Offshore and Film (Movie) Production

by Milos Itic on January 26, 2011

There are many offshore companies in the film and movie market.

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Offshoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting.

Production offshoring also known as physical restructuring of established products involves relocation of physical manufacturing processes to a lower-cost destination

Offshore company is a company which is incorporated outside the jurisdiction of its primary operations regardless of whether that jurisdiction is an offshore financial centre.

Offshore companies have the following features which may be beneficial:

  • Taxation – In most jurisdictions authorities will not seek to tax companies which they treat as non-resident, save perhaps for a nominal fee -$300 BVI, £320 Isle of Man etc.
  • Tax haven is a country or territory where certain taxes are levied at a low rate or not at all.
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Typical uses of offshore companies:

  • 1. Consultancy, Professional Services, Agency

Professionals, consultants, artists and many self-employed individuals can gain substantial advantages by working as employees or as external consultants of offshore companies, of which they may be the sole shareholders and, if they want to, the sole directors.

  • 2. Employment of Expatriate Staff

Expatriates working overseas can frequently benefit from being employed through an offshore employment/consultancy company. This can avoid tax being deducted at source. By not remitting the full salary it can minimise tax and avoid exchange control difficulties in the country of temporary residence. This arrangement will be particularly attractive to expatriates working in politically unstable countries.

  • 3. Property Owning Companies

There are often significant advantages in using an offshore holding company for the purpose of holding property. The advantages of such an arrangement include the avoidance of inheritance tax, capital gains tax and the ease of sale which can be achieved by transferring the property owned by the company and reduction of property purchase costs to the onward purchasers.

  • 4. Investment Companies

Funds accumulated through investment companies set up in offshore areas can be invested or deposited throughout the world and whilst generally returns or interest payable in respect of these funds will be subject to local taxation, there are a number of offshore areas in which funds may be placed as bank deposits where the interest and/or the capital gains are paid and kept gross. To invest in global securities including mutual funds not available to “local” citizens. Offshore jurisdictions are typically less invasive allowing for aggressive and unrestrained Free Enterprise.

  • 5. Copyrights, Patents and Trademarks

Offshore companies can purchase or be assigned the right to use copyright, patent or trademark. Royalties can then be accumulated offshore although often royalties may suffer withholding taxes at source. An interposing holding company in some cases may allow a reduction in the rate of tax withheld at source.

  • 6. Privacy

A high net-worth individual can save professional fees and unwanted publicity by owning property or other assets through an offshore company. ECI can provide a wide range of services in the field of privacy protection.

  • 7. Protection

To file first position liens against assets and property closing the door to predatory litigation before it begins. To segregate high-risk investments from other more secure holdings. To protect retirement funds from possible bankruptcy. To provide for the transfer of assets for the next generation in an efficient and discreet fashion. Nominee directors and officers can allow you to conduct business transactions for your benefit while you remain anonymous. To access your funds with corporate debit or credit cards thereby maintaining absolute confidentiality.

For Independent Filmmakers and Feature Movie Makers, this is very good opportunity to start your own company.

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One comment

Oh, this is very use full for understanding basic principle of off shore companies.

by Milan on January 27, 2011 at 10:27. Reply #

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