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An offshore company is an ordinary limited company registered in a jurisdiction that does not tax income earned outside it. It is not a secrecy product: every jurisdiction below records its beneficial owners, all of them exchange financial account data under the Common Reporting Standard, and most run economic substance rules that ask what the company does and where it is directed from.
It still holds assets under one predictable body of law and ring-fences liability, but it does not reduce the tax you owe where you live. The word is also used to mean simply foreign, which is why people search for offshore company formation in Luxembourg, Ireland or Delaware; those onshore jurisdictions are covered below.
You cannot file the incorporation yourself: in all eight jurisdictions here a licensed registered agent is the filer of record. Two of the six steps regularly send people back to reconsider the first.
The headline rate is nil or close to it everywhere, so it decides nothing and the activity decides everything. Settle three questions before the name: what your counterparties will accept, where the company will bank, and whether anyone will work for it anywhere, because that last one decides where it is taxed whatever the register says.
A licensed agent and a registered office are compulsory for the life of the company. In Panama the resident agent must be a Panamanian lawyer or law firm; in the Marshall Islands it is The Trust Company of the Marshall Islands. The agent files with the registry and holds the beneficial ownership record. Due diligence happens here, not later: certified passports, proof of address and a source of funds narrative for every beneficial owner. Our guide to choosing a formation agent goes further.
The agent clears the name with the registry first, typically in one to three working days. Bank, insurance, trust and chartered are refused without the matching licence. Put the name past the bank too: one implying regulated activity you do not carry on costs weeks at onboarding.
Memorandum and articles in most of the eight, articles of organisation for a Nevis LLC, and for a Panamanian sociedad anónima articles of incorporation in Spanish, notarised. Certificates issue in one to five working days in Belize, Nevis and Seychelles, five to ten in the Bahamas and Panama. The beneficial owner filing belongs to incorporation: since January 2025 the British Virgin Islands agent files particulars with the Registrar of Corporate Affairs, the Cayman provider uploads its register monthly, and the Panamanian and Seychelles agents file into the private systems under Law 129 of 2020 and the Beneficial Ownership Act 2020.
Classify the activity before incorporating, because the classification decides what is reported every year afterwards. The relevant activities are banking, insurance, fund management, finance and leasing, headquarters, distribution, shipping, holding business and intellectual property. Pure equity holding faces a reduced test; an income-generating relevant activity faces the full one: direction and management inside the jurisdiction, with adequate people, premises and expenditure.
Start it in parallel and treat it as a separate project with its own timetable and its own possibility of refusal.
Standard formation runs one to three weeks end to end in all eight. What separates them is the entity, its normal use, the local obligations and what it cannot offer.
| Jurisdiction | Entity | Used for | Tax and substance | Treaties and beneficial ownership |
|---|---|---|---|---|
| British Virgin Islands | Business Company | Holding and joint ventures, the default | No corporate income tax; substance regime since 1 January 2019 | No treaty network. Owners filed at ten per cent with the Registrar of Corporate Affairs, not public |
| Cayman Islands | Exempted Company, LLC, Exempted Limited Partnership | Funds, general partners, SPVs | No income, capital gains or payroll tax; substance notified through the DITC portal | Effectively none. Owners at 25 per cent, held at the registered office, not public |
| Bahamas | International Business Company | Holding, trading, intellectual property | No corporate income tax; Commercial Entities (Substance Requirements) Act for relevant activities | None at all. Owners at ten per cent, held by the agent, authorities only |
| Belize | Company under the Belize Companies Act 2022 | Holding, lower volume trade | IBC exemption repealed from 1 January 2020; Belize source receipts taxed in a 0.75 to 25 per cent band | CARICOM, the United Kingdom arrangement of 1947, Austria. Owners at 25 per cent, filed to the Registrar, authorities only |
| Nevis | LLC and Business Corporation | Asset protection, charging order only | No statutory zero rate: it needs non-residence, no permanent establishment and no local income; annual filing still required | A handful, chiefly CARICOM. Owners at 25 per cent, held by the agent, no public register |
| Panama | Sociedad Anónima | Latin America facing trade, shipping | Territorial: foreign source income untaxed, Panama source at 25 per cent; three directors, resident agent must be a lawyer | About seventeen conventions. Owners broadly at 25 per cent, register made private by Law 129 of 2020 |
| Seychelles | International Business Company, or Company Special Licence | Holding, trading, treaty access via the CSL | IBC at 0 per cent on foreign source income; the CSL trades a 1.5 per cent effective rate for treaty access | About 28, unusable by an IBC without local tax residence and substance. Owners at ten per cent, agent and Financial Intelligence Unit |
| Marshall Islands | Non-Resident Domestic Corporation | Vessels and shipping | Statutorily exempt; the agent is The Trust Company of the Marshall Islands | None. Owners above 25 per cent, recorded with the agent, no central register |
Where that is too slow, the same entities exist already registered: offshore shelf companies transfer in three to seven working days. The case for and against the category is in our comparison of the advantages and drawbacks, and the two most requested names meet in BVI against Seychelles.
Many searches for offshore company formation name a country that taxes companies normally, where offshore only means foreign.
Incorporation is predictable. The account is not, and it is where most of these projects stall. Banks have been withdrawing from non-resident owned companies in these jurisdictions since 2018, and the ones still onboarding are selective. Nobody controls that outcome, so a promised account is a warning sign rather than a selling point.
The bank runs its own due diligence, deeper than the agent’s: certified passports for every director and beneficial owner, proof of address no older than three months, a source of funds declaration, the memorandum and articles, the share register and a registry extract. Some banks onboard remotely, others want a meeting with a director. Allow six to twelve weeks, longer again for an application that goes in cold. What clears it is coherence between the activity, the counterparties, the currencies and the owner’s background.
The account need not sit in the country of incorporation, and often should not: owners of Seychelles and Belize companies commonly bank in Mauritius, the European Union or Singapore instead. Electronic money institutions are a fair fallback for payment flows, but not where you need cash management, credit or dollar correspondent clearing. The document pack is in our guide to opening an account for a ready-made company, with local detail in bank accounts for BVI companies.
Treaty relief is mostly not there. A jurisdiction that charges no corporate tax has nothing to relieve, so it has little reason to sign comprehensive treaties and generally has not, as the last column above shows. The EU parent subsidiary and interest and royalties directives reach none of the eight, so withholding tax in the country paying you is governed by that country’s own law.
Substance also bites unevenly: a passive holding company and a finance and leasing business in the same registry carry quite different obligations. And the company has to be kept alive: the registered agent, the registered office, the annual return, the substance declaration where one applies and a current beneficial ownership record are all continuing obligations. The usual failure is a declared classification that stopped matching the business. A lapsed company is struck off, and restoration takes longer than incorporation did. Upkeep across jurisdictions is compared in our review of where company formation costs least.
Yes. Registering a company in a jurisdiction that does not tax foreign source income is lawful, and owning one is lawful if you declare it. Concealment is not. Most countries require residents to report foreign companies, and the Common Reporting Standard and FATCA send account data to your tax authority automatically.
In seven of these eight jurisdictions a single non-resident can be sole shareholder and sole director, with no nationality or residence test. Panama is the exception: a sociedad anónima needs at least three directors, though they may live anywhere. A licensed agent and registered office are compulsory everywhere.
Not in these eight. Each records beneficial ownership with the registered agent, the registrar or a central authority, and none publishes it. The thresholds are lower than people expect: ten per cent in the British Virgin Islands, the Bahamas and Seychelles, 25 per cent in the Cayman Islands, Belize, Nevis, Panama and the Marshall Islands.
Usually not. The British Virgin Islands, the Cayman Islands, the Bahamas and the Marshall Islands have no comprehensive treaty network, and Belize and Nevis have only a handful. Panama has about seventeen conventions and Seychelles about 28, but a Seychelles IBC cannot claim them without local tax residence and substance, which is why the Company Special Licence exists.
Plan on one to three weeks from complete documents to certificate. Name clearance takes one to three working days, and the certificate issues in one to five working days in Belize, Nevis and Seychelles, or five to ten in the Bahamas and Panama. An existing shelf entity transfers in three to seven working days.
It depends on the activity rather than the country. The relevant activities listed above face the full test: local direction and management, with adequate people, premises and expenditure. A pure equity holding company faces a reduced test. Classify before incorporating, because it drives every annual declaration afterwards.