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Intellectual property

Within the framework of the protection of property it is necessary to pay attention to the protection of intangible property - intellectual property.

Offshore companies may acquire copyright, know-how, patent rights, etc.

If a firm based in a country with the normal tax burden holds a patent, trademark or know-how and decides to profit from the rights to these intangible assets, such as through the sale of licenses, then the income from royalties is taxed in their country of residence.

For this reason, the intangible assets are often held through companies registered in appropriate countries.

Offshore companies can therefore take the above copyright licenses, know-how, patent rights and then resell them or rent them. Profit from the sale of any patent rights or royalties in third countries becomes then the income of such offshore company.

Income from leasing those rights is generally not taxed in the headquarters. 

A similar procedure can be applied, for example, in software, Internet domain names, and other forms of intangible assets.

The most commonly used tax havens for intellectual property

  • Cyprus
  • St. Vincent
  • Belize
  • Seychelles
  • The British Virgin Islands