Many people who like international business operations are at some point faced with the question about IBC. In this post, we explore IBC: Definitions and advantages so that you can make the right decision as to whether they are indeed right for you.
IBCs and their roles
What is IBC? IBC are initials standing for International Business Company/corporation. An IBC is a company that is incorporated in a country or region that is tax neutral. This means that the company does not pay any taxes or if it does, the amount is very little. IBCs are limited in their operations and cannot do business in the country of registration to enjoy tax relief.
IBCs observe high confidentiality and will in many cases maintain the name of shareholders as anonymous. The main functions of IBCs are close to those of an offshore limited liability company. In particular, the functions of IBCs include the following;
(i) International trading in countries other than where they are registered
(ii) Establishing baking identities to keep shareholders anonymous
(iii) Running business special entities
(iv) Protecting assets of owners that are held under the company
(v) Bypassing Sanctions and embargoes set by countries to carry business
(vi) Bringing together intellectual property licensing
Advantages of IBCs
1) Lower tax rates: IBCs usually attract 0% tax rates or very minimal taxation. In many cases when they are taxed, the tax rate falls within the range of 3% and 0.25%. This can mean a lot for a business especially if they operate in countries that have very Heavy taxation regimes.
2) IBCs are exempted from levies: Unlike other companies, IBCs do not get stamp duty and are, therefore, exempted from the local taxation system. Consequently, the companies exist in reality but are hidden from taxation. The only thing they must do is ensuring that all the deals are kept away from the local arena.
3) Higher operational freedom: Because they exist as ghosts, they are able to enter into business deals with no limitations. With only a local office, the company can have and work with members all over the world and make huge returns.
4) Rapid formation process: IBCs usually take a very short time to conceive and operationalize. The only requirement is a lot of money, compliance letter, and a single return filing. With your documents as proof of registration and operational license, the offshore company is ready to start. The only step that may take some moments is the Know Your Customer (KYC) that requires verification of those who are involved.
5) Full guarantee of deductions as well as benefits
Though these are dependent on the country of choice, IBCs are sure of many years of waivers, exemptions, and huge benefits. This helps to keep the funds and all associated assets safe from depreciation, taxation by government agencies, as well as accountability through requisite documentation. The guarantee is also extended to exemption from controls so that transferring assets or other high-value items is easy and direct.
6) Flexibility with currency selection
Unlike the common standards in company operations that mainly use pounds, dollars, or euros, IBCs have greater flexibility and can operate in any currency of choice. Accordingly, you can retain the integrity of the wealth under consideration with little or no fear that it will lose value or be affected by unpredictable currency fluctuations of the main currencies.
IBCs are considered the hallmark of independent-minded people who believe in highest standards of operations in their businesses. They are formed by people who want extra efficiency, professionalism, and total confidentiality. Well, you can also open and run an IBC depending on your niche and operational objectives and enjoy the outlined benefits.