IBCs and LLCs
Asset protection can effectively be achieved via the creation of an International Business Company (IBC) or a Limited Liability Company (LLC). Both are international structures set up in offshore jurisdictions such as Barbados of the Turks & Caicos Islands, offering you financial security and asset protection. With both IBCs and LLCs, some of your assets can be held in foreign jurisdictions.
IBCs and LLCs are separate legal entities, and using either or both to protect your assets means your assets are protected because they are not in your own name, and not easily traced by others. It makes it virtually impossible for your financial enemies to ‘pierce the corporate veil’ and get their hands on your assets.
However, it must be noted that using such vehicles, whether onshore or offshore, requires careful structuring to obtain asset protection and tax benefits
What is an IBC and how can it help you?
IBCs have shareholders who own the company. They are managed by directors. An IBC can keep its earnings each year – including those generated from foreign sourced income – the earnings do not have to be distributed. So IBCs are effective operating companies generating income annually.
Importantly, IBCs protect assets from legal claims against them, and against the personal assets of directors and shareholders. An IBC can even be used to protect assets from a spouse in divorce proceedings, so if you are concerned about the safety of your assets in relation to a greedy spouse, we can advise you on whether an IBC is the way forward for you.
What is an LLC and can it help you?
LLCs are essentially a hybrid of a partnership and a corporation – with the benefits of each – but simplifying the tax implications of members owning a beneficial interest. They are particularly useful for those with more modest assets that need protecting.
LLCs are run by managers, and profits and losses are distributed to members annually. LLCs are attractive because income flows from the LLC to its member.
LLCs do not issue shares and there are no shareholders to which an LLC must answer. Typically, offshore LLCs enter into an operating agreement setting out how the members are to relate to each other and how the company is to be managed.
A particular benefit of LLCs set up in foreign jurisdictions is the ease of access to credit – a distinctly attractive pull to many clients. Vitally, there is no personal liability of the members for the debts and obligations of the LLC.
IBC or LLC?
Both IBCs and LLCs allow the client to have some assets in foreign jurisdictions which gives some welcome flexibility as far as different legal jurisdictions and are concerned – particularly if you want to protect specific foreign holdings.
How can we help?
Our asset protection lawyers are highly experienced in both onshore and offshore jurisdictions. Our practice head, Andrew Rogerson, is an internationally known, award winning asset protection specialist barrister with many years’ practical experience in offshore jurisdictions including IBCs and LLCs. Contact us now to find out how we can help protect your assets.