A Hybrid is a company limited by guarantee.  It is said to be a hybrid because it partakes of the characteristics both of an IBC and a Trust.  Such a structure could allow one to legitimately compound earnings offshore, on a tax-free basis, until funds are repatriated onshore.  They provide a very flexible estate planning vehicle and have significant tax advantages for citizens and residents of the US, UK and Canada, because of the high degree of asset protection that they provide.

In a Hybrid, the initiators of the formation of the structure are Guarantors, who have liabilites of no more than US$100 whether from corporate expenditures or winding up fees. T he Guarantors are never shareholders and as such do not experience taxable events when the Hybrid earns income.  The shareholders are offshore entities as are the Directors.

A guarantor has no voting rights and is not entitled to any dividends. Recent moves to curtail the flexibility of trusts on the North America continent, could focus considerable attention on Hybrids as useful tools in offshore asset protection.  Canadian taxpayers, for example, may avoid the Foreign Accrual Property Income (FAPI) rules by forming a Hybrid.