Onshore companies

What are onshore companies?

They are a less well-known term, but often found in connection with international business and offshore companies. Although offshore companies are more often an inflected term, in order to properly orientate yourself in the issue, it is necessary to know the difference between them and offshore companies.

Onshore companies (from the English “on land”) is a designation for companies registered in a traditional jurisdiction, i.e. in states that cannot be called tax havens. Usually European countries or North American states are referred to as onshore jurisdictions. Among other things, these are states with a transparent public register and a traditional concept of corporate affairs.

So they are somewhat the opposite of offshore companies. The second point of view in the framework of their differentiation is the assessment with regard to the country of residence. This means that this company can also be considered offshore, if the offshore company is a resident country, i.e. the country of residence or registration of the company.

In this case, if we are describing a company in another jurisdiction that is otherwise an onshore jurisdiction, we will refer to that company as offshore, as it is overseas in that sense. In connection with this, it is therefore necessary to perceive about which country, or companies are spoken to and in what context.

What is the need to know about an onshore company?

As for specific cases of typical offshore destinations, overseas states in exotic destinations are most often mentioned as offshore states. These are also called tax havens. This is due to low or no taxation of companies there. In contrast, onshore companies are usually not used for tax optimization.

Onshore companies are mainly used to do business in onshore jurisdictions and are used for specific purposes within international corporate structures. They can be used as holding companies in the case of countries with low dividend taxation, etc. Compared to offshore companies, onshore companies have numerous advantages.

Specifically, they are often much better perceived by the public and business partners. On a concrete level, for example, it is much easier to open a bank account of an onshore company than, for example, an offshore company, which often has a confusing ownership structure. Such a company is usually advantageous for doing business in onshore destinations, however, in some cases it is suitable for international trade and other activities.

However, it is always necessary to evaluate and consider all aspects of the business in order to set up a structure that includes both onshore and possibly offshore companies.