Tax Optimization Strategies for Your Business

In today’s globalized world a successful corporate strategy is the one which extracts advantages from the opportunities the international trading environment is able to offer. Globalization, characterized by opening borders between countries, efficient availability of any kind of information on the Internet, and the ability to communicate in real time with any part of the world in different ways help business owners better understand potential advantages different countries are able to offer and how to implement them in practice.

By expanding a corporate structure, involving foreign entities and individuals in daily business management, it is possible to legally and significantly minimize taxes. In order to achieve this, it is necessary to understand regulations of different countries in detail, as not all the conventional tax-optimization strategies which can be found on the Internet are legal, effective and/or may be applied in each particular situation.

A professional and experienced financial consultant is able to work out the most appropriate strategy for personal and corporate tax optimization, which will be crafted to a person’s individual needs and objectives. With the help of an open and constructive dialogue it is possible to create and realize a good strategy which will improve either a personal or corporate financial situation, thus maximizing profits.

An offshore company formation is often used as a tax optimization tool, and in most cases it is an effective strategic step, when structured and incorporated correctly. If earlier offshore companies were formed mainly with the sole aim of bringing one’s wealth abroad, today an offshore company is regarded as almost an ideal instrument for tax optimization, estate holding, investments, asset protection, copyrights, aircrafts and vessels registration. In addition, it provides a significant level of privacy and confidentiality to its members.

At all times it is important to distinguish tax optimization activities from tax evasion. Tax evasion consists of illegal activities by means of which private persons and corporate entities do not pay taxes due. Such unethical behavior must be avoided at all times.

In addition, it is not possible to apply a ready-made tax optimization solution in practice, as each strategy must be in accordance with the regulation of a person’s country of residence and citizenship. An effective and legal tax optimization strategy for one person or company does not necessarily present the same opportunity for another entity. If too little attention is paid to crafting the best strategy for tax optimization or the advice of an unprofessional business advisor is followed, a person or a company risks acting unlawfully even without having such an intention.

Therefore, it is important to discuss each particular situation with a professional and experienced financial consulting company which has an international presence. It is necessary to remember that tax planning is not a one-time activity: the regulations of different countries change and different business deals may require different approaches and strategies; therefore, an effective tax planning strategy must be worked out and constantly evaluated and monitored, in order to introduce any changes for enhancing its efficiency and success.