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Why go international
Definition of international business company (IBC) Print E-mail
In simple terms, an international business (offshore) company is a normal limited liability company which is used as a tool, legally, by corporations and individuals through out the world to direct profits out of high tax countries into offshore jurisdictions or international financial centres thus taking advantage of low or zero tax and double tax treaties. The beneficial ownership and business activities of the international (offshore) enterprise in general lie outside the country of its registration
 
Main Incentives to go international Print E-mail

More specifically the owner of an international enterprise is expected to enjoy the following advantages through the operation of his company:

  • Significant tax savings (low or zero taxation)
  • A greater degree of privacy and confidentiality
  • Reduced operating costs
  • Protection of personal wealth
  • Less bureaucracy
 
Possible international business activities Print E-mail

There are a number of business activities which are best suited to be operated through an international entity, thus taking advantage of the opportunities offered. Examples of such activities are listed below (the list is by no means exhaustive):

  • International trading (an international company can be used as intermediary to re-invoice exports and imports) - see example
  • International services companies (re-invoice services through an international company) - see example
  • International construction and / engineering companies
  • International transport/distribution companies
  • Royalty companies
  • Real estate companies
  • Shipping and ship management companies
  • Commission agents
  • E-business
  • Holding companies (receiving dividends from foreign subsidiaries
 
Important criteria for choosing a jurisdiction Print E-mail

The choice of a suitable jurisdiction is an important decision and requires careful considerations. The most important aspects to be examined may be outlined as follows:

  • Political and economic stability of the jurisdiction
  • The availability of a modern and flexible legislative framework
  • Simple incorporation and filing requirements
  • The availability of Double Taxation Treaties - this is very important in order to minimize withholding taxes on the payment of dividends and royalties from contracting states
  • The availability of good calibre professional advisers
  • A good banking system
  • Good telecommunications
  • Reputation (some "tax havens" are viewed with suspicion).
Important Note: Professional advice should always be sought before acquiring an offshore entity so that you are aware of any restrictions and reporting requirements.