Do I need to protect assets via offshore trusts?
The reasons for the desire to “hide” anything can be very different, from the simple and reasonable desire to protect information and assets to painful suspicion towards other people.
When there is a desire to “hide” something, it’s time to ask yourself what it is dictated by, and honestly answer this question to yourself.
When people start hiding something, they are afraid that it will find something. And the strength of this fear determines the hastiness of actions with which a person acts.
Think of a movie where the main character needs to hide something valuable or important from his pursuers, enemies or detractors. He rushes about in a confined space, in a hurry shoves somewhere what needs to be hidden, and at the same time he looks excited and wound up. Spectators are immediately thrown into the face written on the face of the hero excitement and fear.
A paradoxical thing turns out: the stronger a person wants to hide something, the more it manifests itself in his behavior and appearance, that is, the more he reveals his plans and intentions to others. And the more it attracts unwanted attention to itself, the very one from which he so wanted to get rid of.
However, let’s say you managed to hide something. What does this mean in other words? That no one knows that you have something. So, what is next? Once you decide to use the hidden, no one will believe that it is yours. And no wonder – you yourself have convinced everyone that you do not have this or it does not exist at all in nature.
The task of the asset owner in the other is to limit access to information of undesirable persons as much as possible and to make impossible any transfer of assets without the knowledge of the beneficiary.
For this, the offshore industry offers great opportunities.
1. Offshore companies as key to asset protection.
A foreign company is a much more flexible tool for owning property, as compared with direct personal ownership of assets. After all, the company’s shares are easier to sell than the house or factory that this company owns. If the assets are owned by an offshore company, the liquidity of the assets increases.
An offshore company, in addition to increase liquidity, ensures the confidentiality of beneficiaries, since state registries of directors and shareholders, which are accessible to the general public, are not maintained in most tax-free jurisdictions.
This does not mean that information about the owners is absent in principle. It is kept by the agent of the company, and for its unauthorized disclosure, the agent may lose its license. So the agent in the country of registration of the offshore is your ally.
Holding companies created from several foreign companies fall into the category of offshore companies. It turns out a complex multi-stage chain of ownership of the asset, reliably protecting information about the actual owner.
2. Nominal service for an offshore company as a key to asset protection.
If the register of directors and owners of the company is open (Cyprus, Panama), it is advisable to use a nominal service – nominal directors and/or shareholders who manage (own) the company in your interests. Or they give you a power of attorney for management but do not take any part in the activity themselves.
An additional plus of nominal service is that your name does not appear in the constituent documents of the company. This means that losing or stealing company documents does not violate your privacy. Unless, of course, you have the habit of storing power of attorney along with the rest of the documents. A good offshore agent will always warn you that you do not keep a general power of attorney for a Cypriot or Panamanian company along with the main package of documents for this company. The fact that information about bank accounts opened abroad should also be stored separately should also be warned. In guides on the use of offshore bank accounts, you can sometimes find useful information and tips on how and where to store access codes for offshore bank accounts.
3. Bearer shares of an offshore company as the key to asset protection.
A very good way to protect information about the actual owner of an offshore company and its assets. It is still available in a number of jurisdictions (Panama, Seychelles).
Main disadvantages: the issuance of bearer shares does not cancel the obligation to submit information to the agent about the beneficiary (the ultimate owner of the offshore company and its assets). In addition, banks have recently looked at companies that have bearer shares, are suspicious of either asking to hand over bearer share certificates for storage at a bank.
4. A virtual office for an offshore company as the key to asset protection.
Initially, the service was conceived in order to facilitate start-up entrepreneurs to meet the requirements of the law on the presence of a permanent place of business. It is also well suited for offshore companies, which may need to specify the address in the country where the bank is located when opening a bank account.
From the point of view of asset protection, a virtual office (postal address and a dedicated telephone line) is a great way to create a distance between the beneficiary and any person wishing to contact him or his offshore company.
5. Anonymous and numbered bank accounts as the key to asset protection.
Numbered bank accounts until quite recently ensured complete confidentiality of the account holder, since banks could not request and store their personal information. In recent years, however, under the flag of counter-terrorism, the practice of using such accounts has been reduced, and the transfer of money to a numbered account or from a numbered account has become one of the signs of suspicious transactions.
In pursuit of Numbered Offshore Bank Accounts
The maximum anonymity available in banks today is an “anonymous” bank card. On the magnetic line and the surface of such a card is missing the name of the owner – an individual. However, the bank collects and stores information about the cardholder.
6. Trusts as a key to asset protection.
The highest degree of Asset protection is achieved through trusts. First of all, because the assets are transferred to the ownership of the trust company (trustee), that is, they actually change the owner.
This is the main minus of trusts for those who want to maintain control over assets. Intervention in the activities of the trustee will invariably entail attempts to recognize the trust as invalid.
Also, the founder of a trust cannot be its beneficiary, therefore trusts are always established in favor of third parties (children, relatives) and never in favor of the original owner of the assets.
You can read about asset protection in more detail if you browse this site.
7. Funds as key to asset protection.
The fund has no shareholders (owners). The property of the fund consists of assets transferred to it by third parties. In this case, the assets also change ownership.
The difference from the trust is that the management of the fund can determine the beneficiary at its own discretion. Thus, the original owner of the asset may be included in the number of beneficiaries and receive payments from the fund even after it ceases to be the actual owner.
You can read about the use of funds in more detail in one of Alexandra Listerman’s blog articles about offshore companies and bank accounts:
Private Foundations and Trusts in Panama. Instructions for use.
8. Second passport as key to asset protection.
When granting citizenship, some countries allow the possibility of changing the spelling of the name and surname or issuing a passport to another name.
But, if the person is well known, this information quickly becomes public knowledge. So, it is not a secret for anyone that the British citizen Platon Elenin and the Russian Boris Berezovsky are one and the same person.
That is why it is so important to build a personal asset protection program tailored to individual circumstances. After all, what works great in some situations may not bring any benefit to others.
The further you progress along the path of creating personal capital, the more diversified your assets are, the more urgent it is to solve the problem of protecting assets.
Those who are just starting the path to financial freedom are in a better position: they can create adequate protection for each newly acquired asset as needed.
The components of a successful asset protection strategy are only two:
– high-quality personal asset protection program, taking into account the particular situation,
– qualitative implementation of this program in practice.
Therefore, controlling the quality of the proposed solutions is simple.
However, specialists who qualitatively solve your problem of asset protection can be counted on fingers.
At the same time, the high cost of services and the high-profile name of a consultant do not always mean that the solution will be optimal for you.
For more than 12 years I have been creating protective structures for various types of assets and investment projects and have accumulated knowledge and experience that help me to clearly formulate and effectively solve the tasks of protecting personal capital of any complexity.
As a practitioner of registering offshore companies and opening offshore bank accounts, I am ready not only to develop an asset protection program but also to bring it to life.
In addition, anyone can get personal advice on the creation of offshore companies, opening offshore bank accounts, obtaining a residence permit in Europe, business emigration to Singapore. The cost of consulting in 60 – 90 minutes is $ 995 and will be credited to the cost of registering an offshore company, opening an offshore bank account and other services within a year from the date of the consultation.
I wish you to be sure that your assets are safe!