A Grenada International Business Company (IBC) is a flexible separate legal entity. Depending upon the members’ wishes, an IBC can be a company, corporation, or a partnership. Foreigners can own all of the shares in an IBC. One can engage in Grenada banking services on the name of the corporation as well.
The International Companies Act of 2002 governs the creation, activities, and dissolution of an IBC.
Background
Grenada is a Caribbean island country consisting of seven islands including the largest island of Grenada. It is located near Venezuela and Trinidad.
The French originally colonized the islands in 1650 until 1763 when it was ceded to the British. It remained a British Territory until granted independence in 1974. Its political system is described as a parliamentary democracy under constitutional monarchy with England’s Queen Elizabeth II as its monarch. It has an elected parliament consisting of a house of representatives and a senate with a prime minister.
International Business Company (IBC) Benefits
A Grenada International Business Company (IBC) obtains these benefits:
• Foreign Ownership: All of the shares in an IBC can be owned by foreigners.
• Totally Tax Exempt: As long as no income is earned inside Grenada, all of the income by an IBC is exempt from all taxes. However, U.S. citizens and others paying taxes on global income are required to report all income to their tax officials.
• Limited Liability: Shareholders’ liability is limited to their share capital contributions.
• One Shareholder: Only one shareholder is required in order to incorporate.
• One Director: Only one director is required to incorporate. The sole shareholder can become its only director for total control of the IBC.
• No Minimum Share Capital: There is no requirement for a minimum authorized share capital.
• No Audits: The government does not require filings of audited accounts.
• No Meetings: There are no requirements for annual general shareholders’ meetings or directors’ meetings.
• Privacy: The shareholders’ names are not part of any public records.
• English: As a former British Colony, Grenada’s official language is English.
Grenada International Business Company (IBC) Name
Company names should never be the same or similar to other company names in Grenada.
Since an IBC is also a limited liability company, its company name should end with the words “Limited Liability” or its abbreviation “LLC”. However, because of the flexibility to determine the type of legal entity, IBC’s can also choose names endings with “Corporation” or “Incorporated”; or their abbreviation “Corp.” or “Inc.”.
Company names must never use terms meant only for licensed companies such as a bank, building society, insurance, or fund management without a license.
Registration
An IBC incorporates when the Registrar issues a Certificate of Incorporation with a registration number.
Prior to approval, the applicant files a Memorandum and Articles of Association with the Registrar.
The Articles of Association describe the management of the company along with duties and rights of the directors, officers, and members (or shareholders). How the company dissolution process works is also included.
The Memorandum includes the name of the company, its purpose, and authorized share capital.
The Bylaws are the internal rules and regulations for the day to day management, but are not filed with the Registrar.
Limited Liability
IBC shareholders’ liability is limited to their contribution to the share capital.
Directors
Only one director is required for incorporation. Directors can be natural persons or legal entities and do not have to reside in Grenada.
The directors (if more than one) often create a Board of Directors with uneven membership to avoid tie votes on resolutions. Management is either in the control of a sole director or a Board of Directors.Shareholders
Only one shareholder is required to incorporate. Shareholders can reside and be a citizen of any country. While a register of the shareholder’s names and details must be maintained at the registered office, they are not part of the public records nor filed with the Registrar.
Shares can be issued in one share of par value or no par value. Shares may be issued as preference shares, redeemable, or registered with or without the right to vote. Bearer shares are not permitted.
Share Capital
While a typical authorized share capital is $50,000 USD, there is no required minimum authorized share capital.
Registered Agent, Office and Officer
Every IBC must appoint a licensed local registered agent who incorporates the IBC with the Registrar. In addition, the registered agent must maintain all documents and files and acts as the subscriber for the first share for the purpose of incorporation.
IBC’s must also have a local registered office and appoint a secretary. The company secretary can either be a natural person or a company.
Annual Meetings
IBC’s are not required to hold annual meetings for its members, shareholders, or directors. If they do hold meetings, they may take place in other countries. In addition meetings can be conducted by electronic methods as long as all qualified participants receive prior notice of the meetings day and time.
Audits and Accounting
IBC’s are not required to file annual records or financial statements. Audits are not required. However, they are required to maintain financial records.
Taxes
Non-resident companies like an IBC generating total income from outside of Grenada owe no taxes. Both the IBC and the shareholders are exempt from all taxes including: corporate tax, income tax, withholding taxes, dividends tax, interest tax, capital gains tax, transfer tax, gift tax, inheritance, tax and estate taxes. Grenada guarantees these tax exemptions for IBC’s for at least 20 years from the date of incorporation.
However, United States taxpayers along with residents of other countries taxing worldwide income must notify their governments of all earned income.
Public Records
While all filings with the Registrar can be accessed by the public, the shareholders’ names are never part of the public records.
Conclusion
A Grenada International Business Company (IBC) obtains these benefits: total foreign ownership, no taxation, privacy for shareholders, limited liability, one shareholder, one director, no minimum authorized share capital, no required audits, no required meetings, and English is this former British Colony’s official language.
