If you want to establish an offshore company as non resident it's essential to be able to show that the central management and control is overseas.
In this posting we list below some of the key considerations and structuring opportunities to assist in demonstrating that management and control is located overseas:
All meetings of the boards of directors should be held in the overseas country (We'll assume it's Jersey for this posting) and the articles of association of the company should prohibit meetings being held anywhere else other than Jersey.
The majority of the board of directors should be tax resident in Jersey. The chairman should be resident for tax purposes in Jersey, particularly if he/she has a casting vote.
It's possible to form a quorum for decisions to be taken outside the normal board meetings. However, such a quorum should consist of a majority of Jersey resident board members. Non Jersey directors of the Boards should not by themselves be able to form a quorum.
Individual board members should have the expertise to control the business and you should therefore avoid having just professional or nominee directors. It's for this reason that the standard method of ensuring control overseas put forward by many offshore incorporators (ie having nominee overseas directors) won't actually work.
You should ensure that board meetings are fully minuted.
Board meetings should be held regularly. The exact frequency will depend on the amount of activity but should be at least quarterly.
It's important that the board of directors should take all decisions affecting matters of policy or management of the companies' businesses at meetings of the board. In addition there should be documentary evidence that supports the decisions made. This should include financing issues, appointment of staff, capital expenditure, acquisitions, key policy decisions and the final accounts.
As we've looked at in other articles it's essential that the overseas board of directors should not just rubber stamp directions of any UK shareholder. It should be able to be evidenced that the directors have ultimate authority in all matters and do not report back to any other person.
Books of account and company records including minute books and other documents required by statute should be kept in Jersey.
Members of the board should avoid acting in matters regarding the management and control of the company business when outside Jersey. If this is not possible, conference calls should be set up with a quorum of board members represented by a majority of Jersey directors.
