International Business Companies - IBCs

St. Lucia, has always been a jurisdiction ripe for expansion and in keeping with this obvious trend, the country, in 1999 enacted a modern piece of offshore financial legislation, the International Business Companies Act. This Act is fashioned in such a way that it provides utmost flexibility and advantages for the client, while at the same time preserving the integrity of the Island's industry.The advantages offered by the St. Lucian International Business Companies Act are hereinafter set out:

The Advantages are:

A Company must act through a Registered Agent who is licensed and regulated to ensure a professional and efficient service.

The IBC Act provides for confidentiality of shareholders, directors and officers. Only the Memorandum and Articles of Association, and information on the Registered Agent and Office are public records. 

Flexibility is attained since an IBC may elect to be exempted from income tax or to be liable to income tax on it's chargeable income at the rate of 1%. IBC's are also free from exchange rate control and stamp duty, and special income tax concessions are in place for specialist staff who are relocated to St. Lucia. 

There is no requirement that meetings of directors and shareholders be held in St. Lucia, and members may vote by proxy. 

The legislation allows for the continuation in St. Lucia of an IBC incorporated in another jurisdiction.

Migration of any IBC, incorporated in St. Lucia, to any other jurisdiction is allowed. 

A much-needed neutral platform is provided to conduct international trade and finance.

The Officers and Directors of an IBC need not be shareholders.

An IBC can be used for numerous purposes such as:

* General commercial trading 
* Financial management 
* Holding investment securities offshore 
* Ship ownership or real estate ownership 
* Share ownership in other companies 
* Leasing of assets

As long as its business is not being carried out with persons resident in St. Lucia.

International Business Companies - IBC Basics

BASIC IBC INFORMATION FOR TAX EXEMPT OR LOW TAX (1%) COMPANY SPECIFICATIONS:

  • Type of Company
  • Minimum No.of Directors
  • Bearer Shares allowed
  • Public Disclosure of Directors/Shareholders
  • Local Directors required
  • Standard Authorised Capital
  • Audited Accounts Required
  • Time to Incorporate
  • Other Requirements
  • International Business Company (IBC)
  • One (1)
  • No
  • Not required.
    -
  • No, but recommended to satisfy mind & management test
  • N/A
  • No (unless one opts to pay 1% tax on profits)
  • 24 Hours (maximum) upon receipt of supported documentation
  • Registered Agent; Registered Office; Company Seal

Type of Company - International Business Company (IBC)

Minimum No.of Directors - One (1)

Bearer Shares allowed - No

Public Disclosure of Directors/Shareholders - Not Required

Local Director Required - No, but recommended to satisfy mind and management test

Standard Authorised Capital - N/A

Audited Accounts Required - No (unless one opts to pay 1% tax on profits)

Time to Incorporate - 24 Hours (maximum) upon receipt of supported documentation

Other requirements - Registered Agent; Registered Office; Company Seal

Types of IBCs

Holding Companies

A holding company by its very definition is a company whose business it is to hold shares in and to exercise management and control of other companies. Its uses include the collection of dividends from a subsidiary, which may in turn be reinvested, free of tax. In the event of the sale of the shares in the subsidiary to a third party, profits are maximized there being no taxes payable on such sale.

Personal Investment Companies

The business of this kind of Company is to invest in securities on behalf of its owners. Its major asset is usually a securities portfolio from which it will earn profits from trading and dividends in a low tax or no tax jurisdiction.

Import / Export Companies

These companies are often established to service a specific, or a specific group of companies with enhanced focus on their needs for which a corresponding premium is charged.

Professional Service Companies

These companies allow professionals to secure their income offshore as professional fees are paid directly into the offshore corporation, which company will in turn pay the professional an agreed sum for any part of the service undertaken from their home jurisdiction for tax reporting purposes.

Intellectual Property Holding Companies

The use of this type of company is ideal for a developer or purchaser of intellectual property. The owner of a design or other intellectual property when sold naturally shall be entitled to royalties upon its reproduction. Those rights should be sold to the offshore company, which will in turn license onshore companies to distribute the same. The offshore company may then receive the royalties from the onshore companies directly.

Finance Companies

A common use of an offshore holding company is to fund a secondary company through loans in circumstances where the secondary company is located in a country that allows for the deduction of interest on such loans as a business expense. This strategy enables a group of companies to in effect lend money to itself and collect interest income in a zero or low tax jurisdiction while at the same time allowing the onshore company to subsidize interest earnings.

International Business Companies - IBC FAQ

What is an IBC?

An IBC is a company which does not carry on business with persons resident in St. Lucia; nor owns an interest in real property situate in St. Lucia, otherwise than by holding a lease of property for the purpose of it's operations; nor does it carry on banking, trust, insurance or re-insurance business without a specific licence or provide a registered office for companies.

Not Carrying on Business with Persons Resident in St. Lucia.

An IBC will not be considered to be carrying on business with persons resident in St. Lucia by virtue only of its holding bank accounts, records, holding directors and/or members meetings in St. Lucia. An IBC is also able to hold shares, debt obligations or other securities in companies incorporated in St. Lucia. Further, residents of St. Lucia may hold its shares.

Structure of an IBC

What Documents are Required to Incorporate an IBC?

An IBC like any other company is constituted by a Memorandum and Articles of Association as is traditionally used in company formation.

Are there Any Capital Requirements for an IBC?

There is no fixed minimum authorized capital requirement nor is there a maximum limit on the amount of authorized capital.

How Many Subscribers to the Memorandum are Required for the Incorporation of an IBC?

The Registered Agent subscribes to the Memorandum and articles of Association if an IBC is to be incorporated.

What Kind of Share Structure is Possible in an IBC?

It is possible for an IBC to issue many kinds of shares including fractional shares. Moreover, the shares in an IBC may be issued in various classes. A share register is to be kept at the registered office. An IBC can purchase, redeem or otherwise acquire and hold its own shares.

Management & Administration of an IBC

PROVISIONS IN THE ACT RELATING TO THE MANAGEMENT AND ADMINISTRATION OF AN IBC

The International Business Companies Act makes various provisions relating to the management and administration of an IBC. These provisions, perhaps surprisingly, do not complicate the administrative aspects of an IBC but rather have the effect of simplifying its administration. Other aspects of IBC's such as the incorporation can be made simpler by these provisions, if they are taken advantage of, as the provisions allow for the drafting of shorter and less convoluted Articles of Association.

Who Manages an IBC?

The act provides that a Board of Directors consisting of at least one director shall manage an IBC.

Is the Board of Directors required to meet Regularly?

The Board of Directors is not obliged to hold Directors meetings with any specified frequency. Moreover, when meetings are held the Act provides that such meetings may be held by telephone and other electronic means, thus the Act is also considered to be technologically modern. It is further provided that an alternate may be appointed by the director to attend such meetings in his place.

What are the Terms of a Director's Appointment?

The terms relating to a director's appointment and service on the Board of Directors are all provided for in the Act, subject, of course, to any alterations that may be made in the companies constitution.

Are Decisions Taken required to be invoked by Resolution?

Yes, all acts undertaken by the company are effected by resolution. The IBC however, does not subscribe to the concepts of special and extraordinary resolutions. Thus acts of the company, whether initiated by members or directors, are effected by resolutions passed on simple majority. Many acts do require that the Memorandum and Articles of the company be amended. Such amendments may be effected by resolution of the members or directors, and filing the amendment with the Registrar.

What Records are required to be kept by an IBC?

An IBC must keep a share register, minutes of all directors, members and committee meetings, copies of all resolutions, a register of directors and officers, and finally an IBC must keep such accounts and records as the directors feel necessary to reflect the financial position of the company. These documents are required to be kept at the company's registered office, which must be situated in St. Lucia. It is also necessary that there is an imprint of the company seal kept at the company's registered office.

Incorporation Processes

THE INCORPORATION PROCESSES OF AN IBC

What Steps are to be taken when Incorporating an IBC?

A. The First step in the process of incorporating an IBC is to reserve the name of the company. This process is a fast and efficient one, which guarantees that the reservation of a name will be dealt with, within a 24-hour period.

B. The next step is to submit to The Registry the necessary Documents of Incorporation and the Incorporation Fees. The documents required for an incorporation of an IBC are the Memorandum of Association and Articles of Association along with a completed Due Diligence Questionnaire.

C. Once the documents have been lodged with the Registry, they will be inspected and, if approved, a Certificate of Incorporation will be issued. This process of the examination and approval of the documents is also one which is efficiently operated under a guarantee that the lodged documents will be inspected and approved, or not approved, as the case may be, within a 24-hour period of their receipt by the Registrar of IBC's.

D. Incorporation in the manner described, can either be done manually, or through the public online Registry which allows for speed and convenience while maintaining confidentiality.

Is it Possible for an Existing Company to Become an IBC?

An existing company, whether incorporated in a local, or, a foreign jurisdiction may continue as an IBC; the company would only be required to file with the Registry Articles of Continuance along with a Certificate of Good Standing and the Continuation Fee as well as the existing or to be adopted Articles and Memorandum. Again, the process of continuing a company as an IBC is cloaked by a guarantee that a Certificate of Continuation will be issued within 24 hours of the lodging of the documents with the Registry.

Are there any Restrictions in Respect of Mergers or Consolidations?

It is possible for an IBC to merge or consolidate with other companies irrespective of the status of those other companies not being IBC's, provided that the surviving company will be an IBC. Once the appropriate steps of internal administration have been taken, then Articles of Merger or Consolidation ought to be executed by each company, they are then to be submitted for registration at the Registry, who will again guarantee that a Certificate of Merger or Consolidation will be issued (where it can be) within 24 hours from the time of receiving the Articles.

cost of an ibc

Cost of incorporation is reasonable and comparable to any of the other sub-regional offshore jurisdictions.

Is an IBC Exempt from any of the St. Lucian Fiscal Laws?

An IBC and its shareholders are exempted from a number of domestic fiscal laws; these include business license fees, income taxes (unless an election is made), corporation taxes and capital gains taxes. Moreover, IBC's are exempt from stamp duty in respect of transactions relating to the business of an IBC, and exchange control regulations also do not apply to IBC transactions.

Advantages of an IBC

WHAT ARE THE ADVANTAGES OF AN IBC?

Confidentiality

There are two main aspects of the operation of an IBC, which affords the members of a company of this nature a very high degree of confidentiality. Firstly, the annual filing requirements of an IBC are minimal. There is no requirement for the filing of annual returns to The Registry, thus the names of directors and shareholders in the company are not registered for public inspection. Secondly, the records that the company is required to keep by the Act need not be registered but may be kept at the companies' registered office. This means that they are not open to public inspection. They are however, open to the inspection of a shareholder, and even that right to inspection is curtailed to be only "in furtherance of a proper purpose".

Scope of Power

The only limits on an IBC are those to be found in its inherent definition. An IBC can therefore carry out most business activities, this is due mostly to the broad scope statutorily allowed to an IBC's objects clause, so that an IBC is able to express its objects and purpose as being able to do anything that is legal and not contrary to the laws of St. Lucia.

Simplicity of Incorporation

The incorporation of an IBC is also advantageous by virtue of its simplicity. Moreover, all stages of incorporation are dealt with, within a 24-hour period. Further, there is no minimum capital requirement and the subscriber is the local registered agent.

The Capital Structure Allowed in an IBC is Very Broad

An IBC may (through the availability of various kinds of shares and classes of shares) set up its company's share structure in numerous ways. This is due to the provisions allowing shares to be issued with or without par value, as well as provisions made for fractional shares.

Simplicity of Operation and Maintenance

An IBC may be incorporated under a very simplistic mode of operation, as its management can be put in the hands of its directors; it need only have one director, directors can be individuals or corporations and need not be residents of St. Lucia Moreover, the company actions are effected by resolutions passed on a simple majority and the complicated special and extraordinary resolutions are non-existent in an IBC. Its maintenance is just as simple as it really only requires the retention of a registered office in St. Lucia. It does have to keep certain documents at its registered office, but there are no annual returns to be filed with The Registry, though the company must be renewed annually.

International Business Companies - IBC Application

INTERNATIONAL BUSINESS COMPANY APPLICATION

There are 2 methods of applying for an international business company. You may print out an application and fax or mail it to us at your convenience, or you may apply directly online. The application is fairly short and can be completed quickly and easily.

Mail or fax application [PDF] - Requires Acrobat Reader

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