INTERNATIONAL BUSINESS COMPANIES
- IBC FAQThe International Business Companies Act, 1999
Definition of an IBC
Structure of an IBC
Management and Administration of an IBC
Incorporation Processes
Cost of an IBC
Advantages of an IBC
THE DEFINITION OF AN IBC
What is an IBC?
An IBC is a company which does not carry on business with persons resident in St. Lucia; nor owns an interest in real property situate in St. Lucia, otherwise than by holding a lease of property for the purpose of it's operations; nor does it carry on banking, trust, insurance or re-insurance business without a specific licence or provide a registered office for companies.
Not Carrying on Business with Persons Resident in St. Lucia
An IBC will not be considered to be carrying on business with persons resident in St. Lucia by virtue only of its holding bank accounts, records, holding directors and/or members meetings in St. Lucia. An IBC is also able to hold shares, debt obligations or other securities in companies incorporated in St. Lucia. Further, residents of St. Lucia may hold its shares.
THE STRUCTURE OF AN IBC
What Documents are Required to Incorporate an IBC?
An IBC like any other company is constituted by a Memorandum and Articles of Association as is traditionally used in company formation.
Are there Any Capital Requirements for an IBC?
There is no fixed minimum authorized capital requirement nor is there a maximum limit on the amount of authorized capital.
How Many Subscribers to the Memorandum are Required for the Incorporation of an IBC?
The Registered Agent subscribes to the Memorandum of Association if an IBC is to be incorporated.
What Kind of Share Structure is Possible in an IBC?
It is possible for an IBC to issue many kinds of shares including fractional shares. Moreover, the shares in an IBC may be issued in various classes. A share register is to be kept at the registered office. An IBC can purchase, redeem or otherwise acquire and hold its own shares.
PROVISIONS IN THE ACT RELATING TO THE MANAGEMENT AND ADMINISTRATION OF AN IBC
The International Business Companies Act makes various provisions relating to the management and administration of an IBC. These provisions, perhaps surprisingly, do not complicate the administrative aspects of an IBC but rather have the effect of simplifying its administration. Other aspects of IBC's such as the incorporation can be made simpler by these provisions, if they are taken advantage of, as the provisions allow for the drafting of shorter and less convoluted Articles of Association.
Who Manages an IBC?
The act provides that a Board of Directors consisting of at least one director shall manage an IBC.
Is the Board of Directors required to meet Regularly?
The Board of Directors is not obliged to hold Directors meetings with any specified frequency. Moreover, when meetings are held the Act provides that such meetings may be held by telephone and other electronic means, thus the Act is also considered to be technologically modern. It is further provided that an alternate may be appointed by the director to attend such meetings in his place.
What are the Terms of a Director's Appointment?
The terms relating to a director's appointment and service on the Board of Directors are all provided for in the Act, subject, of course, to any alterations that may be made in the companies constitution.
Are Decisions Taken required to be invoked by Resolution?
Yes, all acts undertaken by the company are effected by resolution. The IBC however, does not subscribe to the concepts of special and extraordinary resolutions. Thus acts of the company, whether initiated by members or directors, are effected by resolutions passed on simple majority. Many acts do require that the Memorandum and Articles of the company be amended. Such amendments may be effected by resolution of the members or directors, and filing the amendment with the Registrar.
What Records are required to be kept by an IBC?
An IBC must keep a share register, minutes of all directors, members and committee meetings, copies of all resolutions, a register of directors and officers, and finally an IBC must keep such accounts and records as the directors feel necessary to reflect the financial position of the company. These documents are required to be kept at the company's registered office, which must be situated in St. Lucia. It is also necessary that there is an imprint of the company seal kept at the company's registered office.Top
THE INCORPORATION PROCESSES OF AN IBC
What Steps are to be taken when Incorporating an IBC?
A. The First step in the process of incorporating an IBC is to reserve the name of the company. This process is a fast and efficient one, which guarantees that the reservation of a name will be dealt with, within a 24-hour period.
B. The next step is to submit to The Registry the necessary Documents of Incorporation and the Incorporation Fees. The documents required for an incorporation of an IBC are the Memorandum of Association and Articles of Association along with a completed Due Diligence Questionnaire.C. Once the documents have been lodged with the Registry, they will be inspected and, if approved, a Certificate of Incorporation will be issued. This process of the examination and approval of the documents is also one which is efficiently operated under a guarantee that the lodged documents will be inspected and approved, or not approved, as the case may be, within a 24-hour period of their receipt by the Registrar of IBC's.
D. Incorporation in the manner described, can either be done manually, or through the public online Registry which allows for speed and convenience while maintaining confidentiality.
Is it Possible for an Existing Company to Become an IBC?
An existing company, whether incorporated in a local, or, a foreign jurisdiction may continue as an IBC; the company would only be required to file with the Registry Articles of Continuance along with a Certificate of Good Standing and the Continuation Fee as well as the existing Articles and Memorandum. Again, the process of continuing a company as an IBC is cloaked by a guarantee that a Certificate of Continuation will be issued within 24 hours of the lodging of the documents with the Registry.
Are there any Restrictions in Respect of Mergers or Consolidations?
It is possible for an IBC to merge or consolidate with other companies irrespective of the status of those other companies not being IBC's, provided that the surviving company will be an IBC. Once the appropriate steps of internal administration have been taken, then Articles of Merger or Consolidation ought to be executed by each company, they are then to be submitted for registration at the Registry, who will again guarantee that a Certificate of Merger or Consolidation will be issued (where it can be) within 24 hours from the time of receiving the Articles.Top
THE COST OF AN IBC
Cost of incorporation is reasonable and comparable to any onshore or offshore jurisdiction.
Is an IBC Exempt from any of the St. Lucian Fiscal Laws?
An IBC and its shareholders are exempted from a number of domestic fiscal laws; these include business license fees, income taxes, corporation taxes and capital gains taxes. Moreover, IBC's are exempt from stamp duty in respect of transactions relating to the business of an IBC, and exchange control regulations also do not apply to IBC transactions.Top
WHAT ARE THE ADVANTAGES OF AN IBC?
Confidentiality
There are two main aspects of the operation of an IBC, which affords the members of a company of this nature a very high degree of confidentiality. Firstly, the annual filing requirements of an IBC are minimal. There is no requirement for the filing of annual returns to The Registry, thus the names of directors and shareholders in the company are not registered for public inspection. Secondly, the records that the company is required to keep by the Act need not be registered but may be kept at the companies' registered office. This means that they are not open to public inspection. They are however, open to the inspection of a shareholder, and even that right to inspection is curtailed to be only "in furtherance of a proper purpose".
Scope of Power
The only limits on an IBC are those to be found in its inherent definition. An IBC can therefore carry out most business activities, this is due mostly to the broad scope statutorily allowed to an IBC's objects clause, so that an IBC is able to express its objects and purpose as being able to do anything that is legal and not contrary to the laws of St. Lucia.
Simplicity of Incorporation
The incorporation of an IBC is also advantageous by virtue of its simplicity. Moreover, all stages of incorporation are dealt with, within a 24-hour period. Further, there is no minimum capital requirement and the subscriber is the local registered agent.
The Capital Structure Allowed in an IBC is Very Broad
An IBC may (through the availability of various kinds of shares and classes of shares) set up its company's share structure in numerous ways. This is due to the provisions allowing shares to be issued with or without par value, as well as provisions made for fractional shares.
Simplicity of Operation and Maintenance
An IBC may be incorporated under a very simplistic mode of operation, as its management can be put in the hands of its directors; it need only have one director, directors can be individuals or corporations and need not be residents of St. Lucia Moreover, the company actions are effected by resolutions passed on a simple majority and the complicated special and extraordinary resolutions are non-existent in an IBC. Its maintenance is just as simple as it really only requires the retention of a registered office in St. Lucia. It does have to keep certain documents at its registered office, but there are no annual returns to be filed with The Registry.
