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Running a Safe Custody Business Offshore

An excellent business opportunity in today’s world is providing offshore safe custody services. Why? The world is changing. The days when North Americans and Europeans traveled a lot and then went home to retire are going away. More and more hard working people who have saved for retirement are choosing to retire far away from the country of origin. The movement of retirees, as well as expatriate business people, from location to location offshore presents the problem of what to do with “things.” When an expat businessman accepts a two year transfer from Belize City, where he has a home, to Rio de Janeiro where he will keep an apartment he will need a place to store his valuables while he closes or rents out his house. An expat couple who travel a lot will have the same problem of protecting valuables when traveling away from their new home.

In today’s world this scenario is more and more common. A secure place for documents, art work, jewelry, and valuable furniture, and the like is a must for many living and working internationally. This need presents an excellent opportunity for an offshore business. A number of offshore jurisdictions have government issued licenses for this sort of business. Typically the customers will need to be non residents of the country but that only makes sense as permanent residents are not going anywhere and don’t need the service.

An individual or corporation can obtain a license, develop the business, build and staff a secure facility, and charge for the service of providing safe custody for all manner of valuables whether the individual is traveling or simply wants valuable stored in a safe location while living in the off shore jurisdiction.

Why One Jurisdiction versus Another

In setting up an offshore business the investor will be looking for the opportunity to make a profit. Thus he or she will want to be assured that there are a sufficient number of non residents in the jurisdiction who can and will use the service. Ease of doing business is typically an attraction to those wishing to work offshore. Thus simplicity of set up requirements and paperwork will be an incentive to choose one jurisdiction over another.

Cost is a factor although the cost of setting up an offshore business of this type typically runs around $27,000 including all application and license fees for the first year. There is usually not a lot of difference in cost from country to country. Ongoing costs of operation, including license renewal will run about $12,500 a year including license renewal and fees.

A typical reason individuals and corporations set up bank accounts, set up businesses, create foundations, and live in offshore jurisdictions is that many of these locations are tax advantaged. Thus the choice of a jurisdiction for doing business offshore may have to do with tax treatment as well as business opportunity. Many offshore jurisdictions have laws allowing for the creation of international corporations and foundations by which asset and personal privacy can be maintained. The ability to couple these advantages with business opportunity will often be a determining factor in choosing an offshore location for a safe custody business.

Political stability, the rule of law, and economic stability are also important factors in choosing an offshore location for a safe custody business. Although political instability in a country may encourage clients to use safe custody service the same factors may just encourage them to take everything and leave the country. A stable nation with a stable economy and the rule of law will attract expats to live there and bring their valuables. Even in the most secure locations people will typically keep valuable documents, jewelry, and the like in safe custody. A large, wealthy expat population drawn by conditions in a stable, democratic country will be more likely to increase business in safe custody than to decrease it.

Who Can Set Up a Safe Custody Business?

Virtually any individual or corporation can set up an offshore safe custody business. The individual or corporation will need to have the experience or expertise in running such a business. Either the principals in the company or hired officers and directors will typically count for this requirement. Although there may occasionally be circumstances that disqualify an individual from being a shareholder, director, or officer of a company providing safe custody services it is often possible in a number of jurisdictions to set up nominees for publically registered positions in the company or for the company to be owned by another corporation. These are matters that need to be discussed with competent counsel in the planning stages of any such business.

Running an Offshore Safe Custody Business

An offshore business with a physical presence in the host jurisdiction will often hire local staff for much of its operations. It may, in fact, be a requirement to hire locally for a certain percent of personnel. Because many offshore jurisdictions have a lower cost of doing business and a lower wage scale than a person’s country of origin this will typically be an advantage and not a disadvantage. Nevertheless there will often be skill sets not easy to find in the offshore location and which can be easily outsourced. Working with competent counsel from the outset will help founders of an offshore safe custody business make the right choices and right connections in getting appropriate business software, web site construction and maintenance designed to bring attention and customers to the business, and competent legal advice if and when needed.

As in all successful businesses thoughtful foresight and careful planning eases the way into a cost efficient (and time efficient) profitable business. Picking competent counsel from the outset is probably the most important thing to do. Next will be clearly thinking through what the business will do, where it will find customers, precisely what services it will offer and how it will function day by day. When this is clear a look at possible locations for setting the business will be in order. When the individual or corporation has obtained a license in an ideal location, has competent counsel and a strong business plan the rest will just be doing business and depositing profits in an offshore bank.