7 Ways Offshore International Business Companies (IBC) Can Empower You
Knowing about offshore international business companies (IBC) is essential if you want to be able to negotiate the offshore investment world to your best possible advantage. This article will show you seven ways that offshore international businesscompanies (IBC) can empower you, allowing you to maintain control over your investment while remaining protected.
First though, let's define the parameters of the discussion. Strictly speaking, a structure consists of a combination of two or more components, often an International Business Corporation owned by a trust. These are merely vehicles used by investors for obtaining the 3P's of offshore investment - profit, privacy, and protection. When offshore international business companies (IBC) are set up correctly you do not personally own it. This is a difficult, but essential, concept: control is more important than ownership. Confused? Imagine sitting in a chauffeur-driven limousine. You might not own the car, but you control where it goes and when, via instructions given to the chauffeur. Because the car isn't yours, if it were involved in an accident you couldn't be held liable. This example captures the essence of offshore international business companies (IBC). Legal note: This is intended only as an example to illustrate an overly simplified view of how control could be exerted without ownership. It is not intended as legal advice or opinion. The first way that offshore international business companies (IBC) can open up opportunities is by allowing you access to companies that prefer to deal with offshore entities. Offshore international business companies (IBC) also let you profit from an increased range of investment opportunities. A country like Australia, for example, whose market share is less than 1.3% of the world's capital market, is denied access to 98.7% of the global economy. Being able to take advantage of investments from around the world significantly increases your investment potential.Because offshore international business companies (IBC) are in tax havens, they allow you to defer taxation - and, in some instances, even eliminate it. If we compare a $10,000 investment placed in an onshore account, and the same amount placed in an offshore account, each with a 15% return, a management fee of 2%, and a tax rate of 30%, we find that, with all taxes added in, the total return to the investor is very different in each case. The onshore account will make a total return of 8.2%, compared to 12.7% for the offshore account. The difference is striking, and shows that offshore international business companies (IBC) can lead directly to improved profits. The fourth asset inherent in offshore international business companies (IBC) is its protection of assets from legal judgments. Because of the strict secrecy and privacy laws in place, it is considerably more difficult for a potential litigant to find where assets are located. This brings us to the fifth point: offshore international business companies (IBC) discourage litigation. In some tax havens, you must accomplish three things before litigation can occur:
1) Prove that a crime was committed. As an investor, privacy is definitely one of your foremost concerns. Offshore international business companies (IBC) allow you to take advantage of privacy laws to gain anonymity. As tax havens generate money by conducting business in a discreet manner for their clients, your privacy and anonymity are virtually assured. If you're using a structure that is properly set up, you don't actually own anything, but instead are in control of it. This means that your death duties and estate taxes are reduced, and, in the event of your death, the control is simply passed on to the nominated parties. Finally, offshore international business companies (IBC) protect your money in case of civil unrest. If your entire wealth were held in one country and a civil war occurred, political changes could make it possible for all assets held in the country to be lost. It's happened before - during World War II, citizens of countries that fell under communist rule lost everything. Offshore international business companies (IBC) are an essential element in offshore investment accounts and knowledge, and with the above advice, you should be well equipped to keep your money under your own control, while still remaining protected from excessive taxes and many legal ramifications.
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