Offshore companies. The nature of offshore zones and offshore companies III Legal status, ownership and management of an offshore company. IV Advantages of offshore companies and offshore zones.

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I Introduction

II The nature of offshore zones and offshore companies

III Legal status, ownership and management of an offshore company.

IV Advantages of offshore companies and offshore zones.  

V Disadvantages and problematic issues of off shores

VI Creation of free economic zone in Navoi region

VII Possible solutions and conclusion


       Money has no smell

            Titus Flavius Vespasianus.


When Tit, the son of Vespasian1 reproached his father in tax levy on public convenience, Vespasian has brought first money, acquired from this tax and asked whether that money smells. Obviously the answer was no and further this expression became a catch – phrase.

Should a civilized society be indifferent to the money origins, the means of money obtaining or those issues don’t have to bother?  Should people set a mind on the question that sometimes “dirty” money can raise an economy of developing state?

In this coursework I want to consider not only the schemes of offshore business conducting, but also problematic issues related to offshore business, which became less popular recently exactly because off shores became a money laundry.

Nowadays, the main objective of the entrepreneurs is not only the profit making, but also legal means of tax exemption, deliverance from currency exchange regulation, import/export quota, other fiscal and bureaucratic problems evading or not paying of the taxes at all.

One of the measures of tax minimization planning is offshore business, which is widely used all over the world. This method can be defined as usage of companies, established in the zones with low taxation in the absence of exchange controls.

        The term “offshore” have become widespread in the second part of the XX century. Historically first states who have started the policy of foreign capital attraction and linearization of foreign-economic activity were island states, as Bahamas, British Virgin island, Maine, Cyprus and


1Titus Flavius Vespasianus, known as Vespanian, 9th Roman Emperor.

others. Later, Lichtenstein, Luxemburg, Gibraltar, Panama, etc have also become offshore zones (the list of offshore centers is attached in appendix). Further, the practice of off shores has illustrated that several territories within the country, as Geneva in Switzerland or Delaware State in the USA can also be offshore zones.      

The preconditions of the off shore appearance was intensive development of the high – tech branches. As a result, some changes have occurred in the correlation of the forces in the world economy, some branches have appeared, some disappeared.

The leading factor of some zone to be ranked as an offshore one is maximum liberal views on tax regulations and the opportunity for the registration of nonresident company. Another significant factor is political and economical stability in the region. Meaning that offshore zones should not have rough political events, crises and possibility of coup d'etat. As for economical stability then the national currency has to be stable, there should be absence of inflation, broad terms of import/export.

Besides of those factors, high development of telecommunication and international transport network also has great importance. Language, functioning on the territory is also essential, as well as level of confidential commercial information protection, degree of bank service development.

Undoubtedly, the cost of offshore company support (registration fees, budget deduction and payment for secretary, audit and other services).

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Offshore company is a company, incorporated in a foreign nation and does not conduct most of its business in a country where it is officially based2.

Legal status, ownership and management of an offshore company.

The legal structure and operation of an offshore company reflects common law-based limited company.

Having the status of a legal person, an offshore company is quite separate from its owners (shareholders) and managers (directors). This fact often considered as a means of protection against litigation.  

As any limited company, an offshore company is ...

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