International Business Company or International Business Corporation is an offshore company that is mostly exempt from all types of taxes, and mainly used for investment and is a vehicle for international trade. IBC’s are 100% tax-exempt in the jurisdictions of incorporation. It provides several features and benefits that make it ideally suited for some uses.
International Business Corporations has the same power as a local company and can engage in different businesses and investment activities worldwide but benefitting from tax exemption. The company does not have the restrictions or excessive regulations as domestic companies, however with one exception that an IBC cannot exercise business activity in the jurisdiction of its incorporation.
International Business Companies can be incorporated can be registered in the following offshore jurisdictions: Dominica, Belize, Seychelles, Panama, Anguilla, British Virgin Islands, Hong Kong, Mauritius, and many other countries in the world.
Functions of IBC’s mirror those of offshore companies. Offshore companies are not necessarily IBC entities, but all IBC companies are primarily offshore companies. The features include –
- Conducting international trade
- Operating as special purpose entities
- Asset protection and security
- Consolidation of intellectual property licensing and franchising entities
- Offshore banking for anonymity and limitless transactions
- Bypassing sanctions, embargoes, and other limitations between countries to do business
There are several steps that need to be taken to start an IBC in any country. But why you should set up an IBC? Let us take a look at these advantages-
1.Holding Assets Confidentially
Protecting what you own is essential. With the ever-increasing chances of litigation being brought against you and your company, don’t take any chances, use an IBC to shield your assets. IBC’s can protect you from product liability, malpractice suits, if you are in the medical field, creditors and even divorce proceedings.
2.Subsidized Tax Rates
The IBC’s are often attracted by zero tax, but some get nominal taxation dependent on the profits. The statistics vary from 0.25% to 3%. This is a substantial dent in the dues to the state funds, but is with good reason, as the state can deny information of the presence and operations of the IBC.
3.Exemption from Tariffs
The use of stamp duty and regional corporate taxations measures does not extend to these businesses. They are free to exist as ghosts as long as they keep their transactions out of the domestic realm. They also evade the general business expenses being held on a book, but more suggestively, keep their profits concealed.
4.Freedom of Operation
The capability to operate as a wild card in the commercial world is an excellent asset for the IBCs to possess. This permits them to enter into any business without restrictions, from production to trade and even business. This ensures the organization can have its members or benefactors anywhere in the world with permission only to have an office in the vicinity.
5.High-End Monetary Services
The IBCs can be used to own or function the usually precise amounts of money on rarities and antiques. Yachts and other high-value exceptional items can be traded and owned by such businesses, especially as the local establishments may limit the value of assets, insurance brackets, and transactions. This makes offshore businesses ideal for wealthy folks and enterprises to secure assets, items, and fortunes of a rarity.
Now that you know the advantages of incorporating an IBC in popular offshore countries, let us find out the dos and don’ts of an IBC.
- Carry on business anywhere except for the jurisdiction of its incorporation
- Keep as many bank accounts as it needs anywhere, in any currency
- In some jurisdictions, may subject to bearer shares
- Have meetings of its directors and members anywhere in the world
However, an IBC cannot,
- Carry out commercial transactions with individuals residing in the jurisdictions of its incorporation
- Provide insurance, banking, or reinsurance services
Conclusion
Now that we have covered most of the things that you must know of setting up an IBC, where is the best place to incorporate an IBC? Well, to summarise, that’s best answered by determining what your company’s particular needs are, your business activity, your supplier and client’s location, your tax residency status and more.
Should you decide to set up an offshore company, we at Business Setup Worldwide can help you with it. We also provide these services like offshore banking, accounting and bookkeeping services, IP and much more. Contact us today to know more about our offshore services.
