Incorporating a company domestically would seem to make the most logical sense. If the business is based in one country, why would anyone wish to take the steps to incorporate it elsewhere? There are quite a number of benefits to incorporating overseas. This is why so many different companies have chosen to do so. In fact, a decent amount of well known companies and entrepreneurs have made the decision to incorporate overseas.
What is it that motivates them to do so?
Likely, the most common reason why a business will incorporate offshore is to save money on taxes. High taxes have a tendency to drive companies to locations where the tax rates are low. Certain regions may have extremely low corporate or business taxes. The option to pay no local taxes is definitely going to be appealing to businesses wishes to cut back on expenses and use the money for other purposes.
The cost of doing business can be a lot cheaper. Certain regions allow for a business the opportunity to work in an area where the fees associated with operating are far lower. Businesses have to keep money in reserves to deal with the ebbs and flows of the market. Cash flow might not always be very high and, because of this, there is a need to have more money in reserves. Lower operating costs make this much more possible.
Anonymity can also be gained by incorporating offshore. Not everyone wishes their business activity to be public record. Yet, in certain countries, the ability to operate a business anonymously is essentially impossible. Local laws create a full disclosure scenario for those wishing to run or be involved with a business. Overseas rules may be quite different and maintaining anonymity is possible.
Fear of lawsuits is a cloud that hangs over the heads of many businesses. Incorporating overseas can very well protect a business' assets in case of litigation. While lawsuit threats and costs cannot be completely eliminated, some of the damage caused by the lawsuit may be stemmed.
Clearly, there are enough benefits associated with incorporating overseas that make it a worthwhile strategy to pursue.