Depending on the activities of the company there are various structuring methods to mitigate tax.
For example, trading profits received by a company are taxed at the corporate income tax rate rather than the personal rate applicable to its shareholders. A resident of a high tax country may set up a company in a low tax jurisdiction and accrue business profits into the name of that company. Various anti-avoidance legislation in the shareholder’s country of residence may seek to ‘attack’ the effectiveness of such arrangements but these can be addressed with proper structuring.
If the company makes a distribution of profits, usually in the form of dividends, such distributions are generally taxable in the hands of the recipient. Thus, a great advantage is achieved by letting the profits roll up within the low tax company so that the potential tax can be deferred, and by reinvesting those profits, so the benefit is cumulative and substantive.
When there is a possibility of delaying a distribution of profits until the shareholder moves to a tax friendly jurisdiction with a lower, even zero tax rate, then any potential tax liability can be reduced significantly or avoided completely.