Why use an offshore company in India?

by Jhon Harry Digital Marketing

Often it is thought that creating an offshore company is forbidden in India. Yet, you can start a business wherever you want from the moment you comply with the rules in force in the country. Next, do not forget to declare to the tax authorities, that you are the owner of the company to avoid being caught under the crime of tax evasion. Back to the definition of the offshore company

An offshore company is a company established abroad but has no economic activity in the country concerned. Most countries offer benefits to these types of companies with often minimal regulatory constraints, no obligation to keep accounts, tax advantages, and confidentiality. If it is not necessarily easy to learn about the conditions of creation in some countries many companies assist you in the creation of your offshore company or your offshore company account.

Reasons to create an offshore company

If one often imagines illicit reasons for doing an offshore company, this is not necessarily the case. Already, you can, for example, use this technique especially if you want to make a redemption and you do not want the competition is aware. This is a common practice in some multinationals that keeps confidentiality in the context of a merger for example until the last minute.

Most of the time, it is legal tax optimization (not to be confused with tax evasion), just as there are many in India through the Pinel, Malraux laws It is above all to benefit from the regulations often very favorable with low taxation of the country where it is located. This avoids taxation of the country of origin. In other words, it is a question of ensuring that profits are declared in the territory where there is almost no or no tax on them. You increase your profitability.

In India, for example, the IS or Tax on the Company is generally 33% of the profits made by your company. An offshore company allows for example to have a tax reduction or no tax on profits. Sometimes it is simply to facilitate management especially if you do not want to make your public accounting or the lack of requirement on start-up capital.

Attention all the same!

Still, if it is not necessarily illegal, it will even take into account that it is not very moral. So yes, a lot plays on the flaws of the system and especially the lack of financial transparency. If you want to defraud the tax, it can quickly become dangerous for you. But if you simply do not want to have a problem, we can only recommend that you declare it to the tax authorities, which will include it in the calculation of your corporation tax.

Confidentiality and anonymity can also damage the trust that we carry in your company but that's not all in the context where this company performs services that are billed in India, it is normal that they are imposed in India. If you want to return your profits in India, you will have to declare it.