Home Finance Investment Offshore companies in France
Last update on June 15, 2020

Consider the benefits of setting up an offshore company while living in France, by registering, establishing or incorporating your business ‘offshore’.

Offshore incorporation is a straightforward process in all of the popular offshore financial centres and tax havens, and can provide a wide range of benefits to the company and company principal(s). Offshore company registration is undertaken by individuals primarily for the following reasons:

  • Privacy
  • Asset protection
  • Reduced tax liability
  • Protection against lawsuits
  • Flexible business laws
  • Ease of operation
  • Confidentiality

Advantages of offshore companies

Overseas company formation can provide a wealth of benefits: offshore asset protection, confidentiality, enhanced privacy, tax savings or simply grow your business outside of the European Union.

Conducting business and undertaking banking transactions in the name of a legal entity, such as an offshore corporation, provide significant privacy and confidentiality benefits. Most offshore financial centres will not divulge the responsible individuals within the offshore corporations to a third party or foreign government. However, exceptions will be made in the event that an act of terrorism or a criminal atrocity has taken place and is being investigated.

Although France has a high corporate tax rate for trading income (34 percent), France’s prestigious status can be used without the high tax expense, by using a dormant company to purchase and hold brand names and act as a parent company of a foreign representative office.

Asset protection

The placing of assets into offshore corporations and overseas legal structures can provide a strong layer of protection from future liabilities. By having trusts, investments or bank accounts and other assets owned by your offshore corporation, it makes tracking them down via an asset search difficult. Offshore companies provide highly effective asset protection and effectively screen your finances from public view.

Legal protection through incorporating offshore

If a legal opponent is pursuing a legal action against you, it typically involves an asset search to make sure there will be money to pay out, in the event a judgment is awarded against you. Forming offshore companies and having assets held by the overseas company mean they are no longer associated with your name. Therefore your assets can be effectively shielded from legal opponents, judges and court rulings simply by incorporating offshore.

Benefits of offshore companies

An additional benefit is simplicity and ease of operation. Most overseas jurisdictions make it simple for anyone who is interested in offshore incorporation. The statutory obligations in the running of the offshore entity have also been simplified.

Disadvantages of offshore companies

One of the main drawbacks is in the area of remittance and distribution of the assets and income of the offshore company. Once monies are transferred to the resident country, they become subject to taxation, which can negate the benefits of the initial tax-free environment.

Due to the absence of detailed, publicly maintained registers, proving ownership of a company registered offshore can be difficult. While anonymity can be an advantage for overseas companies, when it becomes in the owner’s interests to declare themselves as the beneficial shareholder, this might be a difficult exercise.

Risks related to an offshore company

French local rates are generally more favourable than in many other countries, and there are lower levels of taxation on property rental profits, which is an important source of income for many international residents. Despite the existence of a tax on wealth, and the alarmist stories that appear from time to time in the international press about this subject, you need to be a millionaire in France to pay any wealth tax. However, the process of submitting your income tax return is a complicated one and if you under-declare your income the French tax authorities have a fearsome reputation for imposing severe penalties. This needs to be taken into account when creating an offshore corporation in France.

Some offshore jurisdictions are more stable than others, whether from a political or economic perspective. Physical distance, lack of knowledge of local customers, government and social attributes can increase the risks of financial loss occurring in some countries.

Renowned offshore locations

The following locations are well-known offshore locations:

  • Belize
  • The Caribbean
  • Nevis
  • Bahamas
  • British Virgin Islands