International LLC Formation: Everything You Need to Know
International LLC formation involves determining the right type of company and completing the formation formalities based on the jurisdiction's regulations.3 min read
Updated November 12, 2020:
International LLC formation involves determining the right type of company for your business, deciding on the best jurisdiction for incorporation, and completing the formation formalities according to the regulations of that jurisdiction.
How to Start an Offshore Company
Compared to onshore incorporation, forming an offshore company is usually easier due to business-friendly legislation. With the help of an offshore service provider (OSP), you can form a company in just a couple of days.
You should consider the following aspects before starting an offshore company:
- The type of company you need.
- The number of persons you will need.
- The most suitable offshore location for incorporation.
- Additional services you will need, e.g., business bank account and nominees.
International Business Company (IBC)
An IBC or an international business company is like a private limited company. It issues shares to its members, has an elected board of directors, and its shares are not listed in a stock exchange.
Following are the principal features of an IBC:
- You must pay an annual fee, which is usually between $100 and $500, but you are completely exempted from taxes.
- Your company details do not go on public records.
- You need not disclose the ultimate beneficial owner (UBO).
- The restriction on business activities is minimal.
- You can have bearer shares and registered shares, none of which are publicly traded.
- You need not maintain books of account or get your business transactions audited.
- The company must have at least one shareholder and one director, thus allowing for a one-person company.
IBCs are the most common type of offshore companies. There are hundreds of thousands of IBCs operating throughout the world.
An IBC can use a number of different suffixes like Limited, Ltd, Incorporated, Inc., Corporation, Corp., Company, and Co., depending upon the jurisdiction where it's registered.
Private Limited Company
Private limited companies are the next popular form of offshore company after IBC. These companies have the following attributes:
- They are exempt from tax or subject to tax at a very low rate.
- Confidentiality of owner and company information is not that strict; the name of the directors and even shareholders, in some cases, may go on public record.
- Usually, you must maintain proper books of account and also get them audited in some cases.
Limited Liability Company (LLC)
Limited liability companies are not that popular in offshore jurisdictions.
Following are some offshore jurisdictions that allow forming an LLC:
- Belize. (Belize only allows forming an LLC with a limited life of maximum 50 years.)
- Costa Rica.
- Marshall Islands.
- Saint Kitts and Nevis.
- The United States. (Delaware is the most popular jurisdiction in the US.)
Popular Offshore Jurisdictions
Following are some of the most popular jurisdictions for forming an offshore company and the common type of company they support:
- Seychelles: IBC
- Belize: IBC
- British Virgin Islands (BVI): Business Company (BC)
- Panama: Private Limited Company
- Hong Kong: Private Limited Company
- Mauritius: Global Business Category (GBC) II
Who Are Nominees?
Nominees are the individuals or companies that act as directors or shareholders in an offshore company, so that your name can be kept off the company records. Assigning of nominees can be helpful especially in cases where the names of directors or shareholders are published in public records. Even in other cases, you can use nominees for additional privacy. However, remember that using nominees may make it difficult, although not completely impossible, to open a bank account in your own name.
Antigua International Limited Liability Company (ILLC) Benefits
An Antigua International Limited Liability Company (ILLC) is a type of private limited liability company.
It enjoys the following benefits:
- It allows complete foreign ownership.
- You get complete tax exemption in Antigua.
- The liability of members is limited.
- Assets of members and the company are protected against judgments of foreign courts.
- Members' names are kept private; they are not included in public records.
- Complete confidentiality is maintained; anyone who discloses any information to a third party without the management's authority or under a court order can be subjected to a two-year imprisonment and a fine of $50,000 EC.
- You just need one member for formation.
- The official language of Antigua is English since it was British colony.
Steps to Form an Antigua ILLC
- Choose a unique name for your ILLC.
- Prepare and file articles of incorporation along with an application and eligibility declaration. Upon approval, you will be issued a certificate of organization.
- Appoint a local registered agent.
- Members may adopt an LLC operating agreement.
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