Financial planning for expat companies
Many multinational businesses make use of offshore companies as part of their operational and corporate financial planning. Regardless of size, expat businesses which sell in a different country to where they produce can often benefit from offshore corporate financial planning.
A world of opportunity
If you are an expat business owner, expat company shareholder or expat senior executive here in Thailand, with customers who are located outside Thailand, you may be able to add considerable value to your organization by reviewing your corporate structures and making use of professional corporate financial planning tools.
Whether your expat business operates through a single local Thai company or a combination of a local and overseas company, there are legitimate offshore corporate financial planning steps that can be taken to mitigate your overall tax bill. Central to such a strategy of corporate financial planning for an expat business is an ‘offshore company’, now more commonly known as an International Business Corporation or IBC.
Corporate offshore financial planning opportunities
Using an offshore company in your expat business structure provides benefits far beyond reducing your annual tax bill. Having your expat company money and funds located offshore, in a Tier 1 International Financial Centre puts you more in control and makes it easier to move company capital within your expat company, perhaps around the world.
If you need to move the operational and or production centre of your expat company to another country, offshore funds are more readily accessible to help set up your new base. Free from exchange controls and other restrictions, your money can be used however you wish and when you choose. Even if your money just sits in a bank account, an offshore expat company will at least avoid tax on the interest.
One of the traditional benefits of operating through a company is the financial protection afforded to the company owners, the shareholders. Shareholders, including expats, cannot usually be held liable for the debts of their company and so their personal assets are protected from company creditors, whether arising through normal business or even litigation. It should also be remembered that in many of the more desirable expat locations, it is often a lot easier to transfer money into the country than out of it.
Employee retention strategies for expat companies
With few if any restrictions, offshore corporate financial planning can provide expat companies with powerful employee retention packages. This can help you in attracting and retaining quality professional expats.
An expat offshore company provides the perfect structure for providing executive retirement planning benefits to your professional expat employees. Free from the retirement savings restrictions that exist onshore, your expat offshore company is free to invest as much as you choose for your senior expat executives and other working expats as part of your corporate financial planning strategy. Your professional working expat employees are also free to invest as much as they choose and can ‘retire’ and/or access their expat retirement fund when THEY choose, rather than when their home country says they can. All of the funds can be taken tax free and in full if so desired.
These expat savings plans also ensure that in the event of the untimely death of expat employees, their loved ones receive the full value of the savings plan, without penalty. This is in stark contrast to the home countries of many expats, where a surviving spouse or civil partner can usually look forward to no more than two thirds of what the retirement income would have been and often much less.
Corporate financial security planning
There are first class health insurance schemes which provide both individual and corporate cover for professional working expats, with big discounts for expat corporate schemes. Life insurance and other income protection cover for professional working expats is available in a wide range of currencies, the proceeds of which are free of tax and easy to claim.
Frequently asked questions about offshore companies
How long does it take to set up an expat offshore company and expat company bank account?
Offshore expat companies can be set up in just a few weeks. Once set up, your offshore corporate bank account can be in place within two or three weeks.
Where should I locate my offshore expat company?
There are many jurisdictions offering the facility of tax-free International Business Corporations, or IBC’s which are suitable for expats. Your financial adviser can help you in selecting the right jurisdiction for you as part of your corporate financial planning.
Will my money be safe in these countries?
Your offshore money should be located with a bank located in a Group 1 OECD country. An expat company can open a bank account anywhere in the world and often in a jurisdiction other than the country of incorporation of the offshore company.
Will this create more paperwork?
Professionally designed corporate financial planning often results in only a negligible amount of additional administration, often no more than paying the annual regulatory costs of your expat offshore company to the jurisdiction where it is established.
Professionally qualified financial advisers can recommend the best overall structure for your corporate financial planning needs, which may include the use of offshore companies as well as other corporate financial planning tools and structures.
It is your right for your expat company to pay no more tax than legally necessary.
Professionally exam qualified financial advisers can help you to avoid unnecessary tax and restrictions.
It’s your money and your peace of mind.
Richard Colburn is a UK qualified financial adviser.
Questions to the author can be directed to 053 839 463 or email us