An offshore company is a convenient entity for conducting international business while preserving your confidentiality and minimizing your tax liabilities. However, the potential benefits of an offshore company largely depend on the jurisdiction in which it’s incorporated. Tax rates, secrecy levels and ease of operation, control or management vary from jurisdiction to jurisdiction.
Anguilla is one of the most attractive offshore locations to start a company. This British Overseas Territory not only has a low-tax environment for corporations and individuals, but is also home to a well-regulated financial services industry and the procedure for setting up an offshore company is pretty straightforward. The following is an in-depth analysis of the primary reasons why Anguilla should be at the heart of your offshoring strategy.
1. Political and Economic Stability
Businesses thrive best in environments that aren’t marked by social unrests, regular labor strikes and other kinds of chaos. This is exactly what you get in Anguilla: a politically-stable environment that enables domestic and foreign establishments to succeed. Even though the territory is led by a British-appointed governor, it’s essentially a self-governing jurisdiction with a democratically-elected legislature (House Assembly) and a common law legal system based on English law.
Although Anguilla’s economy suffered a major setback after the financial crisis of 2008, the government has managed to stabilize and strengthen it. In 2014, for example, the economy, fueled by robust tourism, offshore banking, fishing and real estate industries, expanded at an impressive 6.8 percent. Transportation and communication structures and facilities are continually being enhanced to support the growing number of businesses.
2. Easy Company Formation and Administration
Jurisdictions that have quick turnaround times for company formation are usually more attractive to foreign investors. In Anguilla, your offshore company can be incorporated within minutes, particularly if the process is done online with the help of an approved sub-agent. Offline applications take a maximum of 24 hours to be processed. In addition, there is no minimum capital requirement for new companies. All that is required is the name and address of at least one shareholder and director (can be the same person), and registration fees. Since you can use the services of a registered agent like Starting Business to open the company, your physical presence in Anguilla is not a requirement for incorporation.
Depending on your personal and business needs, you can open an Anguilla Business Company (ABC), International Business Company (IBC) or Limited Liability Company (LLC). Anguillan IBCs – which are the most preferred entities by foreign investors – are prohibited from engaging in commercial activities with the residents of Anguilla, and cannot provide banking, insurance and company management services without securing the relevant licenses from competent authorities. They are, however, allowed to rent or lease office space, open and maintain bank accounts, own and operate boats and other sea vessels, and hire professional personnel from the local labor market.
The shareholders and directors of Anguilla IBCs are not required to hold annual general meetings, but in cases where a meeting is necessary, it can be held in any part of the world. Shareholders can meet in person or by electronic means. It is also not mandatory to file financial statements or hire a company secretary.
3. Migration of Corporate Domicile Allowed
In the world of international business, a corporate domicile is the jurisdiction in which the principal affairs of the company are conducted. As an owner of an IBC, you may need to move its domicile from one offshore jurisdiction to another, perhaps to avoid tightening tax regulations in the current jurisdiction or take advantage of tighter financial secrecy laws in the other territory. To do this, you would normally need to dissolve your existing IBC and begin afresh the process of registering another company in the new jurisdiction. With an Anguilla IBC, you don’t have to go through the trouble of closing it down. The territory permits investors to transfer it to another jurisdiction that permits re-domiciliation.
4. Zero-Tax Environment
Tax minimization is one of the top reasons why investors register holding companies in offshore financial centers. Anguillan companies are not subject to taxation on profits, share transfers, estate/inheritance or capital gains. This means that you can move your existing company to Anguilla and continue with your international businesses without worrying about getting taxed, unless your home country taxes residents on their worldwide income.
5. Stable Financial Services Industry
The ability of an offshore jurisdiction to attract foreign investment doesn’t only lie in keeping taxes as low as possible. A well-regulated financial services industry to handle the incoming investments is just as crucial. The Anguilla Financial Services Commission is the government agency responsible for promoting the territory as a premier offshore financial center, as well as ensuring a safe and stable financial system.
The agency encourages all licensed financial services providers to conduct thorough background checks on their customers to verify the legitimacy of their wealth sources. Some of the commercial banks that operate in Anguilla include First Caribbean International Bank, National Bank of Anguilla, Caribbean Commercial Bank and Scotiabank.
6. Booming Professional Services Industry
A thriving professional services industry is central to the success of an offshore financial center. Foreign investors rely on professionals like accountants, lawyers, auditors and company to set up and manage their offshore entities. In Anguilla, there is solid network of companies that provide professional services, meaning prospective investors have access to a large pool of company registration and management experts.
7. Investor Privacy
Offshore jurisdictions are typically known to protect the privacy of international investors and Anguilla is no exception. Although articles of incorporation, certificate of incorporation and register of shareholders and directors are kept at the Commercial Registry, these records are not available to the public. Furthermore, the International Business Company Act forbids company custodians, auditors or any other person from revealing any kind of information regarding an Anguilla corporation, unless under the directions of a court of law. If this isn’t enough to assure you of top-level secrecy, then you can appoint a nominee shareholder or director to your company during its formation.
But this doesn’t mean you can stash ill-gotten wealth in the island and get away with it. Anguilla prides itself as a reputable offshore center that adheres to international standards on financial regulations and fully cooperates with overseas governments to solve criminal matters. The island has a tax information exchange agreement with the UK and a few other countries.
8. Trademark Protection
Anguilla has enacted robust domestic laws and policies that provide for protection of trademarks, trade secrets, copyrights, industrial designs and patents among other pieces of intellectual property. Being a British territory, holders of trademarks registered in the UK can extend their rights to Anguilla, but the island will only act on infringement claims if the trademark in question was re-registered through the registrar of companies. With such strict business protection laws, you can expand your current brand to the island without the fear of trademark theft or infringement.
9. No Foreign Exchange Controls
Foreign exchange controls restrict the amount of foreign or local currency that can be traded within a specific period. Such controls discourage foreign direct investments, because foreign investors may be unable to convert their money into the local currency. Anguilla does not enforce any currency controls, so investors can move as much money as they wish in and out of the territory, as well as hold money in any currency of their choice
Even though the East Caribbean Dollar (XCD) is the territory’s official currency, the United States Dollar (USD) is also widely used. To ensure a balanced circulation of the two currencies, the exchange rate is fixed, with the XCD pegged to the USD at 1 USD = 2.7 XCD. A fixed exchange rate eliminates the uncertainty that comes with currency fluctuation, giving investors a greater incentive to invest in the country.
10. Strategic Location for International Business
Anguilla is perfect for investors who want to access trade markets in North America, North Africa and Latina America. The island is located in close proximity to countries such as Cuba, Dominica Republic, United States, Venezuela, Brazil, Columbia, Senegal, Mauritania, Gambia and Liberia. These markets can easily be accessed by air.
11. Path to Permanent Resident Status
If you aspire to be a permanent resident of Anguilla and enjoy the tropical climate and clean beaches without worrying about an expiring visa or work permit, one of your options is to start a company and invest in the territory. According to Anguilla’s ministry of home affairs, visitors who own businesses worth at least US$ 2.5 million stand a higher chance of being considered for grants of permits of permanent residence.
Evidently, there is much more to Anguilla than the attractions that make it a top tourist destination. It is also a reputable offshore financial center that provides an enabling environment for foreign investors to start companies, create and protect wealth, and lower their tax expenses. If you were undecided on whether to start an IBC in Anguilla, there is no doubt; you now have 11 solid reasons to choose the territory as your ideal offshore location.