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

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.
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  • 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.