EFSAG offer comprehensive consultancy on all related areas of international company formation. We have provided a detailed overview of frequently asked questions about international company formation below as a useful resource for clients seeking specific information.
Our company FAQ’s cover a host of topics, including: Company Formation, Registration Documentation, Trusts and Company Taxation…
Questions About International Company Formation
An international business company or international business corporation (IBC) is an offshore company formed under the laws of some jurisdictions as a tax-free company which is not permitted to engage in business within the jurisdiction it is incorporated in. IBCs are offshore companies that are most commonly used for offshore banking, to conduct international trade, investment activities, to offer professional services and for asset protection. IBCs are commonly used for the ownership of real property and land; for ownership of intellectual property, licensing and franchising; personal service by individuals working overseas and offshore e-business. An IBC can hold assets in a safe, secure financial center. At the same time, an IBC also allows the owner to retain 100% control of assets. An IBC's assets are extremely private. In the offshore jurisdictions, there is no ITIN required in order to open an IBC bank account. It is a crime for a banker to reveal your association with a bank account to anyone outside of the bank. IBC ownership records are not available in any public record. There are countries with IBC laws that take privacy very seriously. The asset protection provisions in some countries are extremely strong. Many of these countries are island nations that have become financially strong by offering a safe-haven in which to store one’s money.
There is no practical difference between them. They are all offshore legal entities, called differently depending on the jurisdiction. Other terms used include non-resident company or corporation.
This varies with each jurisdiction. For example, once we have received the payment and all the required information, it may take from 1 to 10 days. Time for dispatching the documents by express courier like DHL or FedEx is 3-4 working days to any destination depending on your location. We provide a tracking number by which you can track your package via the internet.
A desirable jurisdiction should be politically neutral, follow a policy of free trade, not interfere with the commercial activities of corporations established there, and provide reasonable assurances of personal and corporate privacy. Language, quality of telecommunications, time zones, availability of professional infrastructure, and other issues are also important. Most popular jurisdictions have a legal system derived from western countries and greatly favor corporations, which are non-resident in nature. There must be a solid commitment to the protection of private property and the promotion of international trade. Most modern International Financial Centers are alike offering the services and products available through government regulation. Because of this, certain law tax jurisdictions have reputations that may or may not be true today, while others have issues with privacy, confidentiality or specific rules for information. Banking rules and regulations are also changing and will have an impact on the jurisdiction we choose. You need a modern business and communications infrastructure with moderate fees. You need not invest or run your business out of the same country that you bank with. We select the "best" of each for our clients. We keep up to date on all jurisdictions developments around the world and have relationships with institutions, legal consultants and advisors worldwide. Each entity we form is tailored to the goals and transactions of each client and we advise you on strategies and solutions.
No. Overseas investing or setting up the structure does not mean that you have to live abroad, or even travel abroad. Overseas investing or setting up an international structure can be done from convenience of your own home through qualified professionals from our office, who will function on your behalf with all involved parties like government departments, banks, notaries, etc. For opening a bank account, we will send you the necessary forms, which when filled, can be sent directly to the bank. At the same time, you are always welcome to visit us if you wish to do so.
This term implies that a taxpayer has arranged his affairs in such a way either that his tax burden is less than it would otherwise have been or that no tax is payable as a result of such arrangement. The term is generally employed so as to indicate that the taxpayer has acted in a lawful manner and differs fundamentally in this regard from the concept of "tax evasion" which is illegal.
Fraudulent or illegal arrangements made with the intention of evading tax, e.g. by failure to make full disclosure to the revenue authorities. The term denotes those activities deliberately undertaken by a taxpayer to attempt to free himself in an illegal manner from the tax to which he is subject. Tax evasion embraces such activities as sham transactions and the falsification of tax returns or of books and accounts. The element of illegality distinguishes tax evasion from tax avoidance.
For banking purposes, there is very little difference. All entities come with everything you need to open bank accounts. However, there is some difference in use. Generally, IBC is used for profit ventures involving business activity such as securities trading, banking, international trade, ownership of assets etc. IBC is considered to be the most common and popular solution. Foundations are generally used for non-profit activities such as charities, receiving or giving donations, grants, etc., but can also be used for holding purposes such as holding ownership of corporations or any other type of asset. Most of our clients use Foundations to hold ownership of their corporations for additional confidentiality and asset protection. Trusts are generally used for holding purposes such as owning corporations, or holding assets such as real estate.
Nominee Director - a director whose function is passive in nature. The director receives a fee for lending his or her name to the organization. Nominee directors are subject to director responsibilities. Nominee directors are directors that we appoint for you. Each corporation or foundation must have a certain minimum number of directors appointed when registered. The directors names and some of their personal details are on the public deed of the corporation (or foundation) and this information is publicly available. In many cases, our clients prefer NOT to be appointed as directors on the offshore entities due to either privacy reasons, or foreign public directorship reporting rules in their home countries. The nominee directors we appoint are only there to fill in the blanks at the public registry and they have no authority over the entity for any kind of decision making.
Control over the company is gained through the General Power of Attorney signed by the nominee director to the beneficial owner or other person (who the beneficial owner may appoint), plus the undated letter of resignation of the nominee director can also be executed at any time the owner wishes to appoint himself or other person as a director.
A Power of Attorney (POA) is a legal agreement which empowers a person with the authority to pass on this authority to another person or persons and making him the Attorney in Fact. This POA can be general (unlimited) or it can be of a limited nature, that is, the authority can be in all matters pertaining to the company or it can be limited to a specific function. The POA can also be time specific, that is for a fixed period in time with an expiry date or it can be in perpetuity.
They are shareholders, who are holding the shares of your company only nominally. At any point, the Nominal Shareholder will transfer the shares he/she formally holds, to the person(s) appointed by the Beneficiary and according to his/her instructions.
Negotiable share certificates made out in the name of the bearer and not in the name of a particular person or organization. This is a tremendously powerful feature for preserving anonymity and privacy, but can be very dangerous if the certificate falls into the wrong hands. Possession of the certificate constitutes ownership of the asset(s). The shares in the company with bearer shares are transferable by physical delivery of the certificates and the name of the holder is not registered in the books of the company, unlike registered shares, which are transferable by an instrument of transfer being supported by relevant resolutions and entries in the records of the company available for public.
Normally, bearer shares are required to be held in the country of incorporation by a Fiduciary Institution for all the jurisdictions where it is allowed to register the company with bearer shares. It is also required that the agent who registers the company must know the beneficial owner behind the bearer shares. Further to this, banks are reluctant to open bank accounts for companies which have issued bearer shares and some businesses will not enter into agreements and contracts with them. A better alternative is the use of nominee shareholder service with a Declaration of Trust issued by the nominee shareholder to the beneficial owner.
Normally we supply you with standard set of documents which slightly varies depending on jurisdiction: Certificate of Incorporation, Share Certificates, Share Register, Instruments of Transfer (where applicable), Trust Deeds (where applicable), Register of Directors, Secretary and Registered Address, Memorandum and Articles of Association or Charter of the company, Power of Attorney (where applicable), Minutes of the first general meeting of the company, notarized and apostilled copies (where requested by the client).
The corporate documents we provide to you are enough to open an account by yourself. But if you wish to avoid the hassle and guarantee to be acceptable to the bank , you can choose as a supplementary option, our services to open bank account. If you choose this option, we will send you the bank forms with your package of company documents. You should fill in the bank forms and along with a certified photocopy of your passport, send everything to the bank by courier. As soon as the bank receives the package, your account will be activated. We are representing many banks and we can provide you with an ample selection, so you can choose the best bank that suits you. Some banks require further documentation such as bank reference and proof of residence. Sometimes, during the period between the IBC incorporation and the receipt of such documents by the bank the client urgently requires the bank account. In these circumstances a temporary bank account can be opened. Such account can only be used to receive payments. When the original documents are received the same account will be converted into the permanent bank account.
Almost all overseas banks offer various debit and credit card products to their clients. There is also selection of cash cards, prepaid cards, gift cards which can be issued for different purposes and used by both individuals and companies.
Apart from introducing a client company to the bank which we believe to be most suited to its needs, we prepare a necessary board minutes resolution appointing the signatories to the account, we provide the signature cards and application forms, in some cases, partially filled. We advise on how to complete the application forms to the satisfaction of the bank. Most importantly, we know the bank requirements and know how to open the account fast and without serious delays. We do not require you to use our bank introduction service and you should feel free to approach any banks in the world yourself.
Most banks require the company Memorandum and Articles of Association and other companies' documents (public documents) to have an apostille guaranteeing them to be authentic documents and bearing the official stamp of the office of the authorized person to sign the apostille. Apostille documents are also needed for any other statutory use in a country other than the country of incorporation.
A notarized document is a copy of the document which is certified to be a true copy of the original and signed (notarized) by the one who is a registered Notary Public. This notary public is usually an attorney a lawyer or a justice of the peace. An apostille to a document is the authentication, by a specially appointed government official, of a copy of a public document which has been notarized as a true copy by a notary public. The apostille is accepted under Hague convention of 1961 to all the countries which are signatories to it. Not all countries of the world are members of The Hague convention, but the majority of English speaking and European countries are members.
A Double Taxation Agreement (DTA) is entered into between two countries to eliminate the possibility that the same income or gains might be fully taxed in both. This may happen where a natural person or legal entity is resident in one of the countries and has income or gains arising in the other. A DTA allocates the taxing right over items of income and gains to one or other of the countries. Where, however, certain items remain taxable in both, the DTA will generally provide that the country of residence of the taxpayer will either exempt the income or gains from further taxation or, alternatively, give a credit against its tax for the tax paid in the other country.