For decades, offshore companies were synonymous with tax optimisation, discretion — and at times, outright opacity. Today, the landscape has shifted profoundly. Driven by sweeping international reforms, intensified measures against tax evasion, and strengthened transparency requirements, many are now asking: Is this the end of offshore companies?
The answer is more nuanced than it may appear. No — offshore companies are not disappearing. They are evolving. Radically.
What Is in Decline: Opaque and Non-Compliant Structures
The use of offshore entities for anonymity, income concealment, or fictitious activities has been largely curtailed:
• The end of total anonymity: Most jurisdictions now mandate registers of Ultimate Beneficial Owners (UBOs), often accessible to foreign tax authorities.
• Automatic exchange of tax information: Through the Common Reporting Standard (CRS) and FATCA, tax administrations now share banking and fiscal data on a global scale.
• Pressure on “letter-box” jurisdictions: Structures without genuine substance — no premises, no activity, no staff — are squarely in the crosshairs of the OECD, the FATF, and national regulators.
• Banking refusals: Opening a bank account for an offshore company with no clear economic activity has become extremely difficult, if not impossible.
The United States: An Exception to the Transparency Trend
While the global trend points toward greater openness, the United States stands out as a notable exception. Although a signatory to FATCA, the US has not adhered to the OECD’s CRS and does not systematically transmit non-resident financial information to foreign authorities.
Certain US states — such as Delaware, Nevada, and Wyoming — continue to offer:
• Enhanced confidentiality: No public obligation to disclose beneficial owners.
• Streamlined, rapid incorporation procedures.
• Tax advantages for non-residents: In some cases, no tax on income generated outside the US.
This has led some experts to describe the United States as “the new tax haven” for non-Americans, despite its official rhetoric on transparency.
What Is Strengthening: Compliant, Structured, and Strategic Offshore Models
Offshore entities are not vanishing; they are becoming more professionalised. When used within a lawful framework, they can still play a decisive role in international strategies:
• International group structuring: Centralising certain functions — licensing, asset holding, intellectual property — within a stable jurisdiction.
• Asset protection: Holdings or foundations in stable, fiscally advantageous jurisdictions, governed with clear oversight.
• Controlled tax optimisation: Compliance with OECD principles, notably the requirement for genuine economic substance — premises, personnel, and effective activities.
• Succession or expatriation planning: Using recognised legal structures (Trusts, Private Interest Foundations, etc.) with full transparency.
The Authorities’ Message Is Clear: “Offshore, Yes — But Not at Any Price”
The era of the “ghost company” is over. Today, to be viable, an offshore entity must:
• Possess a clear economic rationale.
• Demonstrate genuine substance.
• Be declared in the beneficiaries’ country of residence.
• Comply with local tax and accounting obligations.
Conclusion: Not the End, but a Transformation
This is not the end of offshore companies, but rather the end of an outdated model. The offshore structures of today must be:
• Lawful
• Transparent
• Strategic
• Professionally managed
How a Fiduciary Firm Can Assist You
In this new environment, engaging an experienced fiduciary is more essential than ever to address your questions comprehensively. At Fidpro Suisse SA, we help you select the most suitable structure for your specific needs.
Offshore 2.0 marks the dawn of a new era — more exacting, yet still highly effective, provided one is properly guided. Contact us for a confidential consultation.