Offshore Structuring

             * Incorporatii - STRUCTURING PACKAGEs & PRICEs *

Offshore is becoming the great interest. Whether it be investments, pensions, asset holding or the use of Companies and Foundations (collectively termed as 'offshore structuring') - is a subject many people find quite 'interesting'. The reason for this is very simple: perception. Global Revenue collectors on the other hand, seem historically to have problems with the subject;

To minimise the use, authorities of course engage measures to ensure that the general public tend to avoid using such offshore structures.

Most people and businesses around the world now have a more engaging perception of offshore structuring. It is neither illegal nor immoral to make use of offshore structures.

Quite the opposite in fact, they can be a wise additional strategy for prudent and diversified investment and tax planning. Most international 'big players' have been structured for years. Only a few, like Enron and Parmalat have made a complete hash of it.

It is not required of any resident to necessarily make use of local
structures and investments, nor is it legislated that they should expose
themselves to more taxation than is necessary. Clients often invest only
through local markets, only use local structures and banks because they
are too afraid to venture anywhere else in fear of the unknown.

Modern regulators work together to maximise information
availability, tax collection, recording of financial activity and to
minimise the opportunity for secrecy and anonymity in the economic
sector. This has led to the tightening of controls mainly due to illegal
terrorist activities and the events of 9-11. Regulators across the world
have introduced more precautionary measures in line with the latest
Money Laundering Acts, Patriot Act, and the recent Proceeds of Crime
Act 2002. Solicitors who suspect their clients of tax evasion are now
required to report them to the authorities without telling the clients they
have done so. This requirement, is a result of the tougher new laws on
money laundering, which are now in force.

Residents however, can be assured that provided you act within the law, make proper disclosure to regulators and conduct business accordingly; one is quite entitled to "go offshore". There are certain activities that are certainly not accepted practice such as: tax evasion, money laundering, fraudulent transfers and so on, that irrespective of where you reside, are illegal.

There are 5 main advantages of going offshore:

1. Financial Privacy
2. Tax Savings
3. Asset Protection
4. Higher Returns on Investment
5. Economic Anonymity

Although ones strategy may focus on a particular element, each one can be as important as the other, and structures can be designed accordingly. Without the synergy of all the concepts working together, the results are reduced.

Further examination:

1. Local financial institutions are required to provide regulators with client detail, annual balance, large movements, profit/loss etc. Offshore institutions with no connection to local authorities are not required to provide this information. In fact, for many offshore jurisdictions, it is illegal for these institutions to provide information.
2. Economic anonymity is a scarce commodity in most regulated societies. By structuring financial activity on a corporate and/or personal level, it is possible to gain ones anonymity back. With the correct structures in place, it is less simple for creditors, ex-spouses, business competitors and the public at large to put all these elements together.
3. By placing assets in Companies and Foundations it is very possible, if managed correctly, to protect those assets from creditors or attachment in the case of a civil law suit. Professional people who can be held personally liable are example candidates, such as doctors.
4. Certain jurisdictions have authority to place investment, and investment business histories have generally far greater rates of return than in the UK and USA. In some cases, amazing returns of 15% - 40% per annum are not uncommon. One must be careful however, in choosing with whom to secure ones investment.
5. Tax saving is always considered an added benefit, and with the correct strategy and offshore management in place, this is quite possible to do. For example, we can now mitigate CGT, IHT and forced succession rules for purchasers of overseas property. At the other end of the financial spectrum it is quite possible to reduce or delay local taxation with a very simple local structure.