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Ten Ways to Protect Your Assets Offshore – Asset Protection

The computer age was supposed to make life easier. To a degree it has. It has also made life more invasive. Identity theft, people and institutions prying into ones private affairs, and increasing governmental intrusion into the everyday lives of citizens have become facts of life in many countries. The constant threat of higher taxation and frivolous law suits where those with hard earned wealth are made to pay when their degree of fault is minimal have become increasing threats to the preservation of wealth. It is no surprise that many are choosing to protect their assets by taking them offshore.

The very wealthy have known for years that the best way to protect wealth is to store it and grow it in discrete offshore banking centers using a variety of legal vehicles to preserve privacy and guard assets. As the intrusiveness of government, the general invasion of privacy, and the threat of losing all due to some else’s neglect increase more and more are choosing an offshore solution. Here we look at ten ways to protect your assets offshore.

1) Offshore Banking

Interest income in a bank account in most offshore jurisdictions is not taxed in that jurisdiction. Taxes may be payable in the country of origin of the account holder but no taxes are assessed during the year. Also, the matter of reporting and paying taxes is up to the account holder. In most offshore jurisdictions there are very specific laws protecting the account holder from any private information being disclosed. Such accounts typically allow for wire transfers in and out of the account and a debit or credit card to use anywhere in the world.

2) An International Business Corporation

An offshore corporation can be used to conduct active business throughout the world and it can be used to control assets without having the name of the corporation’s shareholders being made public. Offshore corporations typically cannot do business with anyone in the host nation but are lot limited in the scope of their operations elsewhere. When such a corporation earns money outside of its offshore jurisdiction it is not taxed in that jurisdiction.

3) A Panama Private Interest Foundation

There are a number of jurisdictions that allow one to set up a foundation. The Panama Private Interest Foundation is unique and quite useful for asset protection. It has no owners. It has beneficiaries. These beneficiaries are typically not known to the world. The foundation can control a wide range of assets in privacy and benefit those for whom it was formed, without the world knowing who they are or what their assets are.

4) An Offshore Trust

Many offshore jurisdictions offer the benefit of trusts that do not need to go through or even be considered for probate proceedings in an individual’s country of origin. This vehicle can be used as a holder of many other legal vehicles for the protection of assets.

5) Take Advantage of Offshore Privacy

In a large number of offshore jurisdictions individuals and corporations are able to set up legal vehicles such as bank accounts, trusts, corporations, and foundations where the names of the principals are never known to the public. Unless there is suspicion of money laundering or drug trafficking this privacy is essentially inviolate. In legal and tax matters information about an account can only be accessed by a foreign entity if it knows about the account and can prove a number of difficult legal issues in the host country’s courts system.

6) Tax Advantaged Offshore Jurisdictions

Virtually all offshore jurisdictions do not tax income that is derived from outside sources and do not tax interest income from offshore bank accounts.

7) Banking through a Corporation

An individual or corporation can form an offshore corporation, with or without bearer shares and with or without nominee shareholders. Then the corporation can open a bank account. This is an excellent means of providing personal privacy and asset protection offshore.

8) Banking through a Foundation

A foundation such as a Panama Private Interest Foundation can hold any number of assets for its beneficiaries. This includes a bank account. The beneficiaries can have access to the bank account’s assets through the use of credit or debit cards that can be used worldwide. A foundation can also own a corporation that owns bank account.

9) Banking through a Trust

A trust can be set up to guard and control a number of offshore assets including a bank account. As with the use of a corporation or foundation, a trust can hold a bank account as an asset for the benefit of trust beneficiaries.

10) Layered approaches

It is entirely possible, and very common, to combine a number of perfectly legal offshore solutions, from different jurisdictions, to multiply the degree of asset protection that one of two might afford. A foundation or trust can be the holder of a corporation which can do business anywhere in the world and not pay taxes in the offshore jurisdiction. The same corporation can have a bank account it its name. Beneficiaries of a foundation or trust can receive payments, use a bank credit card, and receive other benefits such as the use of a house, car, or boat all in the name of a subsidiary corporation or from a subsidiary bank account.

And - Be Personally Discrete

This last item could be number 11 or it could, perhaps be number 1. It has to do with how you present yourself to the world in order not to be a target.

By in large the old rich know this and the new rich need to learn it. You can have wealth and you can enjoy wealth but you don’t need to flaunt wealth. The more attention you call to yourself the more trouble you will have trying to preserve your privacy and guard your wealth. Being personally discrete goes a long way at home and offshore in protecting your assets.