Most offshore jurisdictions have provisions that deny tax benefits to an International Business Company (IBC) or its equivalents, trading in the country of incorporation. This allows the IBC without activities in the country of incorporation to utilize the efficient, flexible, and affordable infrastructure of the jurisdiction. Yet, managing an offshore company in the current fast changing and turbulent economy is not always easy. Governments and their tax departments, as well as regulatory agencies want more control in what they claim to be an effort to combat fraud, corruption, tax evasion, money laundering and terrorism financing.
As a non-resident, ownership of an offshore company has several benefits. When used appropriately, the administrative and tax burden is minimized whilst following the rules in home and host states. Added value is found in the relative privacy of the ultimate beneficial owner of the company. Contrary to onshore company formation where the incorporation often triggers a range of external responsibilities, an offshore company requires payment of yearly renewal fees to keep the company in good standing. A company that is not in good standing is not allowed to trade and personal liability can be imposed on the beneficial owner or directors of the company.
Although the court can normally and only in exceptional circumstances pierce the corporate veil for active companies, things are different when a company has lapsed, was struck off from the corporate registry, was liquidated or involved in any other type of corporate winding up. The legal standing of a company that does not exist is limited and its ultimate beneficial owner can be imposed with personal liability. Unless a court decides so, the ultimate beneficial owner of a closed offshore company has no rights to access the corporate assets. This position often emphasizes the need to reactivate the offshore company.
Reactivation of an offshore company may become required in case of inheritance of an offshore company, the failure of a bank still holding funds in the name of the lapsed or closed company, or, to exclude liability in cases of contract law and tort.
During the last decade, most of our clients in need to reactivate their offshore company, were required to do so to regain access to the company bank account, receive payments of inheritance where the beneficial owner of the company passed away, or had to participate in bank liquidation procedures where it is required to submit a proof of debt and consequently a proof of claim showing the legitimacy of the request for reimbursement. In every reactivation procedure, time limits were to be protected since late filing results in a difficult asset and fund recovery procedure, often leaving creditors with empty hands. Hence the reason to follow the rules and hire expert advice to reactivate the offshore company.
This specialized and tailor-made initiative to reactivate offshore companies is established by Legal Floris LLC and Equation Corporate Services Ltd. Both firms have extensive experience in tax advice, (offshore) company formation and ultimately asset and fund recovery for different creditors having a wide range of challenges to recover assets and money that seems rightfully theirs. Often, where swift action is taken, priority positions are ensured for our clients resulting in a maximum recovery.