Overview of International Business Corporations
International promoters sell international business corporations (IBC's) to safeguard wealth from lawsuits. But an IBC is a bad choice when you want solid protection. An IBC is a foreign corporation exempt from taxation in that country because it is owned by non-residents. An IBC otherwise compares to a U.S. corporation.
An IBC can privatize your international wealth; but, privacy is not asset protection. When your creditor discovers money sheltered in an international company, they can have a U.S. court compel you to transfer your IBC ownership shares to your creditor. Or, the court can force you to liquidate your IBC and repatriate its assets for the benefit of your creditor. Courts won't believe that you gifted your money to the IBC, or that your money somehow disappeared. For solid asset protection, your entity must be specifically designed for this purpose. That entity would not be an IBC. IBC promoters should not sell IBC's for protection.
Nor should you mistakenly believe that you can hide money in a privacy haven bank account. It's poor protection. Your judgment creditor can force you to disclose your international assets. If you lie, you commit perjury. Disclose your international assets, and a U.S. court can order you to repatriate your money to your creditor. So a foreign bank account — whether in your own name or in the name of an IBC — is not creditor-protected. In either instance, the money is under your control. You can comply with a court's repatriation and turnover order, or be held in contempt. Never rely on an IBC when you want protection. The IBC can play some secondary role in your international plan, but it cannot be your primary international firewall.
Yes, You Can Lose Everything!
You may think that your wealth is safe and that you don't need protection. But don't delude yourself and accept reality — for every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!