Offshore Company (IBC) Terms Clarified

Here are some helpful definitions of terms and phrases commonly used in offshore corporations and related legal terms to help you understand what they actually mean.  This should help one interested in dealing with offshore transactions come up with a good decision before diving into one.

Offshore is a word commonly attached to another word or phrase.  It simply means anything outside of a country’s jurisdiction.  So if I’m in the US which is considered onshore, any other country outside of our jurisdiction is referred to as offshore.  Following this definition, you could easily understand some words like offshore bank, offshore banking, offshore ATM card, offshore bank account, offshore banking account, offshore company, offshore company incorporation, offshore company formation and registration, offshore formation and more.  Let’s go over each one by one.

Offshore bank is any bank located in a different jurisdiction from one’s own country.

Offshore banking is any bank located in a separate jurisdiction other than the one you’re in.

Offshore ATM cards require funding before it can be used at any terminal as opposed to offshore credit cards which can be used for online transactions without any pre-funding necessary.

Offshore debit cards are almost the same as offshore ATM cards where pre-funding is required, but the card is issued by an offshore bank.  Some types are the Visa or MasterCard.

Offshore bank and banking account are similar in the sense that these are bank accounts opened at a country other than your own.  The difference is that the former refers to the act of opening the account while the latter refers to the act of maintaining the said account.

Offshore company is any company formed outside of your country’s jurisdiction.

Offshore company incorporation is the act of putting up a corporation bearer share offshore.  A lawyer and non-lawyer can do this depending on the country’s laws and regulations.

If offshore company formation points to the formation of an offshore company, offshore company registration indicates registration of the corporation according to government rules where its portfolio must be recorded.

Offshore haven is so called because this jurisdiction does not tax income derived offshore such as in Panama.

Offshore incorporation pertains to the creation of a corporation offshore which can be done through offshore incorporation services which is usually offered by firms or any such entities.

Offshore stock broker and lawyers are termed thus because they are just the same stock brokers or lawyers, only located outside one’s country.

Panamanian Visas

Panama has both pensionado visa and reforestation visa.  As you would have guessed, pensionado visa is a permanent residency visa for the retirees of Panama.  Reforestation visa requires only an investment of $40,000 for a reforestation project.

Treaties and Orders

Tax treaties are common between countries which sometimes call for sharing of information on bank accounts located within their jurisdictions.

Mutual Legal Assistance Treaty is signed between countries which enjoin them to help other jurisdictions in obtaining evidence for criminal cases.