Offshore company

a corporation or (sometimes) other type of legal entity which is incorporated under the laws of a different country than in the jurisdiction
of incorporation, and/or which statutory seat may not or does not deploy economic activities, and of which the actual beneficiary
resides (or has his/her seat) in another country than where the offshore company has its legal seat.

To the Offshore Company definition, applies five (non-cumulative) limiting conditions: (1) The government in the country of
incorporation does not levy an indirect tax on the OAC (however, the OSC must pay an annual fee to the government). (2) Separate
laws and regulations apply. (3) The OSC doesnt have its own physical office (address), personnel, means of communication etc. This
means that the OAC must have a representative (registered agent) and office address (registered office) in the county of the
incorporation. (4) The OSC must be managed and governed by (an employee of) a local trust or law office. (5) There is an instance
of elements that benefit anonymity such as bearer shares and no or limited filing obligations.

They are broadly not subject to taxation in their home jurisdiction.

The corporate regime will be designed to promote business flexibility.
Regulation of corporate activities will normally be lighter than in a developed country

Offshore companies are used for a variety of commercial and private purposes, some legitimate and economically beneficial, whilst
others may be harmful or even criminal. Allegations are frequently made in the press about offshore companies being used for money
laundering, tax evasion, fraud, and other forms of white collar crime. Offshore companies are also used in a wide variety of commercial
transactions from generic holding companies, to joint ventures and listing vehicles. Offshore companies are also used widely in
connection with private wealth for tax mitigation and privacy.

What is a 'Transfer Price'

A transfer price is the price at which divisions of a company transact with each other, such as the trade of supplies or labor between
departments. Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately
run entities. A transfer price can also be known as a transfer cost.

BREAKING DOWN 'Transfer Price'

In managerial accounting, when different divisions of a multi-entity company are in charge of their own profits, they are also
responsible for their own return on invested capital (ROIC). Therefore, when divisions are required to transact with each other, a
transfer price is used to determine costs. Transfer prices tend not to differ much from the price in the market because one of the
entities in such a transaction loses out; they start either buying for more than the prevailing market price or selling below the market
price, and this affects their performance.

Regulations on transfer pricing ensure the fairness and accuracy of transfer pricing among related entities. Regulations enforce an
arms-length rule that states that companies must establish pricing based on similar transactions done between parties not of the
same related company but at arms length.

Transfer prices are often used when companies sell goods within the company but to parts of the company in other international
jurisdictions. This type of transfer pricing is common. Approximately 60% of the goods and services sold internationally are done
within companies as opposed to between unrelated companies.