“Registering and servicing firms is still four or five times less expensive in Cyprus than in any other jurisdiction with agreements on avoiding double taxation. That’s why Cyprus is still the leader for Russians to set up holdings.”

The Kommersant reports that the number of Russians who prefer to register their companies offshore continue to increase, with more than 2000 companies being registered in Cyprus on 2006. In addition. companies registered in UK, Luxemberg and Netherlands are reported to be increasing their activities in Russia.

According to experts, though the most visible reason for wanting to invest offshore is the avoidance of high domestic taxes, Russians prefer to incorporate offshore mainly because of their desire protect their ownership of their companies, build relations with their stockholders and balance the interests between company managers and employees.

Most importantly, more companies are now finding it more advantageous to be identified as coming from prestigious countries. This is evidenced by the increased interest in countries like Swtizerland, Austria and Denmark which has harsh tax laws compared Russia. A lot of companies believe that the high international status of those states more than compensates the high taxes being being levied upon them.

By definition, offshore banking refers to the act of availing the services of banking institutions outside one’s country of residence. This is usually done with the intention of protecting the anonymity, security and assets of a private person (or organization) and to avoid high taxes in the  individual’s country of residence.

After it started and became popular along the British Channel Islands, the practice of banking offshore spread to a number of states. At present, there are several countries that are popular as offshore banking destinations due to fewer restrictions that they have, compared to most states. At this point, the international offshore banking industry’s daily transactions has reached approximately $2 trillion.

What are the features of an offshore bank? Typically, one can obtain the full spectrum of services from most offshore banking centers. It includes regular savings and checking accounts (personal and corporate), Letters of credit and electronic wire transfer, debit/credit cards, loans and mortgages, and all other banking services that can ever be imagined. In some banks, anonymous accounts (have you watched the Da Vinci Code?) are even possible.

An offshore or non resident company is a firm registered or incorporated in a country where it does not substantially operate. Companies that register offshore normally prefer such a set up due to the different tax and regulatory policies being implemented by various governments. When people realize that it is more profitable to register in one country but operate in another, the process of incorporating offshore takes place.

This site aims to provide updated and relevant information regarding the exciting but not largely unknown world of offshore companies and offshore banking.