Saturday, 23 March, 2019
3Tel Aviv23:11
Page specific SEO text here
Non-Resident Companies: Theoretical Section

Offshore companies are a topical and multi-faceted issue. Everyone may have their own opinion on this.

  • Politicians: The debate on this issue may have a positive impact on their ranking in the elections (for example if they promise to introduce more stringent prohibitions for offshore vehicles thus improving the economic situation of their country).
  • Journalists and media: This is a popular topic which can be examined both negatively (for example, inter alia, the risk of clients whose operations may not correspond with legal requirements; cooperation between budget organisations and non-resident companies etc.) and positively (for example, inter alia, the inflow of investments into the local economy, the improved competitiveness of the entrepreneurs representing that local economy on the international market, the creation of new jobs etc.).
  • Participants in the professional financial market: For bankers, an offshore company is a standard business entity whose transactions are supervised and controlled more closely in accordance with the existing regulations.
  • Entrepreneurs: Frequently, a non-resident company for the businessman is the only way to keep the place in the market under ever-increasing competition.

In this section, we shall discuss the main issues and terms used in both the registration and management of non-resident companies.

The primary issue of interest to many entrepreneurs is that of legitimacy (i.e. the legal status) of the use of a non-resident company in the entrepreneur’s business. In order to illustrate this point, we use the following example:

Example: In the old days, when the free market was just being created, a merchant was carrying a consignment of goods. In order to deliver them to the buyer, he had to cross a toll bridge over the river. The merchant could proceed as follows in order to save costs:

Option 1

  • Try to cross the bridge at night while the guard is asleep and avoid paying the toll, OR
  • Attempt to impersonate a person entitled to pay only half the toll such as a disabled person, OR
  • Attempt to bribe the guard thus paying them only part of the due toll.

All of the above methods are illegal.

Option 2

  • Spend time and effort going to the neighbouring bridge, which is toll-free, and cross the river.

This method is legal.

It is the second option that reflects the use of non-resident companies in business practice. Here, corporate and tax legislation in other countries of the world and their rational use in the entrepreneur’s commercial operations play the role of the “neighbouring bridge”.

However, it would be perfectly rational if the entrepreneur chooses voluntarily to cross the river via the first toll bridge, provided that such a bridge is more comfortable, convenient and operated by a particularly educated guard who is simply pleasant to deal with. In this instance, somebody may be happy to pay for such service. Alternatively, in a free market, nobody can force the merchant to cross the river via the first toll bridge for whatever reasons.

In this section you will also find useful information on the following issues:

  1. The main features of a non-resident company: company name, registration number, share capital.
  2. Existing types of companies.
  3. Directors and shareholders of companies.
  4. Corporate documents of the company.
  5. The meaning of the main terms and concepts used in the incorporation of non-resident companies.
  6. Frequently asked questions.
Info Lines:
Tel Aviv:+972-37-382009