Offshore does not mean permissiveness. Strict financial discipline and responsibility, typical of the common law countries and practised in offshore jurisdictions, should not come as a surprise to you. Otherwise, you may face fines and penalties, of which there are three distinctive types:
- Late payment penalties, may be incurred through untimely payment of government fees or income tax;
- Late filing penalties, for untimely filing of the company’s accounts, be it income tax returns, the VAT return, or certain corporate information to be filed with the authorities;
- Fines for not submitting the requisite documents, if they are required, for instance, for incorporation purposes.
The amount of fines may vary considerably: from $30 to $10,000, or from 10% to 50% of the amount due.
The payment of penalties is ensured in a relatively simple manner: the company may be struck off the register for non-payment of due amounts. After that, the company is not allowed to conduct any form of business activity.