F.A.Q. - Asset Protection

Topics
Reasons for Asset Protection 'Offshore'
Offshore Financial Centers
Offshore Banking: Reasons and Rules
The Process of 'Going Offshore'

Reasons for Asset Protection 'Offshore'

What are the primary reasons for having wealth placed offshore?
Privacy. Your rights to privacy are all but gone in several nations, particularly if you reside in, or are a citizen of, the United States or Canada.

Asset Protection. To secure yourself against future predatory litigation. (If you earn 50,000 USD per year or more, statistics say you will be sued an average of seven times in your life and this number is growing.)
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What is Asset Protection?
To take a proactive position with one's assets (real and personal property) and legally placing them beyond the immediate reach of potential or future claimants, creditors, and/or adversaries. This goal is achieved by making the asset unattractive (by the placement of debt or encumbrances) and legally unreachable by such claimants.
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What is the main reason for Asset Protection 'Offshore'?
Protecting one's assets from fraudulent creditors' claims has always been a wise business and personal planning technique. The most prevalent form of asset protection has, until recently, been the utilization of domestic or local corporations and limited partnerships. Individual assets were held in the name of such an entity and if certain procedural requirements were met, this type of ownership would afford a certain amount of protection in the country of residence. The problem with using a domestic entity to protect one's assets is that the domestic entity is still subject to the local Court system. A person makes a quantum leap in asset protection when legal title to personal assets is placed in an offshore entity. The entities of choice have been the Foreign Trust and the Offshore Corporation (IBC - International Business Company).
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What other reasons are there for Asset Protection 'Offshore'?
1. Economic diversification;
2. The achievement of a "Low Profile" of anonymity with respect to wealth;
3. The avoiding of forced dispositions;
4. Premarital planning;
5. The preservation of entitlements (e.g., Medicare and Medicaid);
6. Marital property planning (e.g., establishing a vehicle for partitioning community property...spousal gifts);
7. Tax Planning (e.g., establishing a vehicle for exemption equivalent trusts and generation-skipping transfer tax exemption trusts);
8. Planning for the contingency of changing one's domicile or citizenship;
9. Participation in investments not otherwise available to U.S. investors;
10. Preplanning in anticipation of currency controls or restrictions on ownership of bullion; and
11. Liability protection, tax planning, or strategic advantage in the context of an active trade or business offshore.
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Offshore Financial Centers

What is an Offshore Financial Center?
Sometimes referred to as an offshore jurisdiction or tax haven, a country that generally has more lenient financial and banking laws coupled with higher standards of personal privacy than one's home country.
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What is an Offshore Jurisdiction?
Offshore jurisdiction, in the financial world, refers to a jurisdiction in a country other than where the investor lives.
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How do Offshore Financial Centers get started?
Certain countries, or legal jurisdictions within countries, seek to make it attractive for you to incorporate and carry on financial activities within their jurisdiction. Countries like Panama, Cayman Islands, and Bahamas base their economy on foreign investment. By offering tax advantages to nonresidents, the nonresidents create jobs and boost their economy.
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What constitutes a Favorable Jurisdiction?
A desirable jurisdiction should provide reasonable assurances of personal and corporate privacy and be politically stable. Financial stability is also important. Many key offshore jurisdictions are financially stable because they are in locations that generally see a lot of tourism and retirement.
Moreover, language, the quality of telecommunications, time zones, availability of professional infrastructure and type of currency used locally are also important.

Most popular jurisdictions have a legal system derived from a western country and greatly favor corporations, which are nonresident in nature. There must be a solid commitment to the protection of private property and the promotion of international trade.
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Offshore Banking: Reasons and Rules

Why should I have an Offshore Bank/Brokerage Account?
Privacy, Asset Protection, and International Investment opportunity. One of the most important aspects of offshore banking and brokerage is personal or corporate privacy and banking confidentiality. Funds and other assets are significantly better protected from creditors, and/or any other form of lien or confiscation action, in an offshore jurisdiction than in your country of residence. Keeping assets offshore considerably reduces the likelihood of litigation from lawyers working on a contingency basis. Furthermore, it is possible to have much greater access to certain types of international investments at a reduced cost.
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Is it Legal to have an Offshore Bank Account and/or Brokerage Account?
This depends on the jurisdiction. It has never been illegal for Americans or Canadians to maintain bank accounts or investment accounts offshore. Similarly, most countries allow their citizens to own foreign bank accounts. You should consult a legal expert in your own jurisdiction to find out whether your resident country allows this, and if so, how you would report it.

Earnings in an offshore account are generally considered tax-free in the country where the bank or brokerage account is located. Offshore investors, including US and Canadian residents, are expected to voluntarily report any income earned offshore. Offshore banks do not cooperate with, or provide reports to the IRS or Revenue Canada on your income earned from any form of investment, so it is entirely up to you to comply with the reporting requirements of your jurisdiction. Questions surrounding offshore banking legalities usually arise when a US or Canadian citizen fails to report offshore income to the IRS or Revenue Canada at tax time.

In some cases, there are ways of structuring your affairs using offshore companies or trusts that can be used for tax reduction or deferral. The laws in each jurisdiction differ, so you should consult a local tax advisor to find out how.
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Can you help the average client minimize or legally reduce their taxes?
We provide structures that maximize privacy and access to international investments. We believe taxes are the legitimate way for any community to provide for its basic social services. Regrettably, some countries like the U.S. and Canada have adopted a tax exploitation policy towards their citizens. For citizens of these jurisdictions, there are minimal opportunities for legal tax reduction by use of offshore structures. You should consult tax experts in your country of residence for advise on these matters. Your compliance with the tax laws in your country is entirely your responsibility.
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Is it Legal to send more than $10,000 USD from the U.S. or Canada?
Yes . There is no limit to how much you can expatriate from the U.S. or Canada provided you comply with the various reporting requirements.
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The Process of 'Going Offshore'

Do I have to travel abroad to Invest Offshore?
No. Offshore investing does not entail living abroad or even traveling abroad. Offshore investing can be done from your own home through qualified professionals who will function on your behalf with reputable offshore banks and professional firms. Investments within your country of residence can be purchased on your behalf from an offshore location.
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How do I utilize offshore funds in my country?
You can wire money directly from your offshore bank account or brokerage account into your domestic account. The banks will allow you to wire transfer through an online banking system much like the ones you use with your local banks.

Offshore bands and brokerages issue Visa/MasterCard debit cards adn secured credit cards to account holders. These cards may be used to make purchases from merchants or to withdraw cash from an ATM.

The foreign company (IBC) or trust may purchase real estate, cars, businesses, etc. Typically, the founder/client acts as an agent of the IBC or trust to purchase assets on its behalf. By this, assets are held under a corporate or trust name, thus helping to protect the client's privacy.

The client may borrow funds from the corporation or trust. The IBC or trust is a seperate legal entity from an individual and may make loans to individuals or other entities.
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For a breakdown of all costs, please visit http://www.1offshorebanksource.com/offshore_account_company_rates.htm.