The International Companies Act 2009 (hereinafter the Law) governs the establishment, eligible operations, and termination of their operations. This law provides registration within one business day, one shareholder, one director, limited liability, confidentiality, and tax-free income.

Background

Tuvalu is a state of nine islands located in the western part of the Pacific Ocean. Located halfway between Australia and Hawaii, its population is mostly Polynesian (96%).

It was formerly called the Ellis Islands. After more than 80 years as a British colony, independence was achieved in 1978, but it remains part of the British Commonwealth.

His political system is described as a non-partisan parliamentary democracy under a constitutional monarchy. It has a democratically elected unicameral parliament and a prime minister. Its monarch is Queen Elizabeth II of England.

The constitutional system is based on English common law. Although its principal language is Tuvalu, English is the second official language.

Benefits of IBC in Tuvalu

Tuvalu International Business Company (IBC) benefits from the following:

• Full foreign membership: all shareholders can be foreigners.

• Tax-Free: Until income is earned in Tuvalu, all income is tax-free. However, US taxpayers and others who pay taxes on global income must report all income to their governments.

• Confidentiality: The names of shareholders are not included in any public records.

• Limited Liability: A shareholder’s liability is limited to his or her unpaid share capital contribution.

• Limit of Personal Liability: Shareholders, directors, and officers are not personally liable for debts or default of the company unless it is due to their own actions or behavior.

• Fast Registration: An IBC can be established in one business day.

• One shareholder / one director: only one shareholder and director are required and can be the same person for complete control.

• No minimum capital: no minimum share capital is required.

• English: after 80 years of existence of the British colony, English has become its second official language.

Legal information

The IBC must choose a company name that is different from the name of all other legal entities in Tuvalu. Since IBC offers limited liability and limits the number of shareholders, the company name must end with Limited or its abbreviation LTD.

Limited commercial activity

IBCs can do any business around the world. However, they cannot do business with the residents. In addition, they cannot own real estate in Tuvalu. Separate licenses must be obtained to conduct business as a bank, insurance, trust, or reinsurance.

Registration of private companies

Private companies in Tuvalu are called their own. To register, private companies must issue a Memorandum limiting the maximum number of shareholders to 20. Transfer of shares must be limited. No shares or promissory notes can be sold to the public. Inviting the public to contribute to the IBC is prohibited. Directors must be shareholders. Only one class of shares can be issued.

The registration

The statement is submitted to the International Register of Companies of Tuvalu.

To register, you must provide the following documents:

• Application for education;

• Memorandum of Association; 

• Charter.

Upon completing the filing of the application and memorandum, the registration will issue a Certificate of Registration.

Memorandum of Association

The memorandum must contain the following information:

• The name of the company;

• Legal office address;

• The size of the authorized capital;

• Declaration that it is a private (private) company;

• Declaration of limited liability of shareholders;

• The purpose of the company;

• Number of directors.

Personal responsibility

No director, member (shareholder), officer, or agent is responsible for default on obligations, obligations, or debts of the company unless he or she is responsible for his or her actions or behavior.

Shareholders

Only one shareholder is required to create an IBC. Shareholders can be citizens of any other country and reside anywhere in the world. Only one class of shares can be issued.

Directors

A minimum of one director is required to manage an IBC. The directors can be residents and citizens of any country living anywhere. The promotion of officers is voluntary as they are not obligated.

Registered agent and office

Each IBC company must appoint a local registered agent and have a local office address, which may be the registered agent’s office.

The registered agent must maintain a register of directors and a register of shares at the registered office, which are confidential and not publicly reviewed or held by the government.

Tax

IBCs do not pay any taxes. No corporate tax, no income tax, no income tax, or stamp duty. These exclusions apply as long as the IBC only earns income from international business activities and not locally.

Note. US taxpayers and all other taxpayers on their worldwide income must report all income to their government’s tax authorities. IBC companies are not required to file any financial statements or tax returns. No audit is required.

Minimum capital

There is no minimum authorized capital. IBC can be created and registered within one business day. Ready-made companies can be purchased in Tuvalu.