If you are an investor and planning to use an offshore company to secure your assets in a stable jurisdiction this question might arise more sooner than latter: Can I buy assets with my offshore company?
If you ask that question, this blog post is specifically written for you. Read on to find out the answer.
You are allowed to acquire assets – with some limitations
Generally speaking, setting up an offshore company means you are allowed to do business worldwide – and get all the benefits offered by the jurisdiction of your choice.
The typical arrangement would be like this: You enjoy little or no tax benefits for business activities you do outside your jurisdiction. If you are planning to acquire assets, the similar arrangement also applies to you, but in a stricter way.
Typically, you are welcomed to do investing in any forms, including buying property, business vehicles, and stocks – with some limitations that we will cover below:
1. Buying real estate
In general, your offshore company can acquire real estate, but the laws of your jurisdiction may limit your activity to buying properties outside your incorporation jurisdiction.
There are some exceptions, though – one of them is the offshore jurisdiction of Ras Al Kahimah (RAK). Setting up an offshore company in RAK, one of the emirates in the United Arab Emirates (UAE,) can enables you to own real estate property in UAE.
Please note that you need to check with the local laws and regulations in the country you are buying your real estate in. There may be restrictions or special conditions to meet before a foreigner can buy a local property.
2. Buying business vehicles
Yes, you can buy cars with your offshore company – with some limitations. The same, general rule applies: You may buy a car, as long as you don't use it in your offshore company's home country.
You need to, however, consult with your lawyer whether you are allowed to buy a car in a country of your choice, and if so, what kind of tax, customs and other financial responsibilities you are obliged to assume.
3. Buying securities
Your offshore company may buy and sell securities. In fact, the majority of the big players in the capital markets are offshore companies.
Indeed, you can participate in major stock exchanges, as well as commodity markets – with no limitations.
4. Patent and licenses
As an offshore company, you can be a patent and licenses holder – just like the typical onshore companies. Your intellectual property is fully yours, and there are no limitations in capitalizing on your patent and copyright – as long as you keep in mind the restrictions and limitations in global tax regulations.
5. Buying other businesses
Just like patent and licenses, you may also freely invest in other businesses, as long as you comply with the local regulations governing the taxation policies and rules/requirements for acquiring a business in a particular country.
To conclude, you may acquire assets with your offshore company, as long as you are playing by the rule. With that said, you need to consult with your lawyers and local authorities about your intent in asset acquisition.
Understanding the local rules and regulations is a major part of your asset acquisition process, so be sure you consult with your local experts and lawyers of the country in which the asset resides.
We can help you answering all of your burning questions, you can contact us here. If you have more questions on issues that are not covered in the FAQ, just ask away!