Annual Maintenance of Offshore Companies
What are the components of the annual renewal fees?
The annual renewal fees consist of two main parts - mandatory fees and optional fees. The mandatory fees cover the absolute minimum necessary to maintain the company in good standing. The optional fees are charged for services which enhance and improve the offshore company, but are not absolutely essential. Usually, the type and the amount of the optional fees depend on the exact configuration of the offshore company. Sometimes, the optional fees may involve administration charges calculated on time-spent basis.
The mandatory fees always include (a) the fixed Government fee, and (b) the Registered Office and Registered Agent fee, (c) compliance fee – file review and KYC update.
The Government fee is essentially a fixed amount of state duty paid by all offshore companies instead of the income tax. Regardless of the name (franchise tax, exempt duty, registration fee, etc), the Government fee is quite simply a fixed tax levied by the Government for the privilege of being incorporated "under the flag of convenience" of the particular tax haven country.
TThe Registered Office and Registered Agent fee is a professional fee. It is paid to the Registered Agent for his role of an official intermediary between the owners of the company and the Government of the tax haven. This fee also covers the usage of the Agents´ office address as the legal address of the offshore company. The Registered Office/Registered Agent fee also covers the minimum administrative services necessary to comply with the regulations of the International Business Companies Act. The law requires that in order to be in good standing every offshore company must have a Registered Office and a Registered Agent, so this service is pretty much mandatory. Compliance fee is paid for periodic review of the Belize IBC file and update of the Due Diligence documents of the company owners, directors and other involved persons. Such frequent document verifications are required by law therefore the fee is part of the mandatory payments.
The optional fees would be payable for offshore company management services, if such are chosen. Such optional services would include (a) third-party (nominee) directorship services; (b) nominee shareholder services; (c) third-party (nominee) account signatory services; (d) "virtual office" services, such as mail and fax forwarding, document remailing and call handling; (e) miscellaneous secretarial, legal, accounting and managerial services, billed either on a fixed-amount or time-spent basis.
For the sake of simplicity, the annual renewal fees are normally invoiced once a year, usually all at the same time when the Government duty is payable. The fixed-amount annual renewal fees are payable in advance, for the following year. In more complicated offshore company management appointments some fees may be billed on time-spent basis. These are invoiced either monthly or quarterly.