TrustMakers

asset protection course
Going Offshore
Take the Free Quiz
Change the Font-Size on this pageLargest Article Text SizeLarger Article Text SizeNormal Article Text Size

Going Offshore - Q & A

Going offshore means to makes use of out of country corporations, trusts, partnerships, banks, funds, and management firms to legally safeguard assets, minimize taxes, plan for the future and take advantage of global investment opportunities.

What mistakes do people make going offshore?

In order to successful invest offshore, proper structuring and management of investments and transactions is the key. For the international investor, improperly structured and managed investments result in lower investment returns, noteworthy risks, unnecessary tax liabilities and possible civil and criminal penalties. This is why it is vital to have a qualified professional structure an offshore program, and then invest with established and reputable banks, brokers, and financial service providers.

Is it illegal to move assets offshore or to have offshore bank accounts?

It is not illegal to have accounts, funds, reserves, liabilities, assets, and the like anywhere in the world. However, any assets or profits should be declared according to the Internal Revenue Code of the IRS. Failure to do so will make an individual subject to certain penalties and fines. The key elements are if the assets and profits are 'reportable items' in that current year.

To set up offshore is not illegal; however, in some countries, to withhold information about offshore investments is illegal. The question of legality often arises from misinformation that is supported by high-tax jurisdictions in order to keep their residents at home. An offshore jurisdiction should be perceived as a foreign country, but with certain advantages. These can take the form of banking secrecy laws, advantages in the formation of companies for international trade or investment operations, no interest tax, no inheritance taxes, no capital gains taxes, no individual taxes, etc. Depending on an individual's personal needs or preferences, there will normally be one or more offshore jurisdictions that offer the services he seeks.

Is going offshore only for the wealthy?

Although this was true a many years ago, today, with the high quality of services available, going offshore is now a relatively simple and affordable procedure for almost everyone. Once having moved all or part of a business offshore, the savings made by the low-tax or tax-free status will open up a whole new world of investment and business opportunities.

Can existing businesses be moved offshore?

There are some companies who have moved some of their business offshore almost immediately as separate subsidiaries and profit centers. However, an owner needs to look at his business with a view to reorganize his activities and look for new business opportunities on a cross-border basis into other countries.

Are there other advantages besides lower taxes?

Yes. There are a number of advantages which include: Anonymity, asset protection, foreign property holding through a company in a third country, limiting of liability in business transactions, unrestricted flow of capital, transfer of assets etc.

What is an International Business Corporation (IBC)?

An International Business Corporation (IBC) is a corporate entity that is established in an offshore tax haven. The tax haven has no tax on business and investment activities of the IBC. Although an IBC alone cannot provide an effective offshore investment program, IBC's are usually integral parts of an offshore investment strategy, and this is the most common type of entity used.

Is an individual's money safe offshore?

Many financial experts believe that offshore investing, when done through reputable companies, is much safer than investing onshore. Higher reserves and greater liquidity ratios are found in established offshore financial institutions in comparison compared to their counterparts onshore. In secure offshore havens these problems are nonexistent because of stringent banking laws, lower costs of operation, lower taxes, conservative investment policies, lack of stockholder pressure to maximize profits which result in higher risk taking on loans and investments, and relatively lower executive salaries and bonuses. In addition, further safety and protection of investments and assets against lawsuits and creditors are achieved offshore.

How are offshore investments and assets protected against lawsuits and creditors?

Complete protection of investments and assets from both lawsuits and creditors is achieved in properly structured offshore investments and assets. Structures for investment and asset protection includes Asset Protection Trusts (APT), Limited Liability Companies (LLC), International Business Corporations (IBC), annuities and various types of insurance.