MANILA, Nashville Filipino Restaurant — A shelf company is a legal entity that has been incorporated but not used for any commercial activities. Essentially, it has been “left on the shelf” to age. They are particularly advantageous for investors who wish to establish their presence in the country in the shortest amount of time possible.
When buying a shelf company it is important to understand the local compliance requirements, as well as to perform due diligence in order to determine if the company is indeed not involved in any business transactions. The final step is to draw up the ownership transfer documents.
Step 1: Choose the legal structure
In choosing a shelf company, select a type of company that will suit the business needs. The Private limited company is commonly used as the shareholders are only liable to the extent of their invested capital.
In some jurisdictions, the general company formation process is a straightforward one and the main advantage of the shelf company remains in the fact that it has no business history.
For example, Singapore and Hong Kong are two jurisdictions where a company is open for a very short amount of time and you can always choose the services offered by a team of consultants who can help you open a company in Singapore.
Some countries offer both an attractive business environment and a high quality of life, making them equally attractive to investors who wish to relocate. The Netherlands is a good example, with options for buying ready-made companies or easily start new businesses. It also comes with good connectivity with the EU market and a high quality of life.
Investors who are planning on starting a business in the country can obtain a residence permit for investments in some cases and they can contact a reliable immigration lawyer in the Netherlands for more information.
When buying a shelf company it is important to select a type of company that will suit the business needs. Released
Step 2: Perform a verification
Shelf company services are found in many international business centers due to the location’s attractiveness to foreign investors.
Nevertheless, when buying a shelf company in Hong Kong or in another Asian business location, it is important to perform a background check for that company. The local company registration regulations will require the company to submit a set of documents upon registration, which then can be publicly accessed.
This means that a simple verification can be made in order to cross-check the incorporation date, type and name of the company and others.
This verification is recommended regardless of the location in which the foreign investor wishes to buy the ready-made company. For example, it can also apply to Swiss shelf companies.
Step 3: Finalize the company ownership documents
The final step in buying a shelf company is completing the ownership documents. Upon purchase, the new owners will need to sign the ownership transfer documents and the amendments to the company documents, as needed. The new directors can then proceed to change the company name if they so desire.
Buying a shelf company is a common practice in many jurisdictions around the world, especially in offshore financial centers like Belize and others. The fast transfer of ownership, the credibility given by the age of the company and the fact that the new owners can start trading immediately are all reasons why the shelf company is used by investors.