Offshore Asset Protection

Summary: There are a number of ways businesses and individuals can protect themselves and their assets offshore; this article examines the top 5 offshore asset protection instruments and how you can potentially benefit from their usage.

In general terms offshore asset protection is all about protecting your property from potential litigation and legally securing your property against excessive or restrictive taxation - both during your life and after your death.

There are a number of ways businesses and individuals can protect themselves and their assets offshore; this article examines the top 5 offshore asset protection instruments and how you can potentially benefit from their usage.

1) An Offshore Trust

An offshore trust is a legal agreement enabling the settlor, who establishes the trust and places his assets into trust, to put distance between himself and his assets which makes it far harder for someone to come along and try and sue for or take control of the assets.

A trust can often be used to legally reduce an individual’s death taxation liability.  In this instance the beneficiaries of the trust will be the settlor’s heirs.  Alternatively the beneficiaries can ‘benefit’ from profits generated by the assets held in trust on an ongoing basis.  A trustee manages the trust and is responsible for ensuring it is operated and maintained properly, legally and in accordance with the settlor’s wishes as defined upon the establishment of the trust.

By establishing the trust in an offshore jurisdiction where added layers of privacy and security are employed, the settlor adds an extra layer of protection for his assets.

If you’re concerned about anything from lawsuits to death taxation and inheritance tax for example, an offshore trust might be the asset protection instrument best designed to suit your requirements.

2) Offshore Company Formation

In this day and age many of us are increasingly at the mercy of our ever more inquisitive and invasive governments who insist upon ever tighter restrictions and control.  When it comes to running a business however, restrictions and control mean lack of freedom to grow, prosper, develop and profit.

By incorporating a company offshore it is sometimes possible to protect the privacy of your business activities from nosey governments, to remove limitations placed upon you by reporting requirements and to legally reduce the amount of taxation you have to pay.  Furthermore, by moving business activities offshore you can add an extra layer of security to your company and protect yourself from lawsuits and litigation.

Incorporating an offshore IBC needn’t be expensive or difficult.  There are professional companies out there who can advise and assist you.  Make sure you pick a jurisdiction that fulfils your requirements and is economically and politically stable and ensure any company you employ to assist with the incorporation process is sufficiently briefed and able to answer all your questions and also able to fulfil all your offshore company formation requirements.

3) Offshore Merchant Account

If all or part of your company’s business is transacted online it’s now possible to create offshore merchant accounts for handling credit card payments.  You’re granted better privacy and security offshore and it’s sometimes possible to secure more flexible or attractive terms with your offshore merchant account provider as well especially if your account is highly active.

4) Offshore Bank Account

If you incorporate offshore and/or have an offshore merchant account, chances are you’ll probably require an offshore bank account as well.  The incorporation companies out there often offer an entire package - offshore company formation, bank account and merchant account.  You might want to split the instruments across dual or multiple jurisdictions depending on your exact requirements for privacy, security, flexibility, stability and protection, so ensure you receive best advice from any intermediary and that you are ultimately comfortable with the solution they suggest.

The bottom line when it comes to your money is that you need to be sure your offshore bank account is held in an economically and politically stable jurisdiction and provided by a strong and reputable provider.

5) Offshore Hosting

Every serious company in this day and age has a web presence and before you dismiss offshore hosting out of hand as dubious, risky and the stuff of hackers, please consider the fact that not only are there some excellent hosting providers out there offering secure, highly available and competitive packages but that the US and UK in particular are tightening control on all internet business, traffic and presence.  The governments of these countries want to know more and more about what internet businesses are up to and they want to enforce tighter control restrictions on anyone with an internet presence.

By moving your hosting offshore to a legitimate company operating from a secure jurisdiction you will be giving yourself far more opportunity for freedom.

So, as you can see there are many offshore instruments available that enable individuals and business owners to maximise their privacy, protect their assets and ensure maximum productivity free from control and invasion of privacy.  If you would like to know more about any of the structures mentioned in this article please complete our offshore advice form with your requirements and we’ll be in touch.

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