Harbor Financial Services | Offshore 101 |IBC

Step 1. International Business Corporation (IBC)

An IBC is a corporation formed in a tax haven country. An IBC is completely private; the founder (you) may be the only person in the company, may completely control it and may be the sole shareholder (owner). No one else need be involved or have any knowledge of the IBC’s business or affairs. The founder may include others in the IBC if he/she wishes to, but there is no obligation to do so. The founder/owner’s identity remains confidential through the use of bearer shares. The person or organization who holds the bearer shares is the IBC’s legal owner.

For the vast majority of clients, forming a new IBC achieves their goals completely. However, there are some who wish to purchase an IBC that is already in existence and who are willing to incur the additional expense that comes with it. A small percentage of individuals and corporations that go offshore want to demonstrate that their company has been in existence for several months or years. A Shelf Company is the perfect solution for this scenario. An offshore Shelf Company, also known as an "aged company," is an IBC that has already been in existence for weeks, months, or years. Most Shelf Companies are literally sitting on a shelf waiting to be purchased, thus the name Shelf Company. A Shelf Company affords the same privacy and asset protection advantages that a newly formed company provides.

Shelf Companies are almost always more expensive than newly formed IBC's. In some cases a Shelf Company's price may be several times the price of a newly formed IBC. This is due to the fact that each year that an IBC is in existence a fee (called an "annual fee" or a "renewal fee") must be paid. The price of a Shelf Company increases each year by at least the price of the renewal fee. For example, if a Shelf Company is three years old, the purchase price not only includes the price of a newly formed IBC, but also includes three years of annual fees.

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