What makes an IBC different from other corporations?

An IBC (International Business Corporation) is a corporation and must be managed as such. It has Directors and Shareholders (owners), and it does business as any other corporation.

However, it has one important feature that makes it different:

It is granted freedom from financial reporting by the country it is established in, provided

  1. it does not conduct any business in this country itself!

  2. all shareholders are residing outside the country as well.

The only reporting obligations an IBC has is the update of the names and addresses of the Directors and the address of its legal office or agent's office.

The consequence of this is that it has no liability for income tax on its profits - it does not even have to report to the government what kind of income it makes!

Most "offshore" countries accept these rules for International Business Corporations registered under their jurisdiction, including Belize, Bahamas, Grenada - and many others. It is quite common too that they even accept that the IBC has its registered office in a different country!

Your government does for sure not like this - yet it is no business of your government how other governments will choose to tax or not tax business profits of corporations under their sovereign jurisdiction!

(For more details about "offshore" countries, please check also "Why "Offshore?" - the link opens in a separate window)

(You can refresh your geography memory by opening a map over the Caribbean in a separate window)

As you can see now, you need to work with two "offshore" countries: one to host your Trust, and another one to host your IBC. With such a business set-up, there simply is no tax liability whatsoever! You are not breaking any laws by taking advantage of this. Whatever business activities you involve yourself in offshore on behalf of "someone else" (like your Trust or your IBC - none of which are legally owned by you) is not giving you any liability in regards to your own government, unless it restricts your freedom of communication with people in other countries!

The conclusion is that it is politically impossible for any western government to prohibit this, without attacking the very foundation of our western "free world".

Now, we are getting close to the really exciting stuff:

"Using your IBC - to your maximum benefit"