An offshore corporation, or offshore company, is a company that is chartered under the laws of a country other than the U.S. These offshore jurisdictions, like the British Virgin Islands or the Cayman Islands, have special offshore company laws to encourage capital investment. The offshore company does not and should not conduct substantial business in the place where it incorporates, according to the Cayman Islands Companies Act, Chapter VII, Section 174. Commonly, the offshore company is called "business company", under the BVI Business Companies Act, and it is named as "exempted company" under the Cayman Islands Companies Act. These companies are set offshore to avoid foreign currency control, to have a better condition for conducting cross-border mergers and acquisitions, lower management fees and regulations, and to gain more tax breaks, etc. The “company” refers to any LLCs, LLPs as well.
See also: foreign corporation
[Last updated in March of 2022 by the Wex Definitions Team]
- Keywords