Offshore Trusts

Offshore trusts are excellent offshore entities which are primarily used for asset protection purposes as offshore trusts, if properly structured in the right jurisdiction make excellent offshore asset protection vehicles. Offshore trusts are also being formed to take advantage of tax situations in the offshore jurisdictions. Trusts have been around since the 12th century and offshore trusts and regular trusts are similar in structure, however of late many jurisdictions, in an effort to make their offshore sector more appealing to clients have made changes to trusts. Offshore trust formation in the offshore tax havens is affordable and can be done in a short period of time.

Offshore trust services in provided in many tax havens around the world. What differentiates one offshore trust from the others is the legislation and regulations which supports the trust. Some jurisdictions are considered to be excellent for offshore trust formation as they have unique clauses in legislation which makes it extremely difficult for outside parties to access trust assets or for trusts to lose assets because of court rulings. The Caribbean tax haven of Nevis is considered as one of the top jurisdictions for offshore trust formation. Cook Islands are also a preferred offshore jurisdiction for offshore trust formation. Other offshore jurisdiction which offers offshore trust registration are Belize, Panama, Cayman Islands, Jersey, Anguilla, British Virgin Islands (BVI), Bahamas, Seychelles, Switzerland, Gibraltar and Isle of Man.

Offshore trust legislation makes trust excellent asset protection vehicles. All trust assets belong to the trust and is managed by the trustee. This provides not only asset protection but privacy for the settlor since the identity of this person will not be revealed in public files. Offshore trust legislation will protect the assets placed in offshore trusts; in the offshore jurisdiction of Nevis for example, before a claimant can lodge an official claim against an offshore trust or file a law suit a deposit of $25,000 must be made. The tax havens do not recognize the rulings of foreign courts therefore offshore trusts are not forced to give up assets as a result of a law suit filed in a foreign court.

Offshore trusts for tax planning are an effective means of reducing tax liabilities. An offshore trust will pay zero taxes in the tax havens where trust formation took place, offshore trusts are not allowed to own assets in the tax haven where they are registered and the trust pay no taxes on asses owned abroad. Offshore trusts pay no inheritance tax, capital gains tax, stamp duty and transfer fees, however a trust must pay an annual maintenance fee and a registration fee.

Offshore trusts can hold assets such as real estate property, shares jewellery, vehicles, family heirlooms and any other type of assets. Offshore trust accounts can be set up at offshore banks on behalf of offshore trusts. Offshore trusts are not allowed to carry out any type of commercial activity according to offshore trust legislation but can engage in the sale and purchase of shares and stock as long as these actions are to the benefit of the beneficiaries of the offshore trust. Offshore trusts can own offshore entities, similar to Panama companies, which can be used for carrying out business operations.

An off shore trust is set up to provide for beneficiaries. The settlor of an offshore trust can also be named as a beneficiary of that trust. An offshore trust is managed by a Trustee who is appointed by the Settlor. The Trustee manages the trust according to the terms and conditions set out in a Trust Deed. The Trust Deed is a legal document which defines how the asset of the trust are to be managed and will also state who will inherit the assets and under what conditions.

Offshore trusts in the tax havens are an excellent for offshore investing and provide great benefits.