Owning an offshore company can offer many advantages. This applies to anyone looking to expand their business overseas, protect their assets, and benefit from favorable tax laws in another country with more accommodating jurisdictions. Before you create an offshore account, do some research. Speak to expert advisers in both jurisdictions. This will insure you understand all gained financial and legal benefits, as well as potential problems to avoid.
A plus to owning an offshore company is you can use it to handle and hold property in various jurisdictions. You can enjoy a slew of favorable features in the process. Managing property through an offshore company could be a viable solution if you hold property in various jurisdictions, or need to protect assets from inheritance taxes.
Here are a few things to know.
Financial Benefits
The main financial benefit of holding property in an offshore company, and using it to manage property, is that you stand to avoid a lot of undue taxation. Provided you incorporate in the right jurisdiction, such property is protected against your local inheritance tax.
If you own properties in several countries, the process of passing along property as inheritance could be significantly expedited, with fewer costs, by avoiding probate. In the process, you’ll be able to better protect your privacy. When assets go through probate they may become public record, causing creditors and other claimants to come out of the woodwork.
Should you choose to sell property held by an offshore trust, you’ll gain financial advantages. For example, you can sell the shares in the company instead of a straight property sale. Thus avoiding land tax in some countries. For expensive properties, the savings could be significant. Records of the sale need not be made public because it is merely an exchange of company shares.
Legal Benefits
Holding money in an offshore account has legal advantages. Minimized liability, and avoiding probate, are two major benefits. In terms of minimized liability, a corporate entity shields an individual owner from obligations, such as a visitor who suffers an accident on the property and decides to sue.
There is no need for probate, which would normally occur in the event that a property owner dies and property is left to beneficiaries. The property passed to beneficiaries through the company or third-party trusts, avoid the fees and public records associated with probate.
How to set up an Offshore Trust Fund for your children
If you are reading this article, I’m willing to bet that you are a person who loves your children and wants them to always be taken care of throughout the entirety of their lives. As we all know, everyone’s time spent on earth will eventually run out and we will one day leave our families behind. As grim as this may sound, it’s the reality that we all live in.
People often turn to setting up a trust in order to care for their family after they pass on. If you set up a proper trust, you can ensure that your children have access to your assets long after you have passed on. Read on, to learn exactly how to set up a trust fund.
What are you putting into your Trust?
The very first step of setting up a trust is to identify what exactly you want to add to the trust. Typically, people will add stock options, savings, real estate titles, patents, bonds and any and all financial assets that they have. What you put into your trust is what will be passed along to the beneficiaries (your children).
Identify a responsible Trustee
So who is it going to be? Who is going to be the person or institution that will be the trustee of your trust and assets? As you probably already guessed, in order to set up your trust for your children, you need to decide who will be the trustee for the family trust. A trustee in this context is a person or institution that has the responsibility of managing the funds in your trust until your child is ready to use it for say education or when he or she becomes an adult and has access to the trust.
That being said, it’s in your best interest to only assign the role to someone you trust, such as financial advisor, lawyer or trust company that helped to create your trust for you. Additionally, there are plenty of trust management firms that you can use to manage the trust for you. This can be a great way to ensure unbiased management.
Transfer your assets
Our goal in this step is to simply set up a trust or trust account with a Trustee such as; First Anguilla Trust Company Ltd, so that you can have all of your assets in one place. Some people simply set up a new banking account; some people choose investing companies. Several people also chose to create trusts in other jurisdictions like Anguilla, which has the advantage of low taxation. Our recommendation is speaking with your financial advisor before you physically set up a trust in order to make a more informed decision. Please keep in mind that your trust funds must be separate from any other account that you may have.
Get legal
This is where the rubber meets the road; in this step, our goal is to make your offshore trust fund legal.
You will want to meet with your trust manager, attorney and/ or financial advisor in this step and legally draft your trust. A good trust team (attorney, trust manager and financial advisor) will explain the different types of trust you can set up and explain the benefits of each option. Essentially, when this process is concluded, you will have a legal document that will state, the purpose of the trust, responsibilities of the trustee, beneficiary of the trust and instructions to the trustee as to how the trust should be managed.
Congratulations, you have set up your first offshore trust fund.
