How to master off-shore businesses

Many countries hold the view that the flow of money should be restricted, regulated or monitored, and obviously, taxed.

For instance, the restrictions put in place by the Federal Reserve Bank of South Africa make it difficult to repatriate monies from South Africa.

What is the future of the offshore industry?

Investors who have set up overseas also need to remain alert to changing regulations.

The increasing crack-down on traditional offshore tax havens has seen a move in jurisdictions like the British Virgin Islands towards becoming more transparent and legitimate tax-efficient jurisdictions.

As such, the attractions which an off-shore jurisdiction has today may not remain true a few years down the line.

Additionally, the international crackdown on money laundering and terrorism financing driven by organisations such as the Financial Action Task Force (FATF) continue to put pressure on the offshore industry, compelling countries to comply with international standards.

Foreign investments

Likewise, the shift in the business environment towards increased sharing of information is also diminishing the benefits associated with off-shore jurisdictions.

Many off-shore jurisdictions continue to offer entrepreneurs efficient strategies for structuring their investments.

As more jurisdictions compete for foreign investments, many countries are keen to be seen as having investor friendly business environments as well as being economically and politically stable.

If properly thought out and structured, an off-shore company can enable an investor to maximise the legal, accounting, tax and commercial benefits the business offers.

Kiunuhe is a Nairobi advocate. Email: ak@africalegalnetwork.com.