Offshore Company Formation

Web Site - www.oscf.eu

GUIDE TO OFFSHORE

CHOOSING

JURISDICTION

FOR YOUR OFFSHORE

COMPANY

Most Providers of Offshore Service have a list of traditional selection criteria, which stayed the same for years. The Offshore, however, has moved on. We will outline the traditional criteria later, but the more important criteria are as follows:

CORPORATESTRUCTURE There are only certain jurisdictions which still allow "real" bearer shares; whether you require Bearer Shares, currently the only jurisdictions are Antigua, the Seychelles, Panama, and Marshall Islands. Other jurisdictions advertise they provide bearer shares but it's not "real" bearer shares. The owner of the so called bearer shares must be identified and they must be kept at the] Registered Office. This type of bearer share is not recommended as the beneficial owner is known and it is difficult to transfer ownership as you do not have possession of the shares. Most offshore company jurisdictions allow Corporate Directors but not a11,so you should

check whether the jurisdiction you have selected allows such Directors. Some jurisdictions require a minimum of two or three Directors rather than just one. This can make yom corporate structure very unwieldy and time consuming to get things done, unless you use OSCF's nominee Director facilities. Only certain jurisdictions offer LLC's, while all jurisdictions offer the traditional Offshore Company or IBC, sometimes called an Exempt Company.

INVESTMENTS As above, if you intend to invest through yom Offshore Company, using managed fund

accounts provided by various financial institutions, an appropriate jurisdiction must be selected.

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OSCF Universal LLC, 160 Greentree Drive, Suite 101, Dover, Kent County, Delaware 19904

Offshore Company Formation

Web Site - www.oscf.eu

LANGUAGE Most Latin American offshore centers issue incorporation documents in Spanish with an English translation. This is advantageous if you are dealing in Latin America or Spain. It is usually not a problem in North America or Western Europe but it can be a problem in Eastern Europe and Asia, if you are signing major contracts. The reason is that the legallanguage of the iricorporation documents is Spanish, despite the fact that there is an English translation. This sometimes makes companies hesitant about what legal problems may arise later, if there is a contract dispute. Often, however, this can be resolved by having a new translation with a translator acceptable to both contracting parties.

THE EU SAVINGS TAX DIRECTIVE Besides the EU countries, the Directive also covers ali the EU tertitories and dependencies and therefore includes the major offshore centers in the Channel Islands (Guernsey, Jersey and the Isle of Man) and the Caribbean tertitories (Anguilla, Bermuda, BVI, Cayman Islands, Montserrat and Turks & Caicos). The Directive carne into effect on 1 July, 2005. The Directive requires ali EU states and tertitories to provide for automatic information exchange on tax matters, conceming EU citizens and residents. For example, a bank in BVI holding an account for a German resident will be required to report that information to the German authorities. At this stage, The Directive only applies to personal accounts, not to corporate accounts. It seems likely, however, that in due course, corporate accounts will be included. It would therefore be prudent to take the Directive into account when choosing a jurisdiction for the long term.

THE TRADITIONAL

CRITERIA:

POLITICAL

& ECONOMIC

STABILITY

This is a fairly obvious requirement. Ali the offshore company jurisdictions offered by OSCF have complete political and economic stability.

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OSCF Universal LLC, 160 Greentree Drive, Suite ioi, Dover, Kent County, Delaware 19904

OSCF
Web Site - www.oscf.eu LEGISLATION

Offshore Company Formation

The jurisdiction's legislation should be modem, up to date and specially desired for offshore companies. It should have few restrictions and allow the offshore company fulllegal freedom to engage in any legal business. It should also provide for confidentiality and complete privacy. OSCF has chosen the jurisdictions best meeting these requirements.

CORPORATESTRUCTURES The jurisdiction's legislation should provide for the following desirable corporate features: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Limited Liability Limited Director's liability Minimum statutory filing obligations; and no requirement for financial statements (audited or otherwise) to be provided to the Govemment Nominee Directors and nomince Shareholders allowed Corporate Directors and Corporatc Shareholders allowed Bearer shares allowed No disclosure ofbeneficial owner to Govemment authorities No public record of Directors and Shareholders Low capital requirements; No paid up capital requirements; Annual Govemment fees not based on amount of share capital Director and shareholder's meetings allowed to be held anywhere in the world; and meetings may be held by telephone All common suffizes denoting limited liability to be allowed

Few jurisdictions meet all the above desirable features. OSCF's web site shows which features are applicable to which jurisdiction. Contact us to determine the jurisdiction with the best mix of features, meeting yout requirements.

AVAILABILITY

OF PROFESSIONAL

SERVICES

Good legal and accounting services should be available within the jurisdiction, but such services can be retained anywhere, depending upon the circumstances. They do not have to be within the jurisdiction.

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OSCF Universal LLC, 160 Greentree Drive, Suite ioi, Dover, Kent County, Delaware 19904

SCF
Web Site - www.oscf.eu

Offshore Company Formation

COMMUNICATIONS
It is more important to have good communications with your Offshore Services Provider, than it is with the jurisdiction. Regardless of where you have your offshore company, it is OSCF with whom you would communicate. We, of course, have excellent international telephone services, broad band high speed internet and the usual couriers (UPS, FedEx, DHL, etc.).

LAW OF THE JURISDICTION

The law of the jurisdiction can be: English common law European civil law US law

Most offshore jurisdictions operate under English common law or a variant thereof. European civil law jurisdictions are much more restrietve than English common law jurisdictions, and should be avoided where possible.

To get further infonnation please contact us!

CONTACT DETAILS

dr. Gulcsi Bernadett

Managing Director OSCF Hungary Kft. OSCF - Offshore Company Formation Website: www.oscf.eu, E-mail: bernadett@oscf.eu Mobile: (+36) 30-860-4004, Tel: (+36) 1-269-3489, Fax: (+36) 1-700-2729 Address: Bank Center - Citibank Tower, 1054 Budapest, Szabadsg tr 7., II. floor 221.

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OSCF Universal LLC, 160 Greentree Drive, Suite 101, Dover, Kent County, Delaware 19904

Offshore Company Formation

Web Site - www.oscf.eu

DISCLAIMER

The material set out in this Internet service is for information purposes only and cannot be taken to constitute legal, accountancy or taxation advice. The information is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specitic facts irivolved. Given the changing nature of laws, rules and regu1ations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this Site. Accordingly, the information on this Site is provided with the understanding that the authors and publishers are not herein engaged in rendering legal,

accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, clients are specifically advised and warned that they should seek appropriate and timely tax and legal advice from a qualified licensed professionallicensed to render such professional advice before forming a corporate entity. While we have made every attempt to ensure that the information contained in this Site is accurate. All information in this site is provided with no guarantee of completeness, accuracy, and timeliness or of the results obtained from the use of this information, and without warranty of any kind, expresses or implied. In no event will OSCF, its related corporations, directors, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this site or for any consequential, special or similar damages, even if advised of the possibility of such damages.

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OSCF Universal LLC, 160 Greentree Drive, Suite 101, Dover, Kent County, Delaware 19904