Why Choose a Dominica IBC?

The need to protect assets existed from as early as ancient Greece, when merchants used islands near Athena to store their merchandise due to 2% tax that was levied on imported goods. Likewise, during the 13th and 17th centuries, the favorable tax treatment that was given to the Hanseatic League contributed to the successful trade along the coast of Northern Europe, the Baltic and the North Sea. Even then, taxes were considered as a factor that affected one’s earnings.

Today, the use of an International Business Company as a flexible instrument for conducting business is merely part and parcel of the new face that business has adopted as a result of globalization and the advent of the Internet. Within the context of constantly integrating world economies and increased capital and labour mobility, Dominican offshore IBCs have allowed for maximized returns on business operations, as well as expansion, by providing a vehicle by which business can be conducted internationally.

The increased formation of offshore companies in Dominica as a tax haven is particularly enhanced by technological advancement which has made it possible to perform electronic business transactions, while the use of switching devices and telecommunications satellites allow easy and quick transmission of and access to information. Initiating the incorporation of a Dominica IBC is thus only a phone call away or at the click of a mouse, without having to incur travel expenses or move from the comfort of one’s home or office for time consuming visits.

Dominican offshore International Business Companies are backed by a progressive IBC Act which was established in 1996. Dominican IBC’s are exempt from taxes for a minimum of twenty years. This allows for effective tax planning, particularly for business men and women who reside in countries that levy exorbitant corporate taxes along with a range of other tax obligations such as inheritance, gift and wealth taxes, including capital gains which are as high as 48% in some countries. In some instances, persons are even taxed on their international income, which may lead to the burden of double taxation in the event that the necessary double taxation avoidance treaties are not put in place.

A Dominica IBC may be used for a variety of commercial activities such as trading, marketing, advertising, shipping, investing, consulting, mining and holding company. For example, an IBC incorporated in Dominica as an investment company can be used through pooling private funds in order to undertake different business ventures in various countries, while being exempt from withholding tax at source and capital gains. A company may also be formed for offering professional services such as business consultancy, legal and medical counseling, translation services, editing and software building. Thirdly, a Dominica offshore company may be used as the intermediary for sales, distribution, export and import by purchasing its goods directly from a local or foreign wholesaler or manufacturer and then making the necessary delivery arrangements for direct delivery to the customer who may be locally or foreign based.

Dominica companies are also an excellent means for protecting assets. Thus, a person can avoid litigation or minimize losses by placing all of valuables in the IBCs name, since claims can only be made on personal property and not on the company’s assets. A person may also choose to only receive dividends or a personal income from the IBC, while allowing it to accumulate wealth for a period of several years until retirement. Upon retiring, an annuity can be taken from the company as a means of survival. In that way, taxes would have been deferred until that time, and would only be applicable to the annuity which is taxable income.

Moreover, a Dominica IBC can be used for distributing wealth in the event of death. All assets placed in the IBCs name can be inherited by the beneficiaries without having to pay inheritance tax. Likewise, real estate can be owned in the name of the Dominican IBC. This presents a great advantage at the moment of selling the property and the company, since there are no capital gains and the transfer process would be as simple as transferring shares to the buyer.

While the increased formation of IBCs is often directly linked to different taxation policies that have given rise to “tax competition” among countries, IBCs are also created as a result of increased competition among businesses. Several Dominican IBCs are formed by businessmen who wish to remain unknown to their competitors. Everyday, innovative marketing tactics are used to maximize profits. Companies may reproduce themselves and their services by creating new companies in order to increase their returns and broaden the target market, while increasing their competitive edge. The incorporation regulations of Dominican IBCs provide absolute confidentiality in regards to the personal identity of the members of a company, and thus permit entrepreneurs to protect their market share and accumulate their assets through protective confidentiality laws. In this regard, an IBC formed in Dominica may also choose to appoint a nominee director, which is provided by the registered agents. In this case, the relevant legal procedure of issuing a Power of Attorney to the true owner(s) of the company is undertaken.

Last, but not least, Dominican IBCs further ensure that the personal assets of the company’s members are fully protected by ensuring that all IBCs that are incorporated in Dominica are limited liability companies. Dominica International Business Companies must end with a word or abbreviation that means limited liability; for example, Société Anonyme (S.A.), Sociedad Anónima, Limited (Ltd.), Corporation (Corp.), Incorporated (Inc.) and GmbH.

Dominica IBCs present several solutions in resolving business and financial issues, and offer entrepreneurs the opportunity of increasing their wealth through progressive legislation as the business becomes increasingly closely knitted and competitive.

Back to top