ate an IBC on passive income (i.e.

generation to the next’.

rying on some form of real business

rental income, royalties, dividends

ts and/or do transactions in differ-

activity in the country of domicility

and other types of inward cash flow)

ent currencies (up to 10 currencies).

and cannot be a shell company, as in

is generally 0%. In a situation where

IBCs owners can also simultaneously

the case with offshore companies.

a company is a multi-assets company

invest in property, a business, stocks

Another key point to consider is

and its parent company is an IBC, it

and shares, bonds, forex and other

the tax treaty agrcountries, the tax

will also enjoy tax exemptions. Addi-

money markets tax free; all under one

treat will prohibit double taxation.

tionally, in some IBC status countries,

umbrella.

In this way, owners of IBCs will be

capital gains tax is exempted for a

taxed in the jurisdiction where the

period of 20 years and corporation

IBC is incorporated and not where

KEY POINTS TO

tax is charged at 0-2.5%. 

the assets are help. In most cases, the

CONSIDER WHEN

Further still, most IBCs are exempt-

location where the IBC is set up, the

SETTING UP AN IBC:

ed from VAT, property tax, stamp duty

tax rate is usually much lower than

In setting up an IBC, there are a

and the owners can bring money back

the country where assets are held and

number of requirements a property

into the country without scrutiny

the investor will benefit from paying

investor will need to satisfy and it is

from the tax authorities. According

the lower tax.

best to speak with your tax advisor

to Santiago Gomes of International

One destination that has a treaty

first. Nevertheless, owning an IBC is

Services Limited, ‘a Belize incorporat-

with the UK and is proving very popu-

a great way for reaping the rewards

ed IBC pays zero tax and are mainly

lar among investors is Barbados

of your hardworking investment. It

used for effective estate planning

should be noted that a key require-

and the transfer of wealth from one

ment of an IBC is that it has to be car-

CONCLUSION:

In today’s world, setting up an IBC is definitely the way forward in order to protect your

real estate assets, reduce investment cost, secure long term returns on capital invested,

and cash-flow and effective wealth transfer, particularly, in times of austerity and tight

liquidity. IBCs are back in faction. There is no need to hide. Instead, you pay taxes

legitimately and protect your wealth, albeit at a far lower rate.