All About IBC's in St. Lucia
What is an IBC?
An IBC is an offshore company formed under the laws of some jurisdictions as a tax neutral company which is usually limited in terms of the activities it may conduct.
They are privy to tax relief as long as the business is from outside the country. There is a high confidentiality index on such companies, emphasizing anonymity for the shareholders, owners, and members. The people associated with the company can be from anywhere in the world and can do business with whomever they please as long as they keep the home country of the incorporated company out of their sights.
In 1999, St Lucia enacted a modern piece of offshore financial legislation, the International Business Companies Act, and fashioned it in such a way that it provides utmost flexibility and advantages for the client, while at the same time preserving the integrity of the Island's industry. Let’s take a look at those advantages and some changes which are to take place end of June, 2021, which will definitely affect IBC held real estate - whether selling or buying real estate in St. Lucia.
IBC's may be registered in St. Lucia under the Act by: Incorporation, Continuation, Merger or Consolidation.
The following are the key features of the Act:
- All companies must have a Registered Agent and a Registered Office. The office of the Registered Agent is the Registered Office.
- The Act provides for confidentiality of Beneficial Owners, Shareholders, Directors and Officers.
- Only the registered agent and the address of the registered office are public records.
- Disclosure only possible to specified authorities in accordance with specific legislation.
- Great flexibility and control of the operations of the IBC. The shareholders can limit the powers of the directors through the memorandum and articles of Association, or through a unanimous shareholder agreement.
- The annual registration fee is US $300. There are penalties for late payment or default.
- There is no requirement for local directors and meetings of directors may be held anywhere.
- All Registered Agents are regulated to ensure professional efficient service.
- Allows for shares with and without par value.
- Makes provision for tax concessions for any specially qualified person working for the IBC in St. Lucia.
The following changes will apply to IBCs incorporated after January 1, 2019:
- They will no longer be able to elect to be exempt from income tax or to be liable to income tax on chargeable income at 1%.
- IBCs are now deemed resident and subject to the provisions of the Income Tax Act.
- Filing of annual tax returns is required.
- Provisions of the Act relating to stamp duties, withholding tax and income tax have been amended.
- Payment of Income tax, Stamp Duties and Withholding taxes will apply with some limited exceptions.
- Will be subject to the Aliens (Licensing) Act.
- Will not be restricted from doing business with residents and may own immovable property.
- IBCs registered prior to 2019 will continue to benefit from the pre-amendment provisions of the Act until June 30, 2021.
- IBCs which elected to pay tax at 1% will continue to file an annual tax return.
- All IBCs are required to file annual returns (Shareholders, Directors and Beneficial Owners) and unaudited financial statements but only with the Registered Agent.
- Registers of Shareholders, Directors and Beneficial Owners are required to be kept at the registered office.
- The Registered Agent is required to report by providing a list of companies in default of any of the filing requirements.
- There are penalties for failure to supply the returns to the Registered Agent.
As a real estate owner (who owns property in an IBC), you will have to now take into account Property Trasnfer Tax upon the sale of your property. If you are thinking of selling, reach out to one of our agents who will guide you through the process and expected real estate selling fees.