What is a Hybrid Company?

A Hybrid company is a form of International Business Company (an IBC) which combines certain features of an IBC and a Trust, and is especially useful to persons resident in civil law countries that do not recognize Trusts. As with Trusts, Hybrid structures may be useful for asset planning (including estate tax planning) or for specific one- off projects.

 

As with IBCs Hybrids are exempt from taxation in St. Vincent and are given a 25 year tax exemption certificate by the registrar upon formation.

 

A Hybrid Company has two classes of members; those whose liabilities are limited by shares and those whose liabilities are limited by guarantee. The Guarantee Members agree to contribute a set amount (usually USD 100) in the event of a winding up or for a certain period thereafter. The Shareholder members typically have all of the voting rights in the Hybrid Company, and possibly the right to a fixed annual dividend, but have no rights to receive any other distribution of income or capital by the Company during its lifetime. The Guarantee Members may receive distributions of income or capital at the discretion of the Directors.

 

Advantages

  • A Hybrid Company can be used as an alternative to a Trust.
  • It provides the alternative of having Shareholders and Guarantee Members within the same legal entity.