Offshore Definition

The definition of offshore is any foreign place in comparison to where someone now resides and does business. This is not a legal term or a division of law; it is a referral to a jurisdiction other than someone’s residence. Technically, the word has nothing to do with tax either, although it is often confused.

Offshore business, investing and banking should not be confused with the term “tax havens.” For centuries in history across the world, countless places have been presented as jurisdictions who enable people to hide money to avoid taxes. Today, this is all documentary material, secret accounts, Swiss number-only accounts, gold bouillon storage in vaults and secret currency exchanges; this is the history (or crime). Not much needs to be said to say that history has changed the course of the global economy.

The objective is to provide a better-quality environment that is the most favorable to the principle. This means Return on Investment (ROI), tax incentives, privacy and nondisclosure, asset protection, business protection, security and cash flow; this is what an Offshore Financial Center (OFC) is all about. The principle, investor, businessman/woman and family estate of today need access to what the global economy has to offer while maintaining security and privacy.

It is a fact that offshore jurisdictions provide greater security and privacy than their domestic financial counterparts. An asset haven is a country or jurisdiction that has adopted special laws and has a judicial system that guarantees strong protection for assets, along with a high degree of financial privacy. The same jurisdiction can be both a tax and asset haven, and most usually do combine both functions.

There are numerous profitable investments offshore. This is why it takes trained and educated professionals, as lawyers and as practitioners to figure out the best strategies and returns for their clients. Common misconceptions are that you must be a millionaire to take advantage of the Offshore Financial Centers or that you have to move your assets. Neither of these are true, and in fact, a majority of people use offshore planning and trusts to begin their estates and to preserve their wealth.

Some countries offer benefits and protections beyond others with regard to their legal systems that are focused toward protection. However, most important is that the agreements and deeds are constructed to properly protect all the principle investments, portfolios, assets and interest. Their laws attract

A few countries have it figured out. What they did was set up a legal system which made them stand out as areas that attract money, thereby making them attractive to foreign nationals and foreign cash. These specific jurisdictions have laws that guarantee privacy, asset protection, ease of doing business and profitable investments, with little or no local taxes.

The World Bank estimates that more than half the world's personal wealth, estimated to be $50 trillion, is deposited in 60 asset and tax centers worldwide. These offshore centers are quite ingenious. Their laws are less restrictive and they value financial privacy. In fact, in many of these jurisdictions it is a felony to disclose anyone's financial information. Additionally, the court procedures are stable, predictable and the judges will block any quick and easy enforcement of foreign judgments.

The moral of the story is this; if you work for a living, own a home, have a pension and some savings, though you may not feel you net worth is enough, you owe it to yourself to investigate if there are better options for preserving your wealth and building your estate.