Setting up an international business corporation, or IBC makes good business sense for many companies. There are some common misconceptions that many people struggle with when presented with the idea though. To help clear the air and help people feel safer with this business tactic, here are five of those misconceptions and why they aren’t true.
1. Misconception: International business corporations are illegal.
Offshore business has been done for many decades legally.
It is highly regulated, which is done to prevent illegal activity. Most offshore corporations are created to help reduce taxes, which gives companies more money to re-invest and grow. This is a strategy often adopted during changing economic circumstances, tax reform, and even political cycles.
2. Misconception: The reporting requirements for international business corporations are too onerous.
While there is paperwork and there is a process of setting up an international business corporation, you don’t have to do it alone. Having a knowledgeable lawyer in your corner is invaluable to making sure everything is in order. The lawyer can always answer questions you have after setting up the corporation too. Hiring the right lawyer for the job is well worth the cost.
3. Misconception: International business corporations are a passing trend.
Even though an IBC or offshore business might seem like a recent way to do business, it has been happening for over 100 years. That is good news because trends come and go, but this will not. Today’s version is different and may have small adjustments in the future as markets grow.
4. Misconception: International Business Corporations are only done in remote locations.
There are some islands that are well-known for great tax laws for forming an international business corporation, but business happens all over the world. We highly recommend forming a Panama offshore company because their laws are compatible with running business in multiple countries. It is a popular country for forming offshore businesses, registering vessels, and more.
5. Misconception: International business corporations are only for tax reductions.
While tax planning is the main benefit of forming an international business corporation, it is not the only one. Other benefits of an IBC include protecting assets, having more privacy, and save money. Protecting assets is done by placing assets behind a holding company for investing. Privacy is increased through an international business corporation because there is less access to the information of the business when it is in a different company like Panama.
Creating an international business corporation can help your business save money because it is less expensive to operate. Oftentimes, it is less expensive to maintain too.
If you are looking to create an international business corporation, you don’t have to do it alone. The lawyers at Mata & Pitti have years of experience to help answer your questions, handle the paperwork, and be active in keeping your corporation going. Making sure everything is done correctly to meet all the laws of both countries is important, so make sure you have an experienced partner on your side.