Offshore trusts are the strongest asset protection tools in the world. Offshore trusts are similar to traditional trusts in that they consist of a relationship among “Trustees”, “Settlors” and “Beneficiaries”. The “Trust Deed” is the written legal document that establishes the provisions of the offshore trust. Offshore trusts can hold title to assets and property, manage assets and provide many benefits to the person or group of persons appointed as the beneficiaries. The trustee or trust company that manages the trust must uphold the agreement and provide for the beneficiaries as well as protect the assets from predators.
The Benefits of Offshore Trusts
- Privacy: Depending on the jurisdiction, offshore trust deeds are not registered publicly. Furthermore, the settlor can give the assets to a trust disassociating a person from the assets, providing reduced taxation and ensuring anonymity for personal or business protection.
- Protection: Asset and wealth protection from taxation or litigation and personal protection through anonymity.
- Flexibility: An offshore trust can be designed to fulfill personal, family or business requirements.
- Legal status: Offshore trusts are recognized in all Common Law jurisdictions and also have increasing recognition in civil law jurisdictions.
- Tax planning: Offshore trusts are an important tool for international income, capital gains and inheritance tax planning.
- Tax exemption: Offshore trusts can benefit from local tax exemptions on assets or income if established in an offshore jurisdiction where no resident benefits from the offshore trust.
- Financial security: Offshore trusts can be used for asset protection as well as to protect against unexpected financial situations.
Where to Incorporate Offshore Trusts
Offshore trusts are often formed in low-taxation or low-regulation havens that are known to have a reputation for the successful management and execution of trusts and trust funds. However, it is not absolutely necessary for a suitable location to be a tax haven or have tax regulations. Many of the successful trust formation jurisdictions and countries simply offer renown, experienced trust companies with superb confidentiality and with substantial asset protection. One common characteristic is that these jurisdictions base their trust regulations and statutes on the English Common Law. Other European jurisdictions that offer successful trust administration, such as Luxembourg, Malta, Switzerland, etc., have adapted their statutes and regulations to conform with the proper trust administration models set out by those based on the English Common Law.
Offshore Trusts Jurisdictions
- Isle of Man
- Turks and Caicos
- Cayman Islands
- St. Vincent
- Hong Kong
- Cook Islands
- New Zealand