Cost-Benefit Analysis

[gwenpinay]

Many people assume, that because its offshore, it's a good idea. That's not always the case.


Offshore company formation and location has associated costs alongside its tax and other benefits. As in any other economic decision, the option becomes a good one if its benefits exceed costs. Yes, you have to make estimates and reduce both costs and benefits into dollar values to have a clear measure.

 

[clemens]

Yes thats true, if you conduct regular business in your local town or even in online but don't do that good business that it can make up the additional costs connected to an offshore corporation then it isn't good for everyone to do so.

 

[pluma]

True, but many of the ppl which want to go offshore with their business have a reason for this and that’s to avoid TAX, the small one man websites don't need it and it might be to expansive for them.


I have found many posts on other forums too where people seeking to go offshore some of them have another reason than TAX; they are doing business in a gray zone.

 

[gwenpinay]

Avoiding tax is a good reason to go offshore but it isn't always beneficial. Sometimes, what you save in taxes isn't even enough to covert other costs of doing business offshore. In that case, why would you? Wouldn't make sense to spend more than what you are able to save.

 

[Spinat]

True, only if you are doing some real big business or you'r running a huge online pharmacy or similar gray zone business it would be of benefit for you.

 

[gwenpinay]

I'm sorry but what exactly do you guys mean by "gray zone?" I wasn't insinuating illegal or any shady businesses selling pipe dreams or snake oils (which are aplenty online). I was talking about legitimate brick-and-mortar businesses, which may or may not have a business website, who might be spending more offshore than they are saving in taxes.