You can buy an offshore company to lessen your tax burden or to gain access to international markets. However, it also can be a powerful instrument of asset protection for your successors. Thus, if you would like to hand down your property to your children or to somebody else, you should consider purchasing an offshore company.
Offshore company for succession purposes and beyond
An ‘offshore jurisdiction’ usually refers to the foreign country that offers various benefits to foreign business people. There are the so-called ‘classic offshores’ with zero taxes and a high level of confidentiality protection. There are also midshore jurisdictions that levy zero taxes on the profit derived from international business operations while taxing the profit obtained on their territories. Midshores will usually have a better international reputation in comparison to classic offshores.
Some high-tax onshore jurisdictions can also offer certain benefits to foreigners establishing companies or trusts there. You can set up a company in Canada, for example, and pay zero corporate taxes there.
Another definition of ‘offshore jurisdiction’ is simply a ‘foreign country’. You can establish a foreign company in all sorts of jurisdictions but you have to clearly understand why exactly you want to do it.
Foreign companies are usually set up for the following three reasons:
- To lessen the tax burden;
- To gain access to new markets;
- To protect the assets from creditors, fraudsters, and greedy relatives.
In addition to that, you can buy an offshore company in order to facilitate the inheritance processes. No one is going to live forever and you had better make sure that a good memory is not the only thing that you will be leaving behind when your time comes.
Why buying an offshore company for succession purposes is a good idea
What is so beneficial about having a company registered abroad for the purpose of protecting your assets for future generations? Let us consider the advantages that this will bring.
- Taxes. In some countries, the inheritance tax is so high that your successors may have to give half of your fortune away to the government. Some will deem this fair while others will not. An offshore-registered company, a fund or a trust can help bringing the inheritance tax down so far that it can reach zero.
- Distribution of the property to be inherited. Every country will have laws governing the inheritance mattes. The closer the kinship is, the simpler and the cheaper the succession procedures are, as a rule. But what if you have several successors and you would not like them to inherit your property in equal shares? Besides, what if you would like to leave something not only to your relatives but also to some people who are your soul mates? You can make a will, of course, but it can be challenged in court. However, if your property belongs to your offshore-registered company, it is much easier to distribute the property to those who will come after you. Naturally, you have to know what the foreign country’s laws say about this matter but we can help you with that.
- Protection of your heirs’ privacy. When a wealthy person dies, this fact often becomes known to the public. The processes involved in the transfer of the property rights to the heirs may attract too much public attention. In case your assets are registered in the name of your offshore-registered company, people in your home country are going to remain ignorant of who your heirs are and how much each of them is going to receive.
- Flexibility in transferring the property rights to future generations. You can use your offshore-registered company to bring various money inflows together. If you have a business company at home, an investment account in Switzerland and some rental accommodations in Grenada, for instance, managing your incomes via the offshore company is going to be easier and, consequently, it will also be easier to pass your assets on to your heirs. As far as inheriting real property is concerned, it is always a good idea to register the property in the name of a company rather than a personal name, which will simplify the succession procedures greatly.
- Distribution of the property on your conditions. When your property is owned by the company while you are the owner of the company, you can define what part (share) of the company each of your heirs is going to get when you go. Some national legislations will make such property distribution problematic if it is registered in the name of the person, not his or her company.
Where should you buy an offshore company in 2020 to protect your assets for future generations?
When you start thinking about establishing an offshore company for property succession purposes, you have to ask yourself several questions. Where are my assets located physically? Whom do I want to hand them down to? Where do my heirs live? What countries are they tax residents of?
The answers to these questions should let you make the choice of the country where you would like to set up a company, a trust, or a fund. For instance, you may want to consider establishing a family fund in Lichtenstein: there you will find lucrative financial conditions and a high level of personal data protection.
If you are planning to engage into active business via your offshore-registered company, we recommend that you should consider Canada, Nevis, the Marshall Islands, Singapore, or Hong Kong.
You are welcome to apply for a consultation on choosing the best country where you can register a foreign company. Just send us a request to email@example.com and we will schedule a virtual meeting with you.
When you have chosen the country, you will have to supply the documents that are required for registering a company abroad. As a rule, all you have to submit is a copy of your passport and a proof of residential address. In some instances, documents certifying the legality of your sources of income will also be required.
You can buy an offshore company remotely, without travelling to the foreign country where your company is going to be registered. This is an especially valuable opportunity in the times of the pandemic. Offshore Pro Group helps clients set up companies, trusts, and bank accounts all over the world. Please contact us at the address specified above and we will help you make the best choice.
When ancient victorious commanders triumphantly returned to Rome, the people greeted them with joy and threw flowers at their horses’ legs. There were always a servant riding behind the commander, however, who would ceaselessly whisper ‘memento mori’ – remember death.
Humans are mortal and being prepared to die is an honorable mental attitude. If you want to be remembered for a long time and with gratitude, you have to take care of your loved ones while you are still alive and kicking. Don’t you think so?