IBC – International Business Company
Picture this: You are in for an exciting corporate journey, have already registered the company, and are about to throttle operations. Everything was smooth sailing for you until you hit a roadblock – a revised tax slab, which dented your profit margin terribly. All your hard work is gone in the government’s pocket. That’s a problem most entrepreneurs experience in their operating jurisdiction. In India, for example, the corporate rate tax ranges from 20-40%, which is frustratedly high. According to the tax foundation, the global average CIT, measured across 180 jurisdictions, is around 24%.
Fortunately, there is a business model that can help subvert this stringent arrangement. Wondering what it would be?
We are talking about an International business company (IBC). Let’s understand the role of IBC in the corporate landscape, why it has been making waves, and how you can sign up for this.
What is an IBC?
IBC is a specific type of offshore company that businesses choose for a number of reasons, but not limited to the following:
- Asset protection or diversification
- Tax incentive
- IPR protection
- Minimal compliance
- Zero auditing requirement
- Minimal financial reporting
- No public disclosure
Compared to onshore companies, the International Business Company does not invite stringent regulatory oversight, be it a matter of taxes, audit, or finances. The registered IBCs in some jurisdictions enjoy 100% profit repatriation, which allows businesses to shift the entire profit to their home country without inviting any deduction.
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Popular Juridictions to Register an IBC
Several jurisdictions offer IBC but only a few stand out, including
- British Virgin Islands (BVI)
- Belize
- Seychelles
- Panama
- Bahamas
- Cayman Islands
- Saint Kitts and Nevis
- Anguilla
- Saint Vincent and the Grenadines
- Mauritius
All these jurisdictions foster a robust environment wherein businesses from diverse sectors thrive seamlessly while enjoying all the perks.
Registering an IBC in any jurisdiction worldwide is not a hassle anymore thanks to the simplified registration process which is virtually paperless. More on this later!
Who Should Choose IBC in the Status Quo?
Although IBC is relatively popular among all industries, the following businesses get the most out of it:
1. E-commerce and Online Businesses
- Dropshipping
- Affiliate marketing
- Digital product sales (e-books, courses, software)
- Subscription-based services
2. Consulting and Professional Services
- IT consulting and software development
- Business Consulting
- Legal and financial advisory services
- Marketing and SEO services
3. International Trading and Import/Export
- Wholesale and distribution
- Trading companies handling global imports and exports
- Raw material sourcing
4. Investment and Wealth Management
- Holding companies for investments in stocks, bonds, or real estate
- Asset protection and wealth preservation firms
- Private equity and venture capital firms
5. Intellectual Property (IP) Holding
- Companies that own trademarks, patents, and copyrights
- Licensing and royalty collection businesses
6. Digital and Technology-Based Businesses
- App and software development companies
- SaaS (Software as a Service) providers
- Web hosting and cloud computing services
7. Cryptocurrency and Forex Trading
- Crypto investment firms
- Forex trading companies
- Blockchain startups
8. Shipping and Maritime Businesses
- Ship leasing and chartering companies
- Yacht and aircraft ownership and management
9. Remote and Freelance Businesses
- Freelance platforms and agencies
- Virtual assistant services
- Remote digital marketing agencies
10. Holding and Parent Companies
- Companies managing multiple subsidiaries
- Family-owned wealth management firms
Understanding Steps to Register IBC in a Tax-haven Jurisdiction
Based on the industry, your business goals, and the perks you seek, choose the right jurisdiction for offshore endevours. Once done, head to the regulatory authority vested with the rights to formalize an IBC. Typically, the following steps come into play when going for registration
- Arrange the mandatory paperwork (refer to the next section for more details).
- Head to the concerned authority to file a prescribed application. Hire an agent or certified agencies like Adviso for this purpose. This will ease the blow for you.
- Submit the paperwork alongside the application as recommended by the authority
- The authority shall vet the application as well as annexures for accuracy and compliance, and upon successful assessment, the applicant shall receive the certificate.
Mandatory Documents to Register an IBC
Most jurisdictions seek minimal paperwork to reinforce the applicant’s identity and affirm the firm’s legitimacy. Some common documents for registration include:
- Application form (vary jurisdiction-wise)
- Detailed Business plan boasting financial viability, projected profit, and business feasibility.
- Founding documents, such as MoA and AoA (refer to an agent to devise these documents within the purview of existing legislation)
- Shareholder’s passport and visa copies
- Nominee information, if any
Conclusion
As the corporate landscape continues to evolve, governments in some jurisdictions increasingly make life tough for businesses no matter the industry or operational footprint. Choosing IBC as a business model is a great way of skipping such a discouraging arrangement. Opting for IBC is not all about skimming profits and averting taxes; it is a strategic move to solidify a business presence.
So, if you have decided to take a plunge, it is better to get things right and aligned from the ground up. With Adviso’s expertise, you can launch your business in any country seamlessly. Say goodbye to tedious paperwork and strict compliances as Adviso is here to take charge on your behalf.
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