An offshore corporation - like a domestic corporation - has a distinct legal personality. It can sue and be sued in its own name, and the shareholders' personal assets are separate and distinct from the assets of the company. It is, in effect, an artificial person that protects the principals behind the company through the concept of limited liability.

The corporation is often used to hold bank accounts and credit cards, purchase goods and services, enter into contracts, hold property, trade securities, and perform any other financial transaction in its own name rather than through the name of its owners. Thus, the principle benefit of an offshore corporation is similar to that of an onshore corporation, that being a layer of legal separation between a company, the people behind it and the business it conducts.

When used in conjunction with an offshore trust, corporations add a layer of confidentiality, control and versatility to an overall financial strategy. The offshore corporation acts as a conduit through which trust assets may be invested and/or distributed. Remember, the trust owns all the shares in the company. Trust assets may flow to the bank, brokerage and insurance accounts held by the company, and the client may “manage” those assets by virtue of his position as Corporate Manager. The company also serves to add another layer of confidentiality to the structure.