Do you want your business to be successful? Of course, you do. This depends on the strategy you select, and one of them is taking your business offshore. This means incorporating and running your enterprise or a branch of it abroad. In this post, we will compare the advantages and disadvantages of taking your firm offshore.
The Pros of Taking Your Business Offshore
The primary benefit of going offshore is access to a larger market. With a branch of your company in an offshore jurisdiction, such as China, Hong Kong, UAE, or the UK, it is possible to sell your products to a larger audience. Why limit your operations to the local market when there is so much more in the international market. Here are other benefits to anticipate for taking your company offshore:
- It is a Great Way to Enjoy Low Taxes
Most offshore jurisdictions have low-taxes, which their administrations use to make them more attractive to investors. For example, Hong Kong uses a double-tier profit tax system which helps to ensure companies get to keep the bulk of their profits. Under the double-tier profit tax system, businesses are charged 7.5% for the first HK$2 million profits while anything beyond HK$ 2 million attracts 15%. This is way lower than what most countries charge.
If most of the transactions for your enterprise are done offshore, it might be possible to operate tax-free in some jurisdictions. In other foreign countries, such as China, you also enjoy very low tax rates by opening your enterprise away from the coastal cities and focusing on the encouraged areas.
- Taking Advantage of Government Support Programs
To help businesses grow faster, top jurisdictions have installed programs to make registration easy and growing fast. For example, China has free trade zones where businesses, especially those in the encouraged areas, get a lot of support. In Hong Kong, the Cyberport Incubation Programme (CIP) comes in handy in supporting enterprises the technology-related areas.
- Taking Advantage of the Highly Developed Infrastructure
The most revered offshore investment jurisdictions have well-developed infrastructural systems. Take the example of a jurisdiction with a good Inland Container Depot (ICD) facility. This means that your raw materials, finished products, and other logistics will be pretty easy to handle and move. Other outstanding infrastructural developments in top offshore jurisdictions include:
- High internet penetration.
- Good road and air networks.
- Affordable power connection.
Cons of Taking Your Business Offshore
While the above benefits are awesome, there is one disadvantage that you need to know – the process can take time. However, you can overcome this challenge by working with an agency of experts. Indeed, a good agency will not just come in to assist with company registration offshore but can also help to make entry into the new market easy.
As you can see, there are so many advantages of taking your business offshore. Well, the process will be even simpler by working with experts. Since they have helped other companies expanding offshore, they can easily tell you what works and what does not.