Administration

Most offshore jurisdictions support a specific type of foreign direct investment. These countries allow global entrepreneurs to utilize the local corporate infrastructure to incorporate international business companies (IBC), commonly referred to as offshore companies. To protect and maintain their favorable position as an offshore financial center, most jurisdictions may maximize anonymity whilst limiting the administrative requirements and tax burden for qualifying IBC’s. In a global setting, this approach creates several operational challenges.

Following the various applicable International Business Companies Acts, companies incorporated under these acts shall keep management accounts and records as the directors consider necessary or desirable to reflect the financial position of the company. The books, records and minutes required by these sections shall be kept at the registered office of the company or at such other place as the directors determine. IBC Acts do not require management accounts to be audited. However, there is often a requirement to keep accounts. Failure to keep such accounts results in a financial penalty for each day or part thereof during which the contravention continues.

To qualify for such a relaxed regulatory treatment, the IBC is restricted from doing business, holding assets and executing activities in the country of incorporation. As such, IBC’s conduct their business internationally. In the current era, where political and economic unions strengthen and protect their internal markets and sovereign states maintain their own principles, offshore IBC’s are often subject to further scrutiny. Administration, periodic review and even financial audits may be required to enter foreign territories. As such, the offshore IBC cannot solely rely on the regulation in its home state but is often also required to fulfil the requirements in host states where business is done.

Challenges and difficulties may arise when foreign counterparts request additional documentation, information, or administration. Legal Floris LLC and Equation CS are there to assist offshore IBC’s to comply with such requests. We first evaluate your position to determine the right approach towards the issue. Sometimes company structures become obsolete and new opportunities arise elsewhere. Therefore, we consider administration as a starting point to optimize international corporate structures for now and the future.