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An International trading company is perfect if the owner of the company does not live in the same country as where he purchases the goods and where he sells the goods. The suppliers and customers must live in any country other than the country the owners of the company live in.


For example, the company buy toys from China and sell them in the UK, while the business owner lives in a South Africa. 

Let us assume that the net cost of a particular toy from China is $10 and the business manages to sell it in UK for $70. This generates a profit of $60. The company will then pay tax on this profit at the applicable rate of tax in South Africa, which is 28%. The company will pay $16.80 in tax and be left with a net profit of $ 43.20


We register a company in an offshore jurisdiction, as this can result in substantial tax savings. 

Let us compare the example above with an alternative scenario, in which the business owner chooses to register a company offshore instead of using a local company.

The offshore company will again buy the toy for $10 and sell it for $70, generating the same profit of $60. However, as the offshore company will be registered in a jurisdiction where no income tax is payable, the offshore company will retain the full $60 of profit.


The $16.80 of tax is completely avoided. In this example, the increase in net profit from $43.20 to $60 represents an increase in the overall profitability of the business of 39%!


There is no need for the physical shipment of the goods to pass through the country in which the offshore company is based. Instead, the toys will be shipped directly from China to the UK, in the same way as when a local company was used.

The Isle of ManNevis, Belizeand BVI are a few that would be appropriate for this purpose. It really depends on your turnover to fit into the budget to where it makes business sense to set it up.

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