The international business company is surely one of the most dynamic corporate tools invented in our time. Call it offshore company, exempt company or international company, international business companies no matter where incorporated all basically serve the same purpose and produce myriads of benefits.
Reaching new borders, maximizing sales and increasing a competitive edge are three core components of an IBC. Whenever you are thinking of experimenting with new markets and creating a more conspicuous presence on the international scene, an international business company will help you get there.
Whether seen as one of the inventions of the globalised economy, expanded capital markets or liberalized trade, international business companies are indeed the ultimate tool for mastering business, tax savings and to begin treading up the road to success.
Different jurisdictions have different laws in place for international business companies and this has very much been the case over the past few months due to the demands that the OECD and Tax Justice Network have been hammering out over the tax havens and low tax jurisdictions.
Recently, Hong Kong and Singapore were placed in the spotlight for the attractive and competitive business framework that they established to facilitate trade, business, boost their economies and improve overall development as first class business centers; and despite not particularly liking the truth, major financial centers like Oregon, Wyoming and Delaware are big time scorers in development fostered through offshore financial services.
In these states the beloved limited liability company or LLC, cousin to the international business company, very much fulfills the same end. Limited liability companies that are effectively structured are big on tax savings and can be used for trading all over the world. What’s better is that as LLCs are the master mind creation of the U.S. and are credible vehicles to use for trade anywhere. Many entrepreneurs may tend to incorporate in Delaware over a tax haven like BVI because of the possibility of owning a company that originates in the U.S. and is accepted with very little brow raising on the other end.
Non-residency is the main component that makes an IBC exempt from taxes. Tax exemptions given to international business company stems from the explanation that business is not done in the country of incorporation, property owned by the IBC is located abroad and as a result the tax liabilities are nil. International business companies become liable to taxation in the country of incorporation when they do business in the jurisdiction and offer services to the local public, which make IBCs considered as local companies. However, in reference to the latter, an international business company that simply opens a bank account or has an office from where it does its business with non-residents is not considered as engaging in business locally.
International business companies must respect the laws under which they are governed by not engaging in illegal activities or abuse their capability to trade on an international scale while reducing taxes. IBCs must also be careful with the names they choose for doing business as this must not be the same as another international business company registered in the same jurisdiction and must not be misleading to the public by being very similar to the name of another company. These are actions that are punishable by law and could lead to the name being struck off by the Registrar of the said jurisdiction. In this situation the company is forced to choose a different and unique business name.
Incorporating an IBC is straightforward, there is no requirement be physically present in the jurisdiction. Incorporating an international business company can be done online, documents can be faxed or scanned and emailed to the service provider and contact can be made by just picking up the phone and dialing.
Most jurisdictions keep the data on the beneficial owners away from the public and usually only the articles and registration number are kept at the registry. The formation documents are kept at the agent’s office and if required accounts and reports are to be filed at given points in time to the registry or the jurisdiction’s regulatory commission.
The companies offering incorporation services are registered agents by the governments of the jurisdiction where they operate and are most often international business or offshore companies themselves. They generally consist of teams of lawyers, accountants and secretarial administrative staff.
Incorporation fees vary from one jurisdiction to another, some being more affordable and competitively priced than others. Given the competitive nature of jurisdictions international business companies are incorporated within 24 to 48 hours. Very few jurisdictions may take weeks to incorporate companies and that of course could be an indicator of the dedication given to incorporation services by the jurisdiction itself. Several jurisdictions have established online systems for name checking and registration, incorporation is virtually done directly between the customer and the registry. This though is often facilitated through a registered agent as all international business companies must have a local authorized agent. In Anguilla, names can be checked in different languages and the English equivalents are searched and verified through the online system’s internally built translator.
Incorporating an IBC does not consist of lax procedures and lack of regulations as is often made to be believed by people who oppose offshore business. IBC incorporation employs the latest and safest in technology, professionalism and practical knowledge on the management of IBCs and the ways in which they can be used beneficially for business expansion.
International banks and trusts can be regarded as international business companies even though they are not actively involved in trade as such. Really, they are vehicles that are used to serve clients from all different parts of the world and receive the same tax treatment as international business companies. The only difference is that an international bank must be granted with an international banking license by the incorporating jurisdiction since special licenses are issued for banking, insurance and trust business.
International business companies are indeed a component of a healthy economy. They enable corporations to access international markets much more competitively, boost the capacity of banks to make secured loans to developing economies, create thousands of jobs and are the practical solution for business success.
(c) Caribbean Land and Property July 2009