The formation of an offshore company is a relatively simple and economical process. The constitutional process of an offshore company, like IBC, begins when the agent, presents to the Registrar the two documents necessary for its creation. This is the Memorandum of Association and Articles of Association. The Memorandum of Association (MOA) contains company’s basic data: its name, its registered office, or the name of its local representative or resident agent. The Articles of Association (AOA) defines the basic operating structure of the new company. They regulate matters such as the power of directors, the hosting of annual meetings or the custody of accounts and minutes. Once the registration process is completed, which usually lasts between 24 and 72 hours, the company registrar issues the Certificate of Incorporation, which validates the creation of the new company. The establishing process of an offshore company ends here; However, it is necessary to complete another series of steps so that the company can start operating. The constitution of an offshore company can be carried out by means of nominative shares, that is, they have the name of the shareholder printed on them, or bearer shares, although most of the jurisdictions are eliminating them and many banks do not accept them. These are freely transferable and any person who owns them will be recognized as the rightful owner of the company. It is possible to keep the identity of its owner secret. Another frequent option is the use of a so-called fiduciary shareholder. It may be any trusted person by the owner, but it is normal for the function to be performed by a member of the creation team or a local lawyer or professional designated for it. This figure is used to keep the identity of the real owner confidential in cases where it is not desired to use bearer shares, its use has limitations or is not permitted. This form of incorporation of an offshore company requires the signing of an additional contract called a declaration of trust, whereby the fiduciary shareholder recognizes that ownership and rights over the company and its income belongs to the real owner.
Fiduciary directors in an offshore company
It would be useless to hide the identity of the shareholders in the constitution of an offshore company, if these later exercise as directors. That is why you can also use a fiduciary director. It is a person who figures in place of the real owner. The fiduciary director can perform executive functions (sign contracts, resolutions, etc.) In the second case, company operations are handled by the real owner. To do so, a power of attorney will be drafted, which will empower him to carry out all the company operations. In either case, the actual owner must sign an indemnity agreement with the fiduciary, which not only disconnects to this of all liability in relation to the company operations, but also establishes the obligation to be compensated in case of economic, legal or other damages due to the management of the company by the owner. On the other hand, the fiduciary director shall sign a letter of resignation, without a date, which shall be given to the owner of the company.