IBC FAQ 1 of 5
What Is An International Business Company? 
An "IBC" is a separate legal entity similar to a domestic incorporated
company, created under the authority of a statute. The primary difference
is the allowance in certain "Havens" of a tax-exempt status, in
order to attract new business to their otherwise remote location. A Company
is a separate legal "person" for tax reporting purposes.
Why Should I Buy An IBC?
An IBC is a globally recognized legal entity or form of doing business, which
is treated as a separate "person" allowing the Company to be responsible
for it’s own risks and rewards. The limiting of risk is a key factor
with most experienced business people, and the unlimited life-span of a company
makes it a great vehicle for passing your successful enterprise on to your
family, and is mostly used for holding private investment capital securely
offshore in a tax-free country.
What Are the Main Advantages of an IBC?
There are many advantages to moving assets offshore, some of these are:
- Reduction of Tax Liability - Through International
tax planning - a foreign jurisdiction can offer unparalleled opportunities
for tax free revenue, plus repatriate money tax-free.
- Investment Holdings - Higher returns and no tax burden allows
funds to double offshore every 2-3 years instead of every 15-20 years
onshore.
- Asset Protection - To secure against future claims
such as judgment, divorce proceedings, bankruptcy, creditors and litigation.
- Confidentiality - From claimants, ex-spouse, competitors,
and other parties from whom you wish to keep your business interests private; and
- Estate Planning - Family and Protective Trusts for
accumulation of investment income and long-term benefits for beneficiaries
on a favourable tax basis (without inheritance, income, or capital gains taxes);
What Can an IBC Do?
Your IBC can act in many ways, for example it can:
- Open a bank account, make deposits and transact globally.
- Manage offshore investments such as term deposits, bonds, stocks, mutual funds, CDs, etc.
- Provide consulting, management, or professional services (and hire you).
- Own a Corporate credit card, and allow you to cover your legitimate expenses using it.
What Countries Should I Consider For An IBC?
The answer depends on what your objectives are: 1) The most common objective
is a passive income investment IBC to accrueinvestment income, un-taxed
or deferred, as a nest-egg. Then a country like Belize
IBC or BVI with strict privacy laws and a track-record of not giving in
to high-tax nation pressures may be best.
2) Do you want to operate
an active income business that sells a product or service?
Then perhaps a country that has a tax-treaty with Canada would be best.
Canadian companies should examine the Barbados IBC. Consider that you will need to meet all the CCRA rules and get
their blessings, which they have become tough to fulfill, like having a
minimum of 5 employees in Barbados without using rented Nominee services.
There are over 75 countries that are trying to attract foreign investment
by offering favourable rules to new companies. English speaking people
should insist that English is the main language, that they follow British
Common Law, and that they are politically stable and Independent from
Canada. Privacy may be a top priority, if so recent pressures by the OECD
and G-10 Nations have resulted in a string of British Protectorates and American
dependencies lifting their privacy. Countries to recently sell-out on privacy
include many top names: BVI, Caymans, Bahamas, Jersey, Isle of Man, and many
others. Your choice should be within 2-3 hours of your time zone (so
you don’t have to set your
alarm clock to call the Bank), which narrows the field down to about a half-dozen.
For a free ranking of the comparable merits of IBC laws in different countries,
click here for the "Swiss Report".
Follow the link below to the next part of the Offshore IBC FAQ 2 for
the continuation....
