Advantages of Non-Resident Regime
Offshore zones include countries, certain areas of the city whose legislation allows foreign (non-resident) organizations to conduct operations with non-residents (foreign legal entities and individuals) using foreign currency. The government, which created an offshore zone does not interfere in the activities of the company or exercises a minimum of control.
However, registered offshore companies receive tax breaks, in some circumstances, the tax fees is completely abolished. Therefore, the main feature of the offshore zone is the presence of preferential taxation for non-residents having business outside the jurisdiction of the state. Along with the term "offshore area" can be found the analogues "offshore jurisdiction" and "offshore center". Colloquial variants became "tax shelter" or "tax heaven".
Company with registration in such zone that received tax breaks, called offshore. The literal translation of the term – "outside the banks". In essence, it means that the de jure firm is created under the laws of one country and the actual activity is conducted abroad, and serves as a basis for obtaining a number of benefits.
Offshore region appeared because of the desire of states to ensure the inflow of investments from outside and also to stimulate cooperation at the international level, using the minimum required economic intervention and state control.
The widespread use of this approach began in the 1960s when many former colonies gained independence. To attract capital, Island states introduced the practice of providing incentives (tax and other) companies which conduct activities outside the country.
The increase of offshore companies has also been associated with the spread of the monetary economy among the developed countries that caused the stricter requirements for banking organizations.
Such changes have led to an outflow of funds from the United States and other countries due to the opening of banks of transnational corporations on the territory of offshore zones, and later, with the help of creation of different companies (holding companies, routes, trade organizations, insurance firms, etc.).
Offering companies non-resident regime helps to raise funds in the form of fixed payments instead of variable taxes. In addition, the state does not need to worry about the possible consequences of the activities of the firms because it allowed only outside the country of registration.
Consider the income of some countries from offshore companies. D&A Consults, engaging business setup in Dubai, attract much money every year. In Panama, about $ 200 million is attracted every year. Deposits that different companies have opened in the Cayman Islands, are estimated at more than $ 150 million. Bahamas as profit from offshore organizations receive up to one-fifth of the gross national income.