Offshore companies have many valid uses and these uses may well be combined in practice. Typical scenarios include:

1. Tax optimization and planning

• offshore company is a lawfully and legally incorporated business entity, it is duly registered and active, has its registered company number, registered address, director(s) and declared scope of business activities; it can absolutely legally provide services to Czech companies, conclude contracts with them and consequently bill them, both in CZK and other currencies; it can bill in prices that are either market-based or purely contract-based, depending on the conception chosen for your strategy
• double-taxation protection: a typical feature of offshore destinations is no dividend tax; whereas a Czech natural person being a sharehholder of a Czech limited or public company pays 15% tax on dividend paid from an already taxed net profit of that company, hence being taxed TWICE upon one underlying profit-bearing activity of his/her company, offshore jurisdictions apply no such tax and usually have a no double-taxation treaty with the Czech Republic, so the Czech Republic cannot tax payment of such a dividend by the current 15% rate.

2. International trade

• International trade in all kind of goods is an increasingly popular purpose for an offshore company formation and related structures. Logistics and management go quite well along with tax optimization while using advantages of duty free zones
• Typical use includes placing an offshore company between suppliers and customers and so removing part of taxation onto this offshore company

3. Holdings

• One of key features in creating a holding structure surely is lowering taxation and centralizing profit in the parent company, one that has its registered address in an offshore destination – the most common jurisdictions are Holland (no dividend and capital gain tax) or USA and Seychelles (complex advantages of offshore tax optimization)

4. Intellectual property

• use, holding and selling intellectual property licences, know-how, patents, trade marks and other immaterial assets

5. Anonymous ownership

• An offshore company is an ideal solution to make the owner of a business or real estate invisible, especially if combined with nominee Directors – you are guaranteed absolute asset protection and yet hold full control of your assets – these solutions are often implemented in the western world, for example 70% of all London real estates are held by offshore companies – this kind of real estate administration is called TRUST

6. Providing services

• The most common service of an offshore company is analysis and consulting in economic matters and busiiness solutions, general agency and intermediation, negotiations with business partners, lecturing and providing tarining courses, working out Internet presentations, database administration and data storage for servers, legal services etc.

7. Securities investment

• offshore jurisdiction may easily be used to diminish tax impact on profits gained through trading securities – often used even by minor traders

8. International financing

• Providing credits and loans through some offshore companies and jurisdictions prevents taxation of interest from these credits and loans and thus a higher profit of the lender

9. Trade in receivables

• This specific business is the very definition of perfect use of offshore structures; trader in receivables buying from banks (unpaid credits and mortgages) further sells or enforces payments; selling or enforcing receivables through an offshore company brings lower withholding tax and may significantly decrease taxation

10. Doing business without need of paid up share capital

• Our laws allow foreign companies to do business in the same scope as Czech companies
• Offshore companies, unlike Czech or Slovak companies, allow very low paid-up capital. Typically this is 100 USD divided into 100 shares with par value of 1 USD; szch share configuration enables easy splitting and taking in additional business partners
• offshore companies have no problems establishing a branch office in the Czech Republic, such a branch is assigned a Czech identification number, we can provide a registered address; this branch acts and does business through its Director, and we can provide that too; such a branch has all the rights and possibilities any Czech company does, may register for VAT, may employ staff, but most tax advantages of the home destination remain

11. Proving source of finance

• offshore companies may order and pay services provided by Czech companies and individuals; hence the Czech company gains money from its customer for provided services, based on a spot-on contract, written order and a tax bill

12. Change of citizenship and residence

• Based on establishment of business abroad applying for residence permit or citizenship is possible