Principles of offshore business

Whether you want to use an offshore business for any purpose, the offshore business is governed by certain basic rules that arise both from the setting of local jurisdiction and are also influenced by the practice of Czech and foreign authorities.

The most common reasons for businesses and private individuals to use  offshore companies are:

• asset protection and anonymity of ownership
• using the benefits of a different legal environment
• perfect image and prestige of the international holding company

Prior to the establishment and use of offshiore company is useful to present the basic principles of offshore business.

Basic principles

1. The mere establishment of an offshore company is insufficient

Merely establishing an offshore company without a thorough business analysis, quality concept and setting optimal structure in practice can bring more inconvenience than a big benefit.

2. Tax optimization through offshore companies is not appropriate for EU residents and therefore we do not provide services related to tax optimization.

3. The selection of the offshore jurisdiction

Based on a complete analysis, we will recommend a specific country for each type of business, which will be most suitable for the establishment and operation of your company.

4. Personal relationships and trust

It is essential to establish a fully loyal relationship between you and your offshore service provider based on mutual trust and discretion. The names of owners of offshore companies are in some cases not displayed, and for practical reasons, should not even be seen at first sight. This means in practice that your offshore partner usually holds original company documentation within the management of the offshore company, which clearly proves, if necessary, who owns the offshore company. Only you decide to whom these documents and information will be made available.

5. Trust and nominee structures

As in the case of the names of the owners, it is inconvenient that the name of the director can be obtained from publicly available sources. In such situations, it is highly advisable that your offshore partner recommends and provides you a loyal executive or manager of the company.

This arrangement, when you are not acting alone, is called "trust" or "nominee". It's a situation where someone acts only in a way that you specify, and on the basis of mutual trust. However, if you ever suddenly need to quickly make any legal action on behalf of your offshore company, you have general power of attorney as part of documentation to perform all acts in both English and Czech language and with all the necessary certifications.

6. Documentation of the offshore business

Offshore business firms differ slightly in their documentation, depending on the state of origin, but basically you always receive the following documents:

• Confirmation of the state office on the existence of the company that certifies the legal existence, title, registration number and date of incorporation. Such certificate shall be issued by different authorities, but it is always necessary to have it official and any required verification. Such confirmation is then acceptable to the authorities in the Czech Republic.
• Charter (foundation, foundation): This document sets out the basic facts of the company: name, identification number, address, legal form, lines of activities and / or business and sometimes also the founder and first executive director or shareholder.
• Statutes: This document is a detailed description of the legal organization, processes, distribution and sale of shares.
• Power of Attorney: If due to circumstances you can not use nominee services it is always necessary to obtain a general power of attorney to you and any other person you designate.
• Documentation to the bank account: Offshore company can set up a CZK and foreign currency account and have the corporate credit card issued. The account can also be controlled by electronic banking. The big advantage of offshore companies is that they keep records only on transactions related to business on their home territory. Other payments, movements and financial transactions local authorities do not record.

7. Legal acts

Every offshore company must make each year a certain number of steps, negotiations and legal acts to function as intended. Mostly it means drafting and signing of contracts, forms, bills, invoices, statements, decisions of directors, powers of attorney, etc. Analysis of the necessary documents, their preparation and signing should be provided by your offshore partner.