicle. That is why it is best to have a wholistic offshore financial structure with various layers which serve to protect the privacy of the owners and beneficiaries.

An offshore LLC is a central component of an offshore plan which aims to provide both privacy and asset protection. 

Benefits

Some of the major benefits of offshore LLCs in favourable jurisdictions include:

1. Privacy

The primary use and advantage of an offshore LLC is the ability to shield the identities and personal information of the owners. In many offshore jurisdictions, the identity of the owners remains confidential and cannot be accessed in any public records.

In addition, it is often possible to make use of “nominee” shareholders to further protect the identity of the actual beneficial owners of an offshore LLC.

 

2. Tax reduction

An offshore LLC in a tax haven can be used to greatly reduce and optimise taxes if structured in the right way. Many offshore jurisdictions levy little or no corporate taxes on offshore companies.

This does not necessarily mean you will not be liable to pay taxes on the income in your own country of residence, but it can still be used with an integrated tax strategy to legally reduce overall taxes.

3. Asset protection

Limited Liability Companies naturally provide a good degree of asset protection to their owners through their limited liability features. The level of protection that these entities provide can be further enhanced when they are incorporated in certain foreign jurisdictions which are renowned for their asset protection laws.

Furthermore, keeping your assets in an offshore company naturally provides an additional layer of protection, as they are out of reach of local court rulings and creditor claims. 

4. Few ownership restrictions

Offshore company jurisdiction tend to impose very few ownership restrictions. In most popular offshore jurisdictions, the owners of offshore companies can be of any nationality with single ownership being permitted.

Any legal entity can own an offshore company, which means that the owner could be another corporate entity or a trust. 

5. Easy and affordable incorporation

Incorporation requirements themselves are generally quite straightforward and affordable. In many offshore jurisdictions, an LLC can be incorporated in as little as a few days.

6. Reduced reporting requirements

Compared to typical onshore environments, offshore LLCs usually enjoy greatly reduced reporting requirements. Records are seldomly publicly available, and audits / financial report filings are often not required.

How to Ensure Anonymity in an foreign Company?

As mentioned, in the current environment, complete anonymity is not easy to come by, but there are some ways to ensure a greater level of privacy and confidentiality when you incorporate an offshore LLC:

Multi-layered structures

Instead of directly being the personal owner of an offshore company, you can instead take a multi-layered approach where the LLC is just one of the layers.

This typically involves having one or more additional entities which could act as owner of the LLC (either a corporate entity or a trust). These can be based in a separate offshore jurisdiction.  

The Use of Trusts

Instead of housing all your assets inside the LLC, you can instead form a trust to keep the assets and name the LLC as trustee.

This provides the LLC with direct control over the assets but keeps them private as it will not be the legal owner of the assets. Offshore Asset Protection trusts can be formed in countries like Cook Islands or Nevis for the greatest level of privacy and asset protection. 

 

Other ownership options

Some other ways through which to own an offshore LLC include being owned by an investment fund which serves as a corporate director of the LLC, or through another offshore corporation with a professional director.  

Go here more on Anonymous Bank Accounts

Best Offshore Jurisdictions for an Anonymous Offshore LLC

There are many excellent offshore jurisdictions in which to incorporate an LLC which offer the aforementioned benefits. Some of the most popular include:

• Belize
• Nevis
• British Virgin Islands (BVI)
• Bahamas
• The US (specifically Delaware, Wyoming, New Mexico, Nevada)
• Hong Kong
• Panama

The US as a Jurisdiction for foreign Company Formation

It may come as a surprise to many that the US (one of the jurisdictions with the most stringent tax laws) is actually an ideal jurisdiction in which to incorporate an offshore company for privacy.

This is because, while the US is very strict on its own citizens and requires foreign countries to share all information related to US citizens’ financial activities via FATCA and other information sharing treaties, it actually offers good levels of privacy to foreign business owners who incorporate an offshore company in one of its favourable states. 

The most popular US states in which to incorporate an offshore company are Delaware, Wyoming, and Nevada, but few realise that the state of New Mexico is one of the few places in the world which provides access to anonymous LLC ownership. Some of the main advantages of incorporating an offshore LLC in New Mexico include:

• New Mexico does not require the names of LLC owners to be disclosed at all, making it completely anonymous. 
• There are no requirements to submit annual documents or reports, which means a high level of privacy is maintained throughout. 
• There are zero annual fees for owning an LLC in New Mexico.
• A New Mexico LLC provides great tax efficiency as it can be operated as a pass-through entity where the tax liability is passed on to the owner, and thus incurs no additional corporate taxes itself. 

Conclusion

Complete financial privacy and anonymity is difficult to truly come across in this day, with information sharing and reporting on the constant rise. However, there are still many viable ways to increase and maintain greater confidentiality over your assets and financial activity.

One of the most powerful and successfully utilised continues to be that of an Anonymous Offshore LLC. Different jurisdictions offer varying degrees of privacy, so it is important to choose one which best suits your needs while providing the level of anonymity you require. The US state of New Mexico is one of the best options available, however, there are also many others which offer their own unique benefits. 

We recommend you consult with a trusted advisor who can help you determine the best jurisdiction for you to incorporate your offshore LLC, as well as the best multi-layered offshore protection plan to use.