Changes to Setup Offshore Company post covid-19 pandemic?

Post date: Jan 27, 2021 10:23:42 AM

Covid-19 pandemic has not only taken lives of many but also has impacted all major sectors reducing significant business revenue generation around the globe. Needless to say, it has also majorly impacted the offshore company sector.

Several changes in offshore banking sector to set up offshore company need to be made in the post pandemic world. These include:

1. Offshore digital banking: Domestic banks were initially not very keen about going digital. But in the post pandemic world, since the account holders are usually from various countries offshore banks are offering smooth digital transaction options.

2. Increased cyber security and data privacy: Since, offshore banks are going online they are taking special care to look into the matter of heightened cyber security to protect sensitive client data.

3. Increased customer faith in offshore banks: Even during covid-19 severe economic crisis these banks have thrived and carried out successful business. This has increased customer trust in offshore banking.

How to register offshore company in USA?

An offshore company has to register in the state where it conducts business. The company has to pay federal and state income taxes on the money it has earned within the US jurisdictions.

The offshore company requires registering with the Federal government depending on the nature of business, for example: a pharmaceutical company.

IRS registration: According to FACTA (The Foreign Account Tax Compliance Act) offshore financial institutions need to register and report IRS about daily transactions and the identity of the account holders. However, IRS exempts NGOs (Non-Profit Organizations) and small Government Houses from regular reporting. In case, IRS registration and reporting process is not done the offshore institution is subjected to IRS investigation and subsequent penalties.