Contemplating forming an offshore IBC, but unfamiliar with some of the terms used? At SFM, our goal is to make the offshore company setup process as straightforward as possible, so that your offshore IBC can be launched without stress. That’s why we’ve created a glossary to demystify the offshore company setup jargon, from the meaning of offshore IBC to the role of a nominee director. And should you have any further questions about your offshore IBC, please don’t hesitate to contact us – we are at your service.

Articles of Association: The articles of association of a company, often simply referred to as the articles, are the regulations governing the relationships between the shareholders and directors of the company, and are a requirement for the establishment of a company.

By Laws : synonym to Memorandum and Articles of Association.

Certificate of incorporation: A certificate of incorporation is a legal document relating to the formation of a company or corporation.

Director: A director is the person responsible for determining company policy and thus also for signing any business contracts, account opening forms etc. Directors are usually elected by the shareholders, but sometimes are appointed by resolution. A company can have one or many directors. A director can be an individual or a company.

IBC: An international business company or international business corporation (IBC) is an offshore company formed under the laws of some jurisdictions as a tax-free company. It is not permitted to engage in business within the jurisdiction in which it is incorporated.

Memorandum of Association: The memorandum of association of a company, often simply called the memorandum, is the document that governs the relationship between the company and the outside world. It is one of the documents required to incorporate a company.

Nominee Director: Nominee directors are appointed mainly for confidentiality reasons. For instance, a nominee director will be elected if you do not wish your name to appear on a company business contract, or to be included when names of company directors appear in the public registry (for example, Panama).
Upon the appointment of a nominee director, a nominee service agreement will be signed between the client and the nominee. It will guarantee to the client that the nominee can only act or sign documents at the client's request. It also guarantees to the nominee that he/she has no responsibility.

Nominee Shareholder: Nominee shareholders are mainly appointed in order to provide additional confidentiality.
Upon the appointment of a nominee shareholder, a nominee service agreement (declaration of trust) will be signed between the client and the nominee. It will guarantee to the client that the nominee can only act or sign documents at the client's request. It also guarantees to the nominee that he/she has no responsibility.

Offshore company: An offshore company is a tax-free company which is not permitted to engage in business within the jurisdiction in which it is incorporated. Offshore companies are sometimes known as non-resident companies.

Offshore Formation or offshore company setup: This is the process of incorporating an offshore company.

Offshore bank: An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages. These advantages typically include:

• greater privacy
• low or no taxation (i.e. tax havens)
• easy access to deposits (at least in terms of regulation)
• protection against local political or financial instability

Registered agent: The registered agent is the entity that incorporates and manages the offshore company.

Registered Office : This is the official address of the company, to which official documents are sent and legal notices received. It is normal for the registration agent to provide a registered office. A company may have other business and correspondence addresses.

Secretary: A company secretary is a senior position, normally of managerial status or above, in a private company or public organization. Some jurisdictions (e.g. Panama) require a secretary to be appointed.

Shareholder: A shareholder is a person who owns a company, through a share certificate. A company can be owned by one or by many shareholders. The shareholder can be an individual or a company.

Shelf Company: This is a company that has already been incorporated and that has been put on a "shelf" until it finds an owner.

Statutory Records : a company is obliged to maintain registers setting out certain information about the company. The mandatory records vary from jurisdiction to jurisdiction, as does the level of public access to the information contained in the records. Many jurisdictions require that the records are kept within the jurisdiction in which the company is incorporated. The records required may include minutes of meetings, registers members, directors, officers and charges.

Tax Haven: A tax haven is a place where certain taxes are levied at a low rate or not at all.

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