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Is there any reason to "go offshore" other than secrecy
Internal Administrator
Posted: Saturday, August 13, 2011
Joined: 10/12/2010
Posts: 5780


Posted: 9/20/2009 3:55:51 PM

By: David S. Lesperance

In the Switzerland thread, one poster postulated that given the expense, hassle etc of legally structuring offshore, that there is no logical reason to consider this. Any thoughts or comments?

David S. Lesperance
Barrister and Solicitor


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/21/2009 10:06:48 AM

By: Archangel

the number one reason would be for having the option or at least the knowledge that one has other options than what they would have in their own country. for example, your business may be of such that you can use that convenience. also there may be a longer "time float" on things like cheques issued or invoice processing. it gives you some options. you are essentially buying time in an emergency. alternatively you may have a large family business that is tightly controlled. you may prefer the rites of succession ( 'inheritance") in another country rather than you own. still some countries like Panama have a type of power of attorney that allows you to name almost anyone and gives that person the right to do virtually anything on behalf of the company. or in Panama or Macau the laws governing shipping / marine commerce are very favorable. so going there for establishing a corporate entity is at least worth considering if you have a marine transport business. I would say going offshore allows you some choices that you might not get in your own country. if you have sizeable assets--e.g. at least USD 500,000 for an individual or a company with revenues exceeding USD 10 million annually--then at least consider offshore for what it can do for you. also deal with a reputable offshore law firm. in order to get rational advice that means for a US citizen or a UK citizen seeing a lawyer in a country like Panama,Caymans, Bahamas, or Gibraltar . you may have to visit them in person but it is worth it.other scenarios can show how offshore planning can be of help.
Recently there was a man in Texas that was a devout Hindu and contributed very heavily to local politcal campaigns. he was once a respected local business man. then it was revealed by newspaper/TV journalists that he had sizeable holdings in several sexually Oriented businesses ( "mens' clubs with topless or nude waitresses ,lap dances,etc). as soon as that was revealed in the papers, all his contacts/political favors left him and he was an outcast. now even if his religion told him not to visit such establishments ,however, he was allowed to invest in them. so he saw no wrong doing from his religion.yet, the general public felt otherwise. that type of person could have used an offshore company that he had an undisclosed directorship in which he could name another as power of attorney to operate the facility. it would never be disclosed he was an owner. his loss of favor shows how an offshore entity could have saved his reputation and allowed him to have a profitable business, despite his own religious view points and those of the general public. offshore planning can help in situations like that. so consider it depending upon your own scenario or those of your clients. good luck


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/21/2009 1:51:30 AM

By: Offshore Atty

I recommend that a client go offshore only if he cannot obtain domestically what he can offshore. For most clients, this means that they would only go offshore for asset protection reasons.

Asset protection should not be understated in this day and age. Killing or paralyzing someone in a traffic accident around the corner from one's house can lead to massive liabilities. With insurance costs skyrocketing, most people -- even of substantial means -- cannot possible purchase more than a few hundred thousand dollars worth of insurance cover. This means that anyone with a few million in the bank is driving around with a bulls-eye on his forehead.

Domestic asset protection plans don't work. Period. On the other hand, for a modest cost, migrating the assets offshore into an asset protective structure with a third-party custodian (such as a major Swiss bank) yields tremendous results.

The efficacy of such planning in relation to potential contempt proceedings in the domestic courts was the subject of much debate over the past two decades. Several bad actors found themselves at the bad end of contempt rulings in the U.S. courts. However, with the Grant v. US rulings in 2006 and 2008 (contempt cannot be found merely due to refusal of offshore trustee to repatriate trust assets), offshore APTs have gained a tremendous advantage over similar domestic strategies.


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/20/2009 5:55:29 PM

By: David S. Lesperance

As I tell all my clients, when contemplating whether instituting an offshore solution makes sense FOR THEM, I always tell them to use "The Rule of Three". I.E. The value of the benefit gained should be at least three times the cost of setting up and maintaining the structure. Once the benefit exceeds the rule of three, the question changes from "Should I do this?" to "Why aren't you doing this".

Therefore possible benefits include:

a) tax savings (e.g. if combined with an expatriation strategy);

b) asset protection (not only 3rd party liability but also future potential matrimonial claims);

c) consolidation of international family holdings for administrative and succession planning purposes;

d) concerns about the future ability for Americans to domestically access or hold certain types of assets (IOW: currency and gold controls); and

e) concerns about U.S. legislators constantly changing the rules (Note: This is a major concern that my clients note as one of the reasons they chose to contemplate expatriation).

I am sure there are others that can be added by other posters.

David S. Lesperance
Barrister and Solicitor


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/20/2009 4:12:34 PM

By: A few reasons

Offshore planning certainly makes sense for those with true international families, i.e., you want ultimate title to things consolidated into one trust in one country instead of spread out around the globe requiring many diverse court actions to administer the estate.

Offshore planning can still make sense if you have international business interest and you can take advantage of tax treaties, etc.

David, as you have pointed out, offshore planning can make sense for those who are legitimately interested in expatriation.

But for the vast majority of people with wholly domestic families and wholly domestic businesses, they should be finding good domestic tax attorneys to structure their affairs and forget about offshore anything.


Anonymous
Posted: Saturday, August 13, 2011

Posted: 9/30/2009 4:17:10 PM

By: ffbkdavid

... well, and what's with your BOAT nobody will insure if it's not "properly" registered... concrete in a jurisdictions that ASKS SOME TECNICAL QUESTIONS - f.e. the marshall islands

if one lives in a country far away from the sea i don't think he could get the know-how from a local "registrar" - probably even not existing (as nepal f.e. - to run his yacht

there are more +problematic" investments... not suitable for a general public as they are associated with "personal relationships"... if you know what i could mean

ffbkdavid


 

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