5 reasons your Offshore Company needs an LEI Number

Legal Entity Identifiers for Offshore Companies

The LEI is rapidly becoming the primary global business identifier as over 1.6 million entities now rely on the ISO standard for their regulatory and global business needs.

Originally driven by regulation, the LEI is now beginning to be adopted by companies for more practical reasons as the broader benefits are becoming more apparent. The LEI is no longer viewed as a regulatory reporting burden it is seen as an asset. It provides security for international transactions, shortcuts KYC processes and boosts transparency throughout the global financial system. The LEI is also a valuable tool for validating your companies identity and gives you an instant credibility boost.

The Legal Entity Identifier is a G20 endorsed globally verifiable unique identity code that consists of 20 numbers and digits. The LEI which is unique to each entity is located on the GLEIF database and contains basic entity information such as name, address and entity type (e.g Limited company, Fund, Trust etc).

The offshore world has seen a large increase in the number of LEIs in recent months. For example there are already 26,000 LEIs in the Cayman Islands accounting for 1.63% of all LEIs globally. The British Virgin Islands has 22,000 and lagging behind is Panama with 4,800 LEIs. Other countries with a large number of LEIs are the Seychelles, Marshall Islands, Cyprus, Guernsey, the Bahamas and the Isle of Man.

While there is no particular law mandating these offshore destinations must have an LEI, individuals with companies registered here apply for LEIs in order to conduct business in the EU, UK or USA. To see a list of global regulations which request an LEI by country please click here.

Here are our top 5 reasons you should obtain a Legal Entity Identifier for your offshore company:

1. Trust in your Identity

Knowing who is who is very important in todays world. In a global marketplace you need to be sure who you are dealing with. Your overseas customers, or potential investors will want to know that you are who you say you are. Having a Legal Entity Identifier is a guaranteed way of proving you are a registered entity and you stand behind your company.

Before obtaining an LEI, an entity is verified using the local companies registry to confirm its status as an active company. The LEI cannot be issued until all the data has been corroborated. This is why the LEI has become such a trusted identifier for many regulators and lawmakers.

2. Global Validation

Previously, when conducting company checks we normally refer to the national companies registry search tools. For example, in the BVI you can conduct a company search at the Registry of Corporate Affairs or at the Cayman Islands General Registry. Having a listing on these websites ensures you are a registered company, however it can be hard to find the right website, search tool or database.

Now however, the LEI provides the same tool but on a single, standardized global scale. The LEI is standardized, meaning it provides the same company data regardless of the jurisdiction or industry. This improves workflow, KYC processes and consolidates hundreds of national registries into one useful search tool.

National company registries can provide a Certificate of Incorporation or Incumbency which include a company registration ID. These are often used by companies to prove their existence, however they are only valid on a national level. The LEI certificate is a more convenient, fit for purpose document.

By obtaining an LEI number you are eligible to get an LEI Certificate. The LEI Certificate replaces traditional certificates as it is internationally valid. To purchase your own LEI Certificate to provide your regulators, customers or potential investors please click here.

3. Legitimacy

Since the Panama Papers were leaked in 2016, there has been a stigma attached with companies operating out of these offshore jurisdictions. The LEI is a convenient, cost-effective and trustworthy bulwark against this school of thought.

If you are registered offshore, and do business internationally under another name, the LEI offers multiple “doing business as” naming options and can be flexible to meet your particular needs.

You can also list parent company information to create an ownership map of your organizational structure, which includes direct parents, ultimate parents, branches etc.

Having an LEI Certificate is a very simple and efficient way of showing the world that you are legitimate, open for business and are a transparent entity with international credibility.

Organizational Structure

4. Compliance

“No LEI, no trade” as the maxim goes. Having an LEI is heavily regulated in many parts of the world. If you do business internationally, especially in the EU, US or UK you will most likely be required to have an LEI for reporting purposes. To find out if you need an LEI, or to find out more about LEI regulations you can read our post here; Who needs an LEI

5. Ease of Access

The barrier for entry to obtaining an LEI is very low. Applying for an LEI is a very simple process that only takes up to 10 minutes. 97% of applications at LEI Worldwide are accepted.

Any entity which can be considered a legal entity may obtain one. This includes Limited Companies, Funds, Trusts, Charities, Associations, Government Bodies and Banks and in every country in the World.

To apply for you own unique LEI please click here; Register LEI
If you already have an LEI order your LEI Certificate here; LEI Certificate

Contact our team of experts to discuss your individual needs and together we can discover the LEI requirements your offshore business needs.

Thinking of registering an offshore company?

Check out this useful guide by 'Euro Company Formations' on how to not only register an company offshore, but also how and where to do it to best suit your needs.
Top 5 Offshore Countries to Incorporate a Business

To apply for your own LEI or on behalf of a legal entity, please select the option from the buttons below.