International and/or offshore companies may be used in a variety of ways to accumulate foreign source income or to preserve wealth.
Such uses may include the following:
International trade
The movement of goods across international borders offers many opportunities for the use of international companies. This may take the form of transfer pricing structures, commission agencies, provision of confirming finance, or the hire or leasing of capital assets.
Consultancy service
The provision of financial, engineering, management or computer consultancy services to overseas contractors or foreign clients can be routed through foreign companies. An international company may also be used to provide the services of entertainers or sportsmen to global promoters.
Investment holdings
International investment companies are frequently used to hold investments in foreign based subsidiary or associated companies, foreign real estate, equities or bonds quoted on overseas or domestic stock exchanges, and foreign joint venture projects.
Licensing
Intellectual property such as patents, copyrights, designs, computer software, technical know-how, and image rights, may be owned by an international company and licensed to third party licencees or sub-licencees. International franchises can be similarly structured through an international company.
Shipping
Overseas companies are the entities most commonly used for the ownership or chartering of vessels registered on international shipping registries. Ship management and other maritime services are often provided through international business companies. Private yachts may also be owned by an international company.
Finance and banking
Inter-group loans may be routed through an international finance company or a "captive" overseas bank to rationalise finance costs and to centralise funding controls. Financing of overseas subsidiaries or joint ventures may be more efficient if directed through an international company. An international finance company or bank may also be used to centralise treasury or money management activities, to raise syndicated loan funds, or to provide finance to group entities or clients.
Captive insurance
One of the more sophisticated uses of an international company is to effect insurance arrangements through an overseas captive insurance company. The captive insurance company will insure the related company's risks either on a self assured basis or under cost effective reinsurance arrangement.
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