A

ABC

Anti-Bribery and Corruption.

AEOI

Automatic Exchange of Information.

AML

Anti-Money Laundering.

Apostille

Following the 1961 Hague apostille convention (see Apostille convention over on Wikipedia), apostille was created as a way to simplify legalization of documents across borders. Some banks require documents to be not only Notarized but also have apostille affixed. Apostille takes longer to get and typically costs considerably more. A notary can usually help you get your documents apostilled.

Asset Protection

A structure whereby the UBO’s or UBOs’ assets are protected from hostile parties, such as creditors, bankruptcy, divorce, law suits, et cetera.

B

BC

Business Company is a company form available in the British Virgin Islands. Similar to IBC.

Bearer Shares

These are shares which are not registered with anyone or anywhere. Instead, the owner of the company is the person who hold (bears) the shares. Bearer shares are increasingly becoming a thing of the past, due to international pressure. Many jurisdictions that permit bearer shares now require that they be held on behalf of the shareholder with a custodian.

Bronze-Plaque Bank

See Shell Bank.

BVI

British Virgin Islands, a major offshore jurisdiction.

C

Certificate of Good Standing

A certificate issued by the company registrar of a jurisdiction to confirm that a company exists and is in good standing with local laws.

Certificate of Incorporation

A certificate issued by the company registrar of a jurisdiction to confirm that a company has been registered in that jurisdiction.

Certificate of Incumbency

A certificate issued by the company registrar of a jurisdiction which lists the members, partners, directors, and/or shareholders (as applicable) of that company.

Certified

See Notarization.

CFT

Counter Financing of Terrorism.

CGS

See Certificate of Good Standing.

CI

See Certificate of Incorporation or Certificate of Incumbency.

COI

See Certificate of Incorporation or Certificate of Incumbency.

CSL

Companies Special License. A company form in the Seychelles.

D

DD

See Due Diligence.

DTA

Double Taxation Avoidance agreement, also called DTC (Double Tax Convention) or DTT (Double Taxation Treaty), is an inter-governmental agreement to prevent double taxation. For example, if a resident of Jurisdiction A has a company in Jurisdiction B, he may be liable for tax in both jurisdiction. With a DTA, the tax rate is reduced or removed. DTAs rarely contain provisions for disclosure of information.

DTC

Double Taxation Convention. Same as DTA.

DTT

Double Taxation Treaty. Same as Double Taxation Agreement.

Due Diligence

A common practice whereby a company assesses you as a client before engaging in business. This is done to mitigate risks of fraud, money laundering, or other crime.

E

EDD

See Enhanced Due Diligence.

EOI

Exchange of Information.

Enhanced Due Diligence

See also Due Diligence. Enhanced Due Diligence (EDD) is performed on especially risky products, services, customers, and vendors. It is more thorough than Due Diligence.

Exempt company

A type of company legislation whereby companies are exempt from tax.

F

FIU

Financial Intelligence Unit.

Fixer

An agent in the offshore financial services sector, often used with negative connotation meaning to someone who through clandestine means performs offshore financial services for others, such as setting up fake identities and opening bank accounts under false, stolen, or bought identities.

Free Trade Zone

A designated area subject to different taxation and other legislation than the jurisdiction of which it is a part.

Free Zone

See Free Trade Zone.

FSC

Financial Services Commission.

FTZ

See Free Trade Zone.

FZ

Free Zone. See Free Trade Zone.

G

GBC

Global Business Company is the company form available in Mauritius. It is similar to private limited. There are two classes: GBC I and GBC II.

Gib

Gibraltar

H

Holding Company

A company that does not trade but instead only holds assets, capital, and/or shares of other companies.

I

IBA

International Banking Act. A non-resident, offshore banking legislation in many offshore jurisdictions, popular in the Caribbean.

IBC

International Business Company is the company form of choice in many, if not most, offshore jurisdiction. IBC is similar to private limited. Most IBCs are tax free but there are some notable exceptions, such as Barbados, where IBCs pay a nominal tax of a few percent. IBCs do usually not have access to DTAs.

IFC

International Financial Center.

Investment Company

A company whose purpose is to invest in other companies. Different from Holding Companies in that they effectively trade in the act of investing in companies.

J

JV

Joint Venture.

K

KYC

Know Your Customer. Another term for Due Diligence. See also Due Diligence.

L

LLC

Limited Life Company or Limited Liability Company.

LLP

Limited Liability Partnership. Partners of LLPs usually all have limited liability.

LP

Limited Partnership. LPs typically contain at least one General Partner, who is personally liable, and at least one Limited Partner, who is not personally liable.

M

N

NMV

New Manx Vehicle. A company form in Isle of Man, based on Business Company legislation in British Virgin Islands.

Nominee

A nominee is a person who acts on your behalf. There are three types of nominees: nominee shareholders, nominee directors, and nominee signatories. Nominee shareholders hold shares of a company and nominee directors act as directors, often used if the UBO does not want to appear on public record. Nominee signatories are bank account signatories, so that your name does not appear on bank records.

Notarization

Many banks and some OSPs ask for notarized (certified) copies of your passport, company documents, and other documents. These are copies which are certified by a qualified professional; usually a notary, lawyer, or senior bank staff. See also Apostille.

O

OBU

Offshore Banking Unit. An offshore banking legislation in Taiwan and some other jurisdictions.

OFC

Offshore Financial Center.

OSP

Short for Offshore Service Providers, these are companies that set up offshore companies and introduce you to offshore banks.

P

PEP

Politically Exposed Person, an indicator for risk of money laundering.

Permanent Traveller

A natural person who does not reside in any jurisdiction for a long enough period to be deemed tax resident, thus avoiding tax liability.

PT

See Permanent Traveller.

Q

QI

See Qualified Introducer.

Qualified Introducer

A concept used by some banks to designate and qualify introducers who may refer clients to the bank.

R

Registered Agent

This is often your OSP when you are forming your offshore company. The registered agent pays the annual fees to the government on your behalf and provides your company with its registered address, which is your company’s local address in the country of incorporation.

Reputability

A jurisdiction’s reputation, as assessed based on how it is perceived internationally.

Ring Fencing

An act whereby a jurisdiction creates a separate and segregated company (or trust, foundation, et c.) and/or taxation legislation for non-resident companies. Highly criticized.

S

Shell Bank

A bank which is incorporated in one jurisdiction, typically with very lax banking regulation, but operated (primarily or fully) from another jurisdiction.

Shelf Company
A dormant company, which may or may not have been active, for sale by an OSP for immediate use.Shell CompanyA company with none or effectively no trading or holding activities. Often just used as an invoicing company between other companies within a conglomerate or group of companies, or as the owner of assets.Shoe-Box BankA bank which is incorporated in one jurisdiction, typically with very lax banking regulation, but operated (primarily or fully) from another jurisdiction.SPCSingle Person Company, a company form in Bahrain.SPICASpecial Purpose International Companies Act. SPIC is a type of company in Samoa. Has similarities to both trusts and companies.StructureA combination of one or more legal entities.SVGSaint Vincent and the Grenadines, a minor offshore jurisdiction.

T

Tax AvoidanceThe act of avoiding tax through legal means.Tax EvasionThe (typically illegal) act of evading taxation.Tax HavenA jurisdiction with low or no taxes, or taxation legislation specifically designed to reduce tax.TCITurks and Caicos Islands, a medium-sized offshore jurisdiction.TIEATax Information Exchange Agreement, is an inter-governmental agreement for either party to disclose otherwise confidential information.Trading CompanyA company that trades. See also Holding Company and Investment Company.

U

UBOUltimate beneficial owner, a term used when assessing who ultimately owns a legal entity. In for example a Nominee ownership structure, you are the UBO.

V

VCVenture capital.

W

WLLWith Limited Liability, a company type in Bahrain. Comparable to LLC.