Disclaimer. All the information is for illustrative purposes only, based on the current legislation of different countries, as well as feedback from investors, independent attorneys, lawyers and economic analysts. Our portal is multinational, and we offer services with NO interest in attracting investors to a particular jurisdiction.
- Why going offshore? Advantages of Belize and Cook Islands for foreign investors
- Data security
- Open banking
- Advantages of trusts
- Tax benefits
- Courts & litigation
- Cook Islands and asset protection. Why is it strong?
- Belize. Asset protection in 2022
- Which jurisdiction is best for asset protection?
- Other countries to consider for asset protection
Many wealthy people have felt the negative impact of the global recession, the unstable economic situation and the consequences of the pandemic. And this makes them look for safe and legal ways to preserve and protect their assets that can be taken away or lost due to currency/crypto-currency fluctuations.
Many Western countries, including the U.S., are trying to get the most out of their residents, which in no way helps survive. Taxes, sanctions and many other things that are broadcast daily by the major media in different countries.
Asset protection is one of the main issues that wealthy investors and the richest people in the world are facing. One of the ways not to lose your capital and even increase it is a limited liability company (LLC), which is an inexpensive and effective way to protect your money and assets from damage and losses.
But not every country offers favorable conditions for the LLC formation with tax preferences for non-residents and local founders. Today, there are several jurisdictions for American and European investors where you can keep your assets in property or cash, as well as escape the legal jurisdiction of courts, relatives and creditors. However, the safest of them are only these two, Belize and the Cook Islands.
If you have enough input and are ready to receive comprehensive assistance for asset protection in Belize or the Cook Islands, then start with advice by our international experts.
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on which jurisdiction is best for your business, preferred tax regime, company structure.
Why Going Offshore? Advantages of Belize and Cook Islands for Foreign Investors
A lot has been said about the advantages of offshore jurisdictions and one can always study detailed information on each country and its organizational forms of business by visiting our sections on Belize and the Cook Islands. We will focus on the most important points. Why is asset protection in Belize and the Cook Islands the most advantageous option?
Lawsuits are the prerogative of creditors aimed at collecting debts and imposing restrictions on the assets of an LLC and corporation or the beneficial owner. When setting up an LLC or trust in Belize and the Cook Islands, this possibility is reduced to almost zero. All because the level of asset protection and data security is so high, and even the IRS are powerless in this case.
As practice shows, the case is unlikely to go to court, and if such a case is initiated, foreign creditors will lose more than they can gain by their claims. The more inaccessible the founder, the more obstacles the creditor will have to overcome to get access to the registry, to obtain the approval of the local courts to apply, as well as to wait for the consent to the collection from the courts of Belize and the Cook Islands which requires considerable financial costs and time. And all of this is rather theoretical possibilities than practical opportunities since every lawyer understands the complexities of such a process.
To put it simply, an LLC in Belize and the Cook Islands makes you unattractive to lawyers and plaintiffs, and when using a trust entity, you will be even out of reach because of the capital alienation from the beneficial owner.
Legislation in Belize is very modern and allows stronger asset protection at lower costs.
To ensure that your company’s place of incorporation would not conflict with the banking sector at the account location, it is important to consider such things as OECD and FATF compliance, blacklists, and compliance/non-compliance of the jurisdiction with the established global and local norms. It is important to consider the tax residency rules of the beneficial owner’s country.
Both options (Belize and the Cook Islands) are not on the blacklist of offshore zones, and their LLCs are free to hold bank accounts to protect their assets in any country.
Please see more information and find actual help on bank accounts for offshore companies on our portal.
Advantages of Trusts
Trust are a different topic. That said, both Belize and the Cook Islands are suitable for the transfer of assets to confidential management. But we advise you to consult experienced experts who will help you choose the right organizational form of business and register a trust on the most favorable terms.
Important note. Assets can only be transferred between the trust entity and the LLC, including those established in different jurisdictions.
When going international, it is important to consider the tax burden that is close to zero when setting up an LLC in one of the countries mentioned. And the key here is to set up a business in a better organizational form, a non-resident company, as taxes and conditions are tougher for local founders and corporations than for foreign ones.
Don’t forget about the licensed niches that include insurance corporations, gambling entities, banking, trading activities, etc. To take full advantage of the level of asset protection offshore, the place of profit generation should not coincide with the country of incorporation, and it is better to have an account with the most reliable bank.
Courts & Litigation
One of the most important advantages of the legal systems of Belize and the Cook Islands is that the decisions of foreign courts are not recognized. This will allow you to stay out of lawsuits that may be filed by creditors, relatives and the government of another country, and securely protect your assets from various restrictions.
For example, if a judge in the U.S. issues a judgment that the plaintiff can get your assets against the debt and other obligations, it will not affect your LLC in Belize or the Cook Islands. To get the right to dispose of the LLC’s capital, the plaintiff will have to file a lawsuit again, this time in the jurisdiction where the company was established.
The only option to get the assets is to seize the payments the debtor receives from their business (dividends, interest), or prove the fact that all assets were transferred to the LLC or third parties to evade paying the debt.
You should also know that even if they win the lawsuit, the creditor cannot claim a share in your company or become a member of your LLC, as well as to arrest and dissolve your assets. The reason for this is the Debtors Act that is in force in Belize and the Cook Islands. According to this document, creditors are prohibited from interfering in any way with the activities or assets of the LLC.
Understanding the complexity of this procedure, creditors usually prefer to settle their disputes through the pre-trial process or abstain from lawsuits altogether.
Important note. LLC assets can be located in any country of the world, but they will officially belong to the company in Belize or Cook Islands. There is no residency requirement for the LLC executives, managers and members.
Cook Islands and Asset Protection. Why Is It Strong?
The Cook Islands is an isolated island nation located in the middle of the Pacific Ocean, and in free association with New Zealand. LLCs are controlled by the Financial Supervisory Commission under the LLC Amendment Act 2013.
Here is what you should know about the Cook Islands legislative framework on LLCs incorporation as a safe haven to protect the assets of wealthy individuals and investors:
- The courts of the island country do not accept the decisions of foreign judicial bodies. To request the return of debts, one must apply to the local court.
- The period for asset recovery in the case of a positive decision of the local court is 5 years, without the possibility of extending it for any reason. If the property and monetary assets have not been seized by the creditor within this period, they cannot be handed over to them afterwards. Please note that according to statistics, not a single decision in favor of foreign creditors has been registered in recent years.
- Here are the requirements for LLC registration in the Cook Islands for non-residents:
- company founder shall be a person of any residency;
- nominee service is permitted;
- no obligation to submit annual returns and financial statements, but bookkeeping is required (storage with an agent);
- it is mandatory to have a local registered agent;
- the information provided to the Registrar includes: name of the LLC, name and address of your registered agent.
- Tax rate for LLCs in Cook Islands, if profits come from foreign sources, and the business doesn’t need to be licensed is 0% (corporate tax, dividends, capital gains, stamp duty, personal income tax).
For more information on the Cook Islands for asset protection, please feel free to contact our experts.
Belize. Asset Protection in 2022
Belize, formerly known as British Honduras, is located in Central America on the border with Mexico and Guatemala. Like some other countries, Belize is determined to protect the assets of its investors, and does not recognize foreign court judgments against Belize LLCs. In order to initiate litigation and seize the assets of an LLC, foreign creditors will need to pay a certain amount to the courts of Belize:
- 50,000 U.S. dollars;
- or ½ of the requested amount.
It is very disadvantageous for foreign creditors who also have to ensure their residence in the country during the process and incur significant financial costs, not having a 100% guarantee of a positive outcome.
As for the issue of the LLC asset disposal in Belize, you should know that section 36 (2) of the Act says that the creditors may claim a share of the LLC. But it is contradicted by another part of the Act, sections 36 (3) and 57 which specify that the only right of the successor in relation to an LLC is to receive its payments with the permission of its members and executives. There is also a prohibition on selling, transferring, disposing of, and collecting interest.
What else you need to know about LLCs in Belize to protect the assets of foreign companies and wealthy individuals in 2022:
- No reporting requirements.
- 100% foreign ownership is allowed.
- Accounting books must be kept by the LLC founder, but they can be stored in any place and country in the world.
- The only document to be submitted to the Registrar is the Articles of Association of a Belize LLC which guarantees a high level of data security.
- Information on the founders and members of the LLC is not publicly available, and is kept by the registered agent.
- There is no tax on capital gains and income generated outside the LLC’s country of incorporation.
How can one register an LLC in Belize? How much does it cost? Please read our article.
Which Jurisdiction is Best for Asset Protection?
Many experts agree that the Cook Islands has the strongest litigation practice related to asset protection. But Belize wins in terms of the amount of deposit required for litigation.
As for tax benefits, Belize and the Cook Islands are identical. No taxes, no reporting and no auditing.
Speaking of data security, both jurisdictions allow to conceal the beneficial owner’s name not only via legitimate anonymity, but also via the use of a nominee shareholder/director or via a trust. In both cases, it is legitimate.
To make the only right decision, please feel free to seek advice from our experts who will analyze your situation, help you open a bank account to protect your assets, register an LLC and a trust to preserve your assets. Please contact us at email@example.com.
Other Countries to Consider for Asset Protection
In addition to Belize and the Cook Islands, you can consider other countries where asset protection used to be at the top level, and foreign investors were choosing them to set up companies.
- Nevis has an excellent record similar to Belize. You can set up an LLC with a local bank account with the support of our experts.
- The Marshall Islands are still dependent on the U.S. which is not always good for asset protection.
- The Isle of Man has well-developed insurance and banking sectors, but there is no enhanced protection of assets and investors’ interests. At least once a year, the courts side with foreign creditors.
- Panama offers good asset protection, but its main issue today is the publication of the Panama Papers in 2016.
- Other European jurisdictions are Jersey, Guernsey, Liechtenstein and Luxembourg. These countries are good for asset protection, but they are more expensive, both in terms of business registration and renewal.