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Starting an Anguilla LLC in 2021: Incorporation and Compliance

Content Team8 minute read20 Oct 2021

Anguilla LLC combines the liability protection of a corporate structure with favorable taxation of a partnership. For this, international investors have long held the corporate vehicle in high favor for its mileage in offshore incorporation.

Setting one up is relatively straightforward with minimal statutory requirements. A quick application to the Anguillian Register and your LLC will be set and ready for business. But knowing the steps in between will help accelerate the process that much faster.

This article contains guidance on incorporation and other key facts on corporate details and compliance to help you along the way.

1. Anguilla LLC and its main uses

All Anguilla LLCs are under the governance of the Limited Liability Company Act (LLC Act) 2014 which in itself is based on the Wyoming LLC Ordinance.

It retrospectively aligns with corporate governance laws typically made compliant for LLCs in the United States but has several changes to suit modern-day investors. Hallmark of which is the provision allowing for the perpetual existence of an LLC in Anguilla or otherwise as stated in its bylaws.

It’s commonly used for conventional trading purposes but possibilities also exist in other areas such as family or estate planning, asset protection, and tax structuring. In these regards, an Anguilla International Business Company (IBC) also offers you the same level of flexibility as a non-trading variant.

Since an LLC is a flow-through entity, profits and losses from the LLC are passed through to the owners themselves. Distribution of which will be based on their individual interest rates or contributions.

This detail is mentioned along with other administrative duties and rights in the operating agreement. An operating agreement acts as the governing bylaws for all mentioned parties in the LLC.

2. Reasons to incorporate an Anguilla LLC

2.1. Limited liability protection

An Anguilla LLC offers limited liability protection for its members. Your personal assets are safeguarded from all liabilities incurred from the business itself, i.e., legal litigation, government seizures, insolvency, etc.

In terms of powers, any LLC in Anguilla can exercise and take on rights similar to a normal person. It can enter into contracts, partake in legal proceedings and operate as a commercial entity given that all relevant licenses have been obtained.

2.2. Favorable taxation

Anguilla stands out as an offshore jurisdiction not just for its corporate governance system but also for the solidarity it shows as a true tax-free environment.

LLC businesses that don’t generate any income domestically are exempted from any direct taxation such as estate tax, income tax, corporate tax, gift tax, duty tax, stamp tax and capital gains tax.

Non-resident members within an LLC are still subject to domestic taxation within their own country of residence. US-based members will have to comply with FATCA and FBAR and report their fiscal presence in every offshore territory for tax collecting purposes.

2.3. High confidentiality

Anguilla takes its corporate privacy seriously, up to the point where civil and criminal penalties are in place to deter prying-eyes from its corporate entities.

As an owner of an LLC, you can enjoy anonymity as there are no public records of shareholders or directors. Instead, they are kept at the company’s registered office which doesn’t have to be in Anguilla. There’s also a database called ACORN containing names of companies registered within Anguilla for monitoring purposes.

There’s no annual reporting requirements for an LLC. However, you must devise a proper recording procedure and retain the records in the registered office. It is advisable to make the process of retrieval quick and simple for easier compliance.

For absolute anonymity, you can choose to opt for a nominee director service which can provide stand-in personnel with directorial powers and rights to conduct business operations on your behalf.

2.4. Flexible management structure

It’s mandatory to have at least one Member to set forth the company into existence. You can start an LLC as a single founding Member and operate as a sole proprietorship. Or you can corral additional joiners to form a professional group.

Additionally, members can either be real people or corporate entities depending on your purpose of incorporation. They’re also not required to be domiciled in Anguilla.

2.5. Economic interest

Found within the Limited Liability Companies Ordinance (Amendment) 2014 is a provision that allows for the segregated transference of economic interest apart from membership interest. This is different from a membership share because an economic interest does not entitle the holder to any control or voting rights.

Members with economic interests can enjoy rights to distribution without having to partake in rigid and often stressful decision making in business operations. These members are commonly known as “silent members”.

3. Incorporation procedure

3.1. Choose a name

You must adhere to regulations concerning the naming scheme of an Anguilla LLC. Pursuant to the LLC act, the company name must contain the constituents to indicate that it is an LLC. Specifically, the name must contain these words “Limited Liability Company” or the abbreviation thereof “LLC” or “L.L.C”.

The company name shall not be a duplicate in the sense that it bears too much resemblance to another preexisting name of a corporate entity or person. However, usage is still possible with written approval by the other party granting explicit consent to using their name partially or fully.

A clause also states that the company name must not violate any other active laws within Anguilla and must conform to the regulations made by the Governor. With this being said, you should also know that there’s interplay between the LLC Ordinance and other regulations in Anguilla.

The Companies Act 2000 which is another principal corporate governance legislation prohibits the mentioning of Her Majesty or the Royal Family. In relation to this, the company name must also not suggest ties to governmental agencies pertaining to the United Kingdom.

Additionally, an LLC conducting business directly “in or from within” Anguilla may not have names that contain words like banking, insurance, building society, chamber of commerce, foundation, etc., without approval from the relevant authorities.

3.2. Draft LLC agreement

An LLC agreement is a corporate instrument that acts as bylaws for your LLC. Aside from providing details into the power dynamic between members, it also contains provisions over matters, among others, such as

  • Quorum for meetings
  • Designation of officers, etc.
  • Indemnity
  • Signing of documents
  • Voting rights

Note that members within your LLC can enter this agreement before, during and after signing the articles of formation upon which it will come into full force. Nevertheless, an LLC agreement is required to be present as a part of the incorporation process.

3.3. Register your LLC

The process to registering an Anguilla company is relatively fast and simple. Collect preliminary information and file them with the articles of formation as prescribed and submit it to the Registrar of Anguilla. The following checklist contains the core fundamentals of the articles of formation:

  • The name of your LLC
  • The address of the first registered office
  • The name of the registered agent
  • The date of dissolution (if stated)
  • The date of formation
  • Other unanimous decisions made by the members

By law, every LLCs in Anguilla needs an intermediary to facilitate the filing process. The designation for such a role is called a “registered agent”.

In terms of duties, a licensed registered agent will receive any legal documents sent from the authorities to your LLC. This ambit also extends to filing annual returns or other services as requested and paid for by the LLC.

3.4. Open a bank account

The Anguilla banking system is overall business-friendly with reasonable fees and account opening procedures. Its three most prolific domestic banks are Scotiabank Anguilla Limited, National Commercial Bank of Anguilla Limited, and FirstCaribbean International Bank (Barbados).

You can walk right in any of them and be instructed from start to finish on how to open an account. However, each of them might have specific guidelines and requirements on wire transfer, credits and debits, and taking out loans.

Before entering uncharted waters, you should seek professional counseling from a competent Anguillian law firm. Alternatively, opening an offshore bank account in another jurisdiction is also worth considering.

4. Anguilla economic substance requirements

Despite existing negative consensus on offshore financial centers, Anguilla has made extensive legislative efforts to ensure its fiscal presence remains in a positive light.

On this note, EU’s finance ministers have recently greenlit the decision to soon strike Anguilla off of the tax haven bloc list in recognition of its progressive efforts in complying with international regulations. The latest of which is the adoption of the economic substance reporting requirements into its LLC Act in 2019.

Under this amendment, all LLCs with relevant activities must comply with Anguilla Economic Substance Requirement to assist in cross-examination between different regulatory agencies. This regime was brought about due to the rising cases of harmful tax practices which is an indictment on the transparency of the global financial system.

 Want to know if your LLC falls within compliance? Try out our new Economic Substance Tool !

5. Conclusion

All things considered, Anguilla is reforming its legislative apparatus to make the transition to becoming a more “onshore” jurisdiction. This reinvention may bring about renewed fascination from investors that could propel the country into unprecedented growth.

Need help with setting up your LLC in Anguilla? Feel free to drop us a message or contact us via service@bbcincorp.com.

 

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