What is an IBC or International Business Corporation?
An IBC is essentially a limited liability corporation.
A limited company that has the same rights and privileges as that of an ordinary limited company. With the prime difference being that they generally are not allowed to do business in the country where they have formed the corporation. They can do business in all other countries of the world which will allow them permission to conduct their business.
Let me expound. They are not allowed to do business in the country they are formed but they are allowed to have their administrative offices there. They just cannot conduct their normal course of business.
Now you say what is the benefit of having an IBC if they have the same rights and responsibilities but cannot operate in the country in which they are formed.
You have the responsibility of paying the normal taxes and adhering to all of the laws of the country in which you are doing business. Therefore you do have to pay income tax there.
The benefit of the IBC is that once you have taken your taxed paid funds or profits out of the country in which you are doing business and repatriate them back into the country where your IBC is resident then the gain you make on those funds are not taxable. As the profits the company makes are not taxable in the country of residence. This may also include something as simple as interest on the deposits you have in the country of residence. Many of these countries do not charge tax on the interest earned. Or capital gains on the assets of the company. One
Assets of the IBC can grow tax-free or with minimal tax once the tax has been paid in …