What Documents Do You Need to Start an Offshore Company?

In the context of international business, offshore company formation involves incorporating a legal entity in a jurisdiction outside that of the owner’s official country of residence. There are various reasons people choose this route. These include the ability to streamline international trade, protect assets, and optimize operational structures.

It is vital to pursue offshore company formation in a legal and effective way, which involves undertaking the correct registration processes in the chosen offshore jurisdiction. While the details can vary from country to country, there is usually a consistent core set of paperwork to collate.

We’ve put together this guide to walk those considering this method through all the essential documents for offshore company registration. Importantly, as Ascot provides global support, the article takes an international perspective, rather than being limited to a single region.

Understanding Offshore Company Formation

By definition, an offshore company is a legal entity that is incorporated in a jurisdiction other than that in which its owners or primary stakeholders officially reside. It has a distinct corporate identity, which enables it to own assets, enter into contracts, and pursue transactions in its brand name. It’s also important to note that while the term “offshore” refers to a jurisdiction outside of the individual’s country of residence, this is referring purely to the geographical location of incorporation, it is not a location restriction on the activities of the company. Forming and operating companies in this way is a global opportunity that isn’t limited to a single local offering.

So, why do entrepreneurs and investors take this approach? Some common uses of offshore companies include:  

• Asset protection – To safeguard the personal or corporate assets of owners against threats. These may include political instability or litigation.
• Privacy – To keep certain ownership or business details confidential. This must be in alignment with any relevant local laws. This can be particularly relevant for owners looking into what is a bearer share company.
• International expansion – To enable companies to function across multiple jurisdictions, without being locked into the legal framework of a single country.
• Tax structuring – To lawfully manage exposure to tax obligations. Again, this must be in compliance with the laws and regulations of both the offshore jurisdiction and the owner’s country of residence.

Why Documentation Matters in Offshore Incorporation

Gathering documentation for offshore incorporation isn’t just a matter of being able to tick all the right administrative boxes that are needed to qualify for registration. Rather, this paperwork plays an important strategic role in ensuring the company sets off on solid organizational and regulatory-compliant footing. Indeed, the authorities tend to use the submitted documents to verify the identities of those involved with the business and confirm that the activities the company is pursuing are legitimate.

One of the main reasons this documentation is important is that it supports the due diligence scrutiny that is increasingly applied to offshore applications. Know Your Customer (KYC) procedures are common. This isn’t just related to incorporation but also in opening business accounts. Authorities recognize that stringent checks protect the jurisdiction and individuals from risks of fraudulent or illegal activity. As a result, without properly prepared documents and a registered agent in place to handle legal correspondence, an application to open an offshore business cannot proceed.

Core Documents Required to Register an Offshore Company

The fundamental documents for formation typically include:

• Proof of identity – This is required for each director, shareholder, and ultimate beneficial owner (UBO). In most cases, it takes the form of internationally recognized, government-issued identification.
  
• Proof of residential address – In many cases, a recent utility bill or bank statement will be sufficient. This should have been issued within the last three months.
  
• Notarised passport copies – This can either be the main form of ID or support other provided proofs of identity for all key owners and shareholders. It’s important to check whether translation of the notarized document into the official language of the offshore country is also required.
  
• Completed application forms – These forms will be specific to the chosen jurisdiction’s business registry and must be completed in full.
  
• Bank reference letter – This should demonstrate good standing and credibility of the applicant. A professional reference is sometimes acceptable as an alternative.
  
• Detailed business plan – A copy of the official business plan, or at least a clear description of the company’s intended business activities, is essential. This is particularly relevant for jurisdictions that require an economic substance assessment.
  

Although these are common requirements, it’s important to verify requirements with the registered agent for any specific jurisdictional differences. 

Additional Documents Depending on Jurisdiction

Popular offshore jurisdictions often have their own document requirements for an offshore company. Some of the supplementary items in certain jurisdictions can include:

• British Virgin Islands (BVI) – Tends to require source of fund confirmation documents before the initiation of activities.
  
• Seychelles – Most of the required documentation is relatively standard. That said, companies may be required to have copies of identification documents apostilled under the terms of the Hague Convention.
  
• Belize – Detailed KYC questionnaires are often required in addition to the standard identification documents.
  
• United Arab Emirates (Ras Al Khaimah, DMCC) – Economic substance declarations and proof of a physical office is often required. Although, this can depend on types of business activities performed.
  
• Cayman Islands – Enhanced due diligence is often required. Sometimes this includes verifying a company’s legal entity identifier (LEI) used for validating international transactions.

How to Prepare and Authenticate the Required Documents

Submitted documents must conform to the specific jurisdictional standards. For instance, if the documents aren’t in English or the official language of the target jurisdiction, they must be translated and certified accordingly. Additionally, a public notary must certify that all copies of key documents match the originals. In some instances, an apostille stamp is required to verify the authenticity of government-issued paperwork.

It’s also important to avoid common errors. For instance,  expired documents and mismatched signatures. It can help to perform a careful review of all documents, assisted by an external consultant. When asking “How much does it cost to open an offshore company?”, delays and resubmissions will often push up the costs involved.

Working With a Professional Offshore Company Formation Consultant

An experienced offshore company formation consultant is an invaluable collaborator. They can help companies effectively navigate complex documentation and compliance requirements related to different jurisdictions. They may assist with auditing potential jurisdictions to determine which is most suitable for the intended business activities. In many instances, they’ll liaise directly with registered agents and government authorities to avoid unnecessary delays. Importantly, these services are global in nature, rather than being bound to a limited location.

Storing and Updating Offshore Company Documents

Even after the company is formed, paying careful attention to correct documentation doesn’t end. Securely storing both the original and digital copies of key paperwork for easy future access is essential, particularly should audits or reviews arise. Some of the vital documents to store include corporate registry filings, annual reports, minutes of director and shareholder meetings, and any director or shareholder resolutions that affect operations.

Furthermore, it is vital to update official records promptly should changes occur. For example, if the company changes address or ownership is altered.

FAQs

What is the most important document for starting an offshore company?

The passport or government-issued identification of the ultimate beneficial owner is often considered the primary document.

Do I need to be physically present to submit the documents?

In most cases, offshore company formation can be managed remotely, when accompanied by certified and apostilled documents.

How long are my documents valid?

Documents should usually be issued within the last 3 months to comply with KYC requirements.

Can I use a virtual address as my proof of residence?

Not usually. Offshore jurisdictions tend to require a valid residential utility bill or bank statement.

Is it safe to send my personal documents to an agent?

Yes, on the condition that the consultant or agent is reputable and uses encrypted document transfer and storage methods.

References

Chen, J. (2024, August 6). Know Your Client (KYC): What It Means and Compliance Requirements. Investopedia. https://www.investopedia.com/terms/k/knowyourclient.asp 

European Commission. (2024). Anti-money laundering and countering the financing of terrorism at international level. European Commission. https://finance.ec.europa.eu/financial-crime/anti-money-laundering-and-countering-financing-terrorism-international-level_en