Offshore Trust Formation

Offshore trust formation in the offshore jurisdictions is similar to the process of setting up an onshore trust. Offshore trusts are also called asset protection trusts or exempt trusts and can be incorporated in jurisdictions with offshore trust legislation or trust legislation which make provisions for setting up exempt trusts. There are many excellent offshore jurisdictions for setting up offshore trusts; Nevis, Belize, Anguilla, Seychelles, British Virgin Islands (BVI), Cyprus, Panama, Isle of Man, Cook Islands and many other jurisdictions.

Offshore trusts can be formed by oral or written instruments and there is no obligation to register offshore trusts. The formation of offshore trusts can be used for many purposes including tax planning and asset protection. In fact it has been said that the offshore trust provides the most secure and best asset protection amongst all the offshore entities available. The level of asset protection received from an offshore trust is also dependent on the tax haven chosen for offshore trust formation and how offshore trust laws are enforced there.

In order to form an offshore trust in the offshore jurisdictions a registered agent must be contracted by the person(s) interested in offshore trust formation. The registered agents prepare and file documents for the offshore trust formation and remove the need to the Trust Settlor to travel to the offshore jurisdiction of choice for trust formation. The offshore agent in most cases plays the role of trustee and provides the offshore trust with a registered address in the offshore tax haven. In most cases agents also can assist you with different offshore services, for example registration of Seychelles corporation or Nevis company.

The following are the parties which are needed for offshore trust formation in the offshore tax havens:

• Settlor also called the grantor is the individual who puts up the assets for trust formation offshore. The assets which can be granted for a forming an asset protection trusts includes real estate property, stock, shares, art jewellery, vehicles and other types of shares. An offshore trust can only own assets outside of the jurisdiction where offshore trust formation took place. Once assets have been transferred they now belong to the offshore trust.
• Trustee can be an individual or company who is responsible for the management of all assets in the offshore trust
• Beneficiaries are the individuals or organisations who will inherit the assets which are being held by the offshore trust.

Offshore trusts are managed by a document called a Trust Deed. The trust deed is a legal document which outlines how trust assets are to be distributed among the beneficiaries, the conditions under which assets can be disbursed or the trust can be cease to exist and the date by which an offshore trust can be dissolved.

To register an offshore trust in the tax havens the following is filed with the registration body:

• The name of the offshore trust
• The registered address of the trust
• The name and address of the registered agent
• Copy of the Trust Deed
• Name and address of the beneficiaries

Offshore trust incorporation is affordable and so are the annual maintenance fees. Offshore pay no local taxes in the tax havens on assets owned overseas or funds generated abroad.