How to choose the Right Offshore Service Providers

The universal providers

The universal providers sell offshore companies, too. The difference is that with the universal providers, like in a supermarket, the client is offered a wide variety of products and jurisdictions. Unlike the specialized providers, the head offices of "supermarkets" are often physically located in the big commercial centres of the world, like London, Singapore or New York. Consequently, these providers usually do not register the companies by themselves - they outsource the job to - of course - the same specialized Registered Agent described in the first chapter. Most of the big offshore service providers are essentially middlemen between the actual client and the local Registered Agent. The actual offshore company will be formed, maintained and administered mostly by the specialized local Agent. Some of the management functions may be carried out by the intermediary, who will of course also issue the (much bigger) invoices.

Speaking of the middlemen, there are some really large ones. Think of a 40-jurisdiction offshore supermarket with outlets and representation in all four corners of the world, full page adverts, shiny main street offices, glossy brochures, lots of staff, lots of fuss ... lots of overhead. You will be kindly asked to pay for it, obviously. But that's only part of the story. Big, multi-level systems tend to be bureaucratic, inflexible and slow. They don't do much by themselves, they outsource. You wait.

The arguably good aspect of the big superstores is just that - they will be able to sell you just about anything, with just about any bells and whistles. But don`t expect they will really help choosing the right jurisdiction and configuration for you. As in any shop, the right product for the seller is always the one with the biggest profit margin on top. The truth is, in this area, the best research is the one you have done yourself. In offshore incorporation services, big brand names do not necessarily guarantee the best value.

There is also the sensitive aspect of approaching an offshore company formation agent in your home country. There might be an offshore provider just around the corner in your own town. They are probably nice, competent, reasonable people. You may go to them, have a friendly chat about who you are and what your offshore arrangements might look like. And they might be coerced to report that conversation to your government.

Some of the large multinational offshore services firms do have their ground offices located in the actual offshore jurisdictions, licensed as Registered Agents. In this case, clients can be reasonably assured that there won`t be any problems with the speed of registration and the competence of the staff. The price might still be much to the upside of average. Some of the universal providers, especially the heavily internet-oriented ones, outsource all of their orders to local third-party Agents. In this case, there is no sense to buy from such intermediaries, as all the job will be done by the local Agent anyway.

If its a straightforward offshore incorporation you are after, then it`s only logical to talk directly to the people who will actually run to the Registrar and file the paperwork for your new IBC. Even more importantly, these people will also be the ones who will maintain the offshore company for you, hopefully for years thereafter, without the delays and costs associated with layers of middlemen.

That being said, there is actually one particular type of intermediary who may be worth going to. It`s Your legal advisor or Your accountant. Protected by client-attorney confidentiality privilege, a lawyer can also be Your "offshore service provider" - more often than not he will be better informed about the legal and fiscal circumstances of Your business and Your assets. When considering an offshore incorporation, it pays to take competent legal advice from a specialist, located in the country where You live or do business. Many legal advisors would in fact be able to outsource the required offshore services from a particular tax haven jurisdiction. However, certainly, an offshore company purchased this way may cost You dearly, on top of the legal fees.