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LINKS IN THIS SECTION

- Offshore Company Formation
- Financial Services
- Legal Services

RELATED SECTIONS

- Taxation of Offshore E-commerce
- Regulation of Offshore E-commerce
- Offshore E-commerce Facilities
- Offshore E-commerce Applications

There is a basic level at which any offshore person or company has to fulfil the statutory requirements of an offshore jurisdiction, but beyond that there is the need for corporations to integrate their offshore operations (and their accounting) into overall corporate systems, and finally there are the innovative and beneficial possibilities that arise once e-commerce and e-business begin to be the source of a significant proportion of a company's transactions.

The basic statutory accounting

'Statutory' means not just the rules of the offshore jurisdiction, but also means whatever may be the rules of any other jurisdictions that are involved. Thus, a person domiciled (which means, roughly, based long-term regardless of short-term absences) in a high-tax country with trusts in an offshore jurisdiction will probably have to submit annual accounts to his home tax authorities, even if not (usually not) to the authorities of the offshore jurisdiction. An offshore company may be more independent than that, but if it is controlled (complicated word!) by another company in a high-tax jurisdiction then it probably has to report to its owner for statutory reasons even if not for managerial ones.

Statutory reporting on this level can probably be carried out in most cases by perfectly competent local agencies, whether these are the local branches of international accounting consultancies, or well-established local firms. Most jurisdictions have specialised trust-administration companies, which are often linked to legal or accounting practices in high-tax countries, and these are usually able to provide accounting services in addition to their legal role. If the overall tax picture is more complex, it would probably be wise to involve the 'head' tax adviser in the choice of local accounting agency.

Corporate Accounting

By this is meant accounting in corporations with fairly complex structures, and especially those with many cross-border links. In these cases the treatment of local transactions and balances may have far-reaching consequences for the group as a whole, and it is important that detailed supervision is exercised by, so to speak, the controlling tax intelligence of the group, which will normally be the group's tax manager, if it is not the tax planning department of the chief auditing practice. Conflicts arise all too frequently when a local firm is allowed too much freedom; the ideal situation will always be that the group's main auditing practice carries out local accounting through its own local associate.

Internet-driven Accounting

Traditionally, offshore companies were in the last analysis tax-efficient post-boxes. As the infrastructure of offshore jurisdictions began to improve, and specifically telecommunications, companies began to locate more significant parts of their business operations in the countries comprising offshore. The Internet has allowed a quantum leap forward: it is now often possible to locate major parts of corporate headquarters operations in offshore jurisdictions, including financial management, marketing, advertising and sales, even personnel, research and IT functions. Evidently this has very substantial accounting consequences, apparently demanding a far greater accounting presence in the offshore jurisdiction concerned.

Not so. An Internet transaction (more generally, an IT transaction that can be linked to the Internet) is immediately available to an accounting or analysis department anywhere in the world. Moreover, the accounting department that deals with the corporation's Internet transactions does not have to be inside the corporation.

OFFSHORE PROFESSIONAL AND FINANCIAL SERVICES

- Offshore Company Formation - Forming an offshore company for E-commerce purposes.
- Financial Services - Banking and financial support for offshore E-commerce.
- Legal Services - Specialist legal services for offshore E-commerce.


 

STRATEGIC PARTNERS
  Lowtax.net
  Tax-News.com
  Expat Briefing
  LawAndTax-News.com
  OffshoreTrustsGuide.com
  TreatyPro.com
  Global Incorpoation Guide [GIG]

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