All offshore structures (trust, companies etc) have to pay renewal annually to the authorities of the jurisdiction of incorporation, usually via the Registered Agent who might also levy a handling fee.
A written authentication of a public document (e.g. Certificate of Good Standing) issued in accordance with the standards of the Hague Convention of 1961. Documents issued in a convention country, which have been certified by an Apostille, are recognised in all other convention countries without any further authentication. Having a document apostilled requires payment of additional fees but it can be useful if the same document is going to be used in different jurisdictions or countries.
Articles of Association
These are the regulations governing the rights and duties of the members of a company amongst themselves and deal with internal matters such as general meetings, appointment of directors, issue and transfer of shares, dividends, accounts and audits.
In most countries one of the terms of the relationship between banker and customer is that the banker will keep the customer's affairs secret. Staff members are normally required to sign a declaration of secrecy as regards the business of the banks.
Beneficial Owner (Beneficiary)
A natural person or a legal entity enjoying the right to own an IBC, offshore company or to receive benefits of a trust upon conditions established by the settlor in a trust deed.
Bye-Laws or By-Laws
The By-laws of a company (in certain jurisdictions) set out the internal laws by which the company is governed.
Certificate of Incorporation - The evidence of incorporation and registration of the legal entity with the companies registrar of the jurisdiction. It includes basic information about the company including the name, date and place of registration, entry number in the register, etc.
Certificate of Good Standing
The official attestation by the companies registrar of a jurisdiction of incorporation which states that the company legally still exists, is in compliance with the requirements of the local laws (timely payment of annual fees and local taxes, filing the company's annual statements and returns where applicable, etc ) and otherwise remains validly on the companies register.
Certificate of Incumbency
The official attestation, issued by its registered agent or the authorities of the jurisdiction of incorporation, which states that the persons listed in it are the validly appointed directors of the company.
Companies Act or Ordinance
Legislation that provides for the incorporation, registration and operation of international business companies (IBCs) – offshore companies.
The process by which a company moves its legal domicile from one jurisdiction to another , in the process changing the country under whose laws it is registered or incorporated, while maintaining the same legal identity.
A bank, financial services company, registered agent or other entity that has the responsibility to manage or administer the custody or other safekeeping of assets for other persons or institutions in return for ongoing fees.
The part of a company's post-tax profits distributed to shareholders, usually expressed as an amount per share.
The place where company or trust has its legal permanent home, or to which an individual intends to return, or in some cases his country of origin. In other jurisdictions the place where an individual has a long established residence or, in relation to a company, where it is incorporated.
A person who is domiciled in a particular jurisdiction (as a country).
A company that is not actively currently trading in any way. It has a registered name, directors, articles of association, and so on but it has no sales turnover.
Double Taxation Agreement (or Double Tax Treaty)
Agreement between two countries intended to relieve persons who would otherwise be subject to tax in both countries from being taxed twice in respect of the same earnings, transactions or events.
A signed, written order by which one party (the drawer) instructs another party (the drawee) to pay a specified sum to a third party (the payee), at sight or at a specific date. A cheque is technically a sight draft.
Research and analysis of a company or organization done in preparation for a business transaction (including an analysis of the business's structure, an examination of the business's financial health, the identity and credibility of the business's owners, directors, the future potential, an assessment of the risk involved in a company's business, a company's business plan etc).
A company whose activity is limited to holding and managing investments or property but not having ordinary commercial or trading activities. The requirements to achieve holding company status vary in different countries.
International Business Corporation or International Business Company (IBC) - A company e.g. offshore company providing the maximum of privacy, low regulatory burden and limited reporting requirements combined with comprehensive freedom from local taxation. A typical IBC can carry on business outside its jurisdiction, have meetings of its Directors and/or Members anywhere in the world, keep bank accounts in various currencies, and not be obliged to file accounts or submit company returns.
A type of business partnership involving joint management and ownership with the sharing of risks and profits as between two or more enterprises based in different countries.
Limited Liability Company (LLC)
This consists of member owners, not shareholders, and a manager. It combines the more favourable characteristics of a corporation and a partnership. The LLC structure permits the complete pass-through of tax advantages and the operational flexibility found in a partnership, operating in a corporate-style structure, but operating with limited liability as provided by the state's laws.
Limited liability partnership (LLP)
A form of the LLC favored and usually used for professional associations, such as accountants and attorneys.
Memorandum of Association (or Company Charter)
The first constitutional document of a company, which must be submitted to the registrar of companies together with the Articles of Association, and which contains company name, address of its registered office, objects and powers, authorised share capital, and statement of limited liability. Can sometimes be combined with the Articles to form the "Memorandum and Articles of Association", or "M&A".
A summary of proceedings of a meeting/assembly/committee.
Money-laundering occurs when organised criminals or terrorists seek to make illegally obtained funds look legitimate by funneling them through a string of banks and businesses until the money's origin is entirely obscured and the money is "clean".
A person or corporate entity acting as a formal director of a company. The corporate director may sign contracts, negotiate loans, etc. for the company but has no personal liability for any action and the real decisions concerning administering and managing the company rest with the Beneficial Owner or its agent.
A company treated by the jurisdiction in which it is incorporated as non-resident for tax purposes or exchange control purposes or both.
Offshore - Offshore is a general international term meaning not only non- resident in your country or jurisdiction but out of the tax reach of your country of residence or citizenship.
Countries and jurisdictions specializing in the provision of financial services. These centers specialize and focus on offering to non-residents more favorable tax environments than that enjoyed in their home territory on international trading activities and/or investments via that country. Other beneficial features of offshore centres may include banking secrecy, privacy, various types of discretionary services and other favorable aspects of the legal environment.
Offshore Finance Company
A company organized in a foreign country, usually in a tax haven country, which handles such financing services as arranging foreign loans in Eurocurrency markets and floating bonds or other forms of indebtedness. Generally the offshore finance company is created to handle the financing requirements of its parent or related companies but is used occasionally to handle the financing needs of the parent company's distributors or agents overseas.
A mutual fund offering its shares to persons resident outside the country in which it is incorporated.
Offshore Holding Company
A company organized in a foreign country which controls one or more affiliate companies and which manages, administers or services its affiliate companies usually located outside the country in which the parent company is incorporated.
Offshore Trading Company
A company organized in a foreign country to buy goods from an exporter in one or more other foreign countries and to sell these same goods to importers in other foreign countries. The documents are processed by the offshore trading company and all managerial, administrative and day-to-day financial transactions are handled by it. The goods are almost always shipped from the seller in one country to the buyer in the other country without ever being shipped or landed in the country where the offshore trading company is located.
Onshore is defined as the country in which a private person, a company or any other legal entity is resident for tax purposes.
The most common form of shares. Each ordinary share gives its holder an identical volume of the rights. Holders have the right to vote at the meetings and receive dividends which vary in accordance with the profitability of the company. The holders of the ordinary shares are the owners of the company.
A partnership often offers useful features for the purposes of an overall tax plan. In certain jurisdictions, a partnership may have corporate attributes and resemble a company. However, even where a partnership does not have corporate attributes, requirements relating to formations and registration the nationality and/or residence of partners, limited liability, restrictions on activities, should be examined in the context of the general law governing local partnerships.
Legal concept applied by a country in order to tax commercial activities realised in its territory by a company or person incorporated or resident outside the jurisdiction. The expression is commonly used in double taxation agreements although in practice there is no consistent definition adopted either in double taxation agreements or in jurisdictions which recognise the concept under their general tax laws.
Power of Attorney
A document which authorises a person to act on behalf of another or on behalf of a company.
A person or company designated in the articles of incorporation to represent a company in the jurisdiction of incorporation. A Registered Agent normally provides a Registered Office address, provides liaison with local authorities and receives all legal and tax papers and/or notices addressed to the company, handles the renewal of the business license, provision of duplicate documents, apostilles, etc.
The official address of a company to which authorities, courts, and suitors send their notices, letters and reminders. It must always be an effective address for delivering documents to the company, and is usually provided by a Registered Agent.
Share which is transferred by an instrument of transfer. The name of the holder is registered in the books of the company and the shareholder's name is displayed on the actual share certificate.
The Registrar of Companies, a governmental body controlling the formation and renewal of companies created under the local company acts.
A company treated by the jurisdiction in which it is incorporated or in which it conducts commercial activities as resident for tax purposes or exchange control purposes or both.
All amounts received for the privilege of using intangibles such as patents, copyrights, secret processes and formulae, as well as amounts received for the privilege of exploiting mineral, oil and gas deposits.
Settlor (Creator or Grantor)
A person who actually creates a trust by donating property or assets to be managed and administered by a trustee but from which all benefits and profits will go to a beneficiary.
Shelf Company (Ready-Made Company)
A company that has already been organized and registered with designated capital and registration cost paid, and is placed on an inactive basis, with annual registration, capital and stamp duty fees currently paid but shares held in bearer form and the directors and officers substituted at the time the company is sold, at which point it is taken off the shelf and becomes active. Sale usually involves a change of name and certainly a change of owner and directors.
A subsidiary company is a company under the control of another company through stock ownership.
An entity created for the purpose of protecting and conserving assets for the benefit of a third party, the beneficiary. A trust is governed by a trust deed which is a contract affecting three parties, the settlor, the trustee and the beneficiary. A trust protector is optional but recommended, as well. In the trust, the settlor transfers asset ownership to the trustee on behalf of the beneficiaries.
Trust Deed (Declaration of Trust)
The document that creates a trust and lays down the ways of how the trustees should conduct administration and management of the trust, and how they are to distribute trust assets among the beneficiaries.
A person appointed by the settlor to oversee the trust on behalf of the beneficiaries. In many jurisdictions, local trust laws define the concept of the trust protector. Has veto power over the trustee with respect to discretionary matters but no say with respect to issues unequivocally covered in the trust deed. Trust decisions are the trustee's alone. Protector has the power to remove the trustee and appoint trustees. Consults with the settlor, but the final decisions must be the protector(s). The extent of protector's powers in each separate case is defined by the settlor.
A person who administers and manages the property transferred in a Trust. Trustee becomes a legal owner of the property, and has a fiduciary responsibility to act in accordance with a trust deed and for the benefit of the beneficiary.
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