New Offshore Solutions
The Onshore Alternative
This report outlines non-offshore jurisdictions offering corporate structures with favorable tax regimes. These vehicles allow international businesses to benefit from low or exempted tax treatments similar to offshore companies, while maintaining strong reputations and compliance with international standards.
As international regulatory pressure increases on traditional offshore centers, businesses are increasingly adopting “onshore” alternatives: corporate structures based in reputable jurisdictions offering favorable tax treatment. These vehicles maintain international credibility while delivering significant tax efficiencies.
This report examines key non-offshore jurisdictions and entity types, namely: Canada (Ontario LP), Denmark (KS), Estonia (OÜ), Ireland (Ltd), Netherlands (CV), Sweden (KB), United Kingdom (LLP), United States (LLC), and Cyprus (Ltd).
Jurisdictions, Entity Types, and Tax Advantages
Canada Ontario LP (Limited Partnership)
Canada Ontario LP (Limited Partnership)Not taxable at entity level if partners are non-residents and no Canadian-source income.
No corporate tax.
Flow-through structure (partners taxed individually).
Needs careful structuring to avoid Canadian reporting obligations.
Denmark K/S (Kommanditselskab)
Denmark K/S (Kommanditselskab)Transparent for tax purposes.
No tax at entity level if partners are non-residents.
Only taxed on Danish-source income.
Beneficial for holding and IP structures; respected EU jurisdiction.
Estonia
OÜ (Private Limited Company)
Estonia 0% corporate tax on undistributed profits.
Corporate tax (20%) only applies when dividends are paid.
Very modern, digital corporate environment.
Excellent for tech companies, startups, and holding structures.
Ireland
Ltd (Private Limited Company)
Ireland12.5% corporate tax on trading income.
R&D tax credits (25%).
Extensive Double Taxation Treaties (DTTs).
Reputable EU jurisdiction, strong for EU trading and IP holding.
Netherlands CV (Commanditaire Vennootschap) Limited Partnership
Netherlands CV (Commanditaire Vennootschap) Limited PartnershipTax transparent if structured properly (“open” vs “closed” CV).
No corporate tax at entity level for non-residents.
Access to Dutch DTT network if structured right.
Critical to set it up as “closed” CV for confidentiality and efficiency.
Sweden KB (Kommanditbolag Limited Partnership)
Sweden KB (Kommanditbolag Limited Partnership)Tax-transparent entity.
No corporate tax if no Swedish-source income.
Respected EU/EAA jurisdiction.
Suitable for structuring European holdings.
UK LLP (Limited Liability Partnership)
UK LLP (Limited Liability Partnership)Tax-transparent if no UK-source income and no UK activities.
Members taxed individually.
No corporate tax at entity level.
Must be managed outside UK to avoid “UK permanent establishment” issues.
USA LLC (Limited Liability Company)
USA LLC (Limited Liability Company)Disregarded entity or partnership for U.S. tax purposes (if no U.S.-source income).
No federal tax if properly structured.
Pass-through taxation.
Delaware, Wyoming, New Mexico popular; must file forms even if no tax due.
Cyprus Ltd (Private Limited Company)
Cyprus Ltd (Private Limited Company)12.5% corporate tax.
No withholding tax on dividends, interest, royalties (under conditions).
IP box regime (effective rate ~2.5%).
Notional Interest Deduction (NID) on new equity.
Strong EU jurisdiction, ideal for IP, holding, and finance companies.
Key Observations
Tax transparency is a central concept for many of these structures (LPs, LLPs, LLCs, CVs, KBs).
Non-resident partners/members often avoid taxation if there is no local-source income.
Entity classification (for local and foreign tax purposes) must be managed carefully (e.g., CV open vs closed, U.S. LLC foreign reporting).
Substance requirements (offices, directors, employees) are becoming increasingly important post-BEPS and OECD initiatives.
Practical Uses
Holding companies for cross-border dividends.
IP ownership and licensing.
Trading and consulting companies.
Re-invoicing and procurement centers.
Example Use Cases per Entity Type
Compliance Considerations:
While offering significant tax benefits, these structures must be carefully managed to ensure:
- No domestic-source income (where necessary).
- Proper foreign tax classification.
- Substance and reporting compliance (e.g., economic substance rules, CFC reporting).
With the right planning, these alternatives offer strategic tools for optimizing international tax exposure and protecting profits, all while operating within reputable and recognized legal frameworks.
Key Advantages
Tax Transparency:
Structures such as LPs, LLPs, CVs, and LLCs are generally treated as flow-through or disregarded entities, ensuring no corporate tax at the entity level when structured correctly.
Low or Deferred Corporate Tax:
Jurisdictions like Estonia and Cyprus offer low effective corporate taxes or defer tax until profit distribution.
Global Treaty Networks:
Entities based in Ireland, Cyprus, Netherlands, and others enjoy extensive Double Taxation Treaty (DTT) benefits, facilitating international business operations.
Flexibility:
These structures are ideal for cross-border holdings, IP management, consulting services, international trading, and investment activities.
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Packages and Prices!
Inclusions
Year 1 Incorporation and service fees.
Optional Services (Bank Account opening, Nominee services, Certification of documents, amongst others).
Annual Renewal service fees for year 2 and subsequent years, to keep your company in good standing and full Compliant at all times.
