Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands

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Corporation Services Limited - Turks & Caicos company formation and management


LLC's - TCI Limited Life Companies

LLC's were first introduced into TCI law by the Companies Amendment Ordinance of 1994.  They are effectively hybrids between partnerships and companies. They afford limited liability to members and are treated as partnerships in certain countries for tax purposes.  

This means that LLC's are generally tax-transparent with income/dividend distributions being attributed to the members without the imposition of corporation tax. This is achieved principally by limiting the life-span of the entity and thereby avoiding the characteristic of perpetual existence, which is a principal indicator of corporate existence.

Standard exempted companies (IBC's) can apply to be registered as LLC's upon application to the Registrar of Companies by annexing a Special Resolution limiting the life of the company to 50 years and changing the company's name to include the suffix "LLC". This is a simple and inexpensive process if you have an existing IBC which you wish to continue into the islands in order to change its nature to that of an LLC. Feel free to contact us if you would like assistance wi5th a restructuring of this sort and we will be happy to provide you with a breakdown of the costs and timeframes involved.

How are they used?

Several multinational companies have utilized TCI LLC's as a vehicle to raise capital from US investors by the issuance of preference shares. Where this is done the proceeds of the sale of the LLC's preference shares are then lent to the issuer's (on-shore) parent company. Because the parent company has effectively borrowed monies from its TCI subsidiary, it can treat the entire of the monies so raised as an ordinary tax-deductible loan thereby significantly reducing its overall tax exposure. Furthermore, as noted above, because LLC's can be classified as partnerships the TCI subsidiary can avoid withholding taxes on the interest payments. By contrast, for normal US tax purposes if preference shares had been issued directly by the multinational, it could only deduct the interest costs of the preference share offering but not the dividends paid on the stock.

In a nutshell, parent companies can by using TCI LLC's, deduct "dividends" on preferred shares by treating such payments as interest for tax purposes. By reducing exposure to taxation in this way the relevant multinational can build its capital reserves more rapidly than would otherwise be possible.

Due to their flexibility of form, it is also possible to use TCI LLC's to secure certain asset protection benefits, by separating the management of the LLC from the beneficial ownership. This can create interesting possibilities in a private client setting when coupled with the tax efficiencies mentioned above.

We would be delighted to discuss the other potential benefits with individuals and/or their tax advisors and will provide further more detailed information on the possibilities afforded by TCI LLC's. Should this area be of interest to you, send us a brief email requesting further information or outlining your current situation and objectives and we will get back to you as soon as we can.
 

Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands


Contact Details:


1, Caribbean Place
Leeward Highway,
Providenciales
Turks & Caicos Islands
British West Indies

Tel: 649-946-4344
Fax: 649-946-2758

Email

 

 

 
Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands

 

Why to consider locating
your exempt LLC in TCI:

  • Need only 2 members;
  • Flexible management structure;
  • No nationality restrictions;
  • Capital may be in any currency;
  • Exempted from future TCI taxation (if any) for 20 years;
  • Minimal reporting req's;
  • Enhanced privacy;
  • Not req'd to hold AGMs;
  • Rapid set-up at reasonable cost.
     
Corporation Services Limited - Turks & Caicos company formation and management
Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands


CSL Group:


 

Corporation Services Limited - Turks & Caicos company formation and management

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