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Generally speaking offshore jurisdictions provide a low or no tax environment to companies and
trusts that do not have investments or own property in that jurisdiction. Consequently for
the vast majority of people and companies, the decision to go offshore in the first instance
is often driven by tax savings. There are, however, a number of other considerations that
are relevant when considering the Offshore option.
Asset Protection and Preservation of Wealth
By settling assets into a properly established Offshore Trust such assets are taken outside
the settlor's estate. Consequently those assets would become beyond the reach of creditors
(such as an estranged wife on divorce) and in, certain instances, beyond the scope of inheritance
tax in certain countries.
Anonymity
Through the use of third party directors and nominee shareholders it is possible to structure
an offshore entity in such a way that the real beneficial ownership is masked from the outside
world thus providing clients with total confidentiality in their business dealings. Such
anonymity may be essential, for example, in the purchase of a competitor.
Neutral Territory
In many cross border transactions and investments it is often preferable to use a neutral
territory company - this is especially so when investors are drawn from two or more countries.
Double Tax Treaties
In international trading situations, and especially where royalties, interest or dividends
are concerned, it is possible to structure the affairs of a company so as to minimise the
effects of withholding taxes by the use of applicable tax treaties providing relief from
double taxation.
Estate Planning
Some countries have forced heirship rules which dictate the manner in which assets may be
bequeathed to beneficiaries. Offshore structures, especially trusts, can be used to overcome
these difficulties.
Inheritance Considerations
Through the use of offshore structures it is possible to overcome the problems of lengthy
probate proving thus allowing the assets to be utilised immediately after death.
Capital Gains Tax Mitigation and/or Deferral
Most offshore jurisdictions do not levy any form of Capital Gains Tax. Careful use of
properly constructed offshore structures can assist an individual to reduce or defer their
exposure to CGT.
International Tax Planning
Most offshore jurisdictions offer a wealth of opportunities for many forms of tax planning.
The foregoing represents just a few of the reasons to consider going Offshore. If you would
like to discuss your circumstances in greater detail please do not hesitate to
contact our offices.
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