A Merchant Account in Offshore
May 6, 2016
The Advantages of Offshore Credit Card.
The technological development in the last several decades has resulted nowadays in the rapid spread of online business models. Virtual transactions are already a norm and a new modern way of doing business.
Numerous businesses, which host their commerce 100% virtually, are in fact exposed to multiple risks as well as regulations. Also, in case the trade operates all over the world, it’s reasonable to register a legal entity in a jurisdiction, providing most favorable conditions for such kind of businesses.
The majority of entrepreneurs seek for the privacy, minimum level of taxation or no taxes at all and low regulation requirements. An international e-commerce trade, which wants to succeed on the web, become more lucrative and experience less hassle, would most likely accomplish that by investing in an offshore business account package, that includes options of company incorporation and dealing with banking formalities.
An offshore merchant account makes credit card payments possible via a bank in an overseas hub, not in the country, the business is run in.
The most famous global companies, like Apple, Google or Microsoft, have been enjoying the benefits of the offshore legal and financial structures for a number of years. They incorporate offshore subsidiaries in the tax heavens and in such a way reduce their US tax burden. It helps them to serve various segments of their worldwide market in the most optimal way.
The modern newly built business can follow the model and incorporate overseas subsidiaries in low-tax jurisdictions to provide services to the customers outside the country.
To enjoy the advantages of such an offshore option in full and minimize the taxes, incorporate an offshore business entity, which you neither own nor control. It can become the best platform for international operations and help you in getting the most of the possible tax benefits.
The main advantages of an offshore account for the online businesses are the following:
- Tax burden is lower than if you have a domestic account.
- Offshore profits are tax free!
- You can choose any currency to set up an account in.
- All main credit cards types are accepted.
- Transaction procedures are confidential.
- You can set up a bank account with high transaction volumes.
- Payment options can be without difficulty integrated with your current website.
- Account is possible to be managed on the web in real time.
- Geographic position of the business does not matter.
- You can register a higher risk business.
- No upfront payments are obligatory except for the deposits on the exceptionally high-risk businesses.
The 2 main ways to set up an offshore credit card processing services for your business are the following:
- Register an account using the assistance of an offshore payment processing clearing house.
- Set up a direct offshore merchant account of your own.
For the start-ups, the best option is a clearing house processor. Hiring a 3rd party service allows you to accept the customers’ payments using their commercial status (however, a unique descriptor will be shown in your customers’ statements and they will be able to identify yours transactions). In such a way your business can build up a sales momentum before a breakthrough.
Even in case the company has the processing history in the country it operates, it’s faster and easier to register the direct merchant ID for you, which can be sponsored by the processor and set up in the bank it works with.
This helps you to avoid the burdensome paperwork requirements, which will be otherwise demanded on your part during the account opening. After six months or a year the business may consider shifting to a direct bank processing via a bank in offshore zone, but on condition it has the appropriate sales transaction volume and number.
A great number of e-commerces will be eligible for their own bank-direct business account with the billing as well as merchant ID. Mind that the service is quite costly cause the bank tries to insure risks for the case you default on your obligations.
The prevalent number of domestic merchant accounts have a 2-3% discount rate, but it’s higher for the offshore merchant accounts, starting from four up to twelve percent depending on the average ticket size. Higher risk businesses will be offered even higher rates.
Any online entrepreneur will once decide to consider going offshore seriously, as it allows enjoying all the benefits of such an initiative. In case you need a trustworthy service, which can show you the way to capitalize on the offshore opportunity, just call our experts and they will help you.