Banking offshore can be complex, but it doesn’t have to be.

Recently we came across a few readings that we wanted to share. Many don’t understand the concept of going offshore with your banking or asset-protection plan. Some think there is something mischievous or underhanded about it. But that is not the case at all–or at least it shouldn’t be. There are many reasons to go offshore, and most notable of these is to protect yourself and what you have worked hard to build. Frivolous lawsuits in America can affect you at any time, especially if you are a property owner or business owner of any kind–and especially if you own rental properties. Altogether, according to a report by the Council of Economic Advisors, U.S. liability suits come to more than double the average cost in other industrialized nations (http://www.philanthropyroundtable.org/topic/excellence_in_philanthropy/american_justice_partnership).

Bank Vault Door-harbor Financial Services Offshore
Harbor Financial Services Offshore

The point here is not to scare you, but to mention the reality that asset-protection is often needed. In doing this though, review some of the points that we found most poignant in this Forbes article. While the article was written about 5 years ago, the points mentioned here are more relevant today than they were then–particularly regarding taxes and penalties concerning reporting. Often going offshore can add a level of complexity, but with a little planning and organization we assure you that the strategy and management of your wealth can be protected even better, with little to no need for added complexity. Reviews of your asset protection plans on a regular basis are recommended, and proper expertise greatly advised to assist you along the way.

Offshore Planning & Asset Protection

Offshore planning involves developing a strategy for establishing legal entities in favorable foreign jurisdictions. The purpose of offshore planning is to provide protection of assets from third-party claims.

Benefits

The primary benefit of offshore planning is that it allows investors to avoid third-party legal judgments. Offshore planning works, foremost, because certain offshore jurisdictions do not recognize U.S. court-rendered judgments. In order for legal clams to attach to banking and investment assets located in such jurisdictions, a creditor must file a lawsuit against the defendant in a foreign court.

The secondary benefit offered by offshore planning is that offshore jurisdictions have relatively shorter statutes of limitation on fraudulent transfers over their domestic counterparts. Domestic asset protection is often susceptible to a creditor’s allegations that the debtor has transferred assets, or has converted one type of asset to another asset, in an effort to defraud or delay creditors’ collections. Almost all U.S. states have a statute of limitations that runs for four years, which means that a creditor’s attorney can attach claim to a debtor’s assets up to four years after the transfers have taken place.

One who waits until they are sued to begin asset protection planning find their initial efforts, at least, challenging. Yet, in tax havens or offshore jurisdictions, the courts have statutes of limitations on fraudulent transfers of only two years. The shorter statute of restrictions makes it easier for debtors to delay judgments until after the statute of limitations has expired.

Asset Protection Trust

The principal legal tool involved in offshore planning is the offshore asset protection trust. The offshore trust resembles a typical U.S. trust except that the offshore trust is a “self-settled trust” where the settlor and the beneficiary are one and the same. The trustee is a person nominated by the settlor and is either an individual who is not a U.S. citizen or a business with no U.S. offices or affiliations.

An offshore asset protection trust will have additional people serving as trust advisors or trust protectors. These are individuals not under the settlor’s control who have certain powers in the administration, but who have no beneficial interest in the assets and property of the trust. Moreover, in extending the benefits of asset protection, offshore trusts provide a means of transferring assets between inheritors free of probate or proof of validity.

Upon the death of a settlor, the trust usually provides that assets pass automatically to named successor beneficiaries.

Offshore planning provides more investment flexibility for offshore trustees than their domestic counterparts who are subject to greater legal restrictions in their home countries.

 

Harbor Financial Services (HFS)

Harbor Financial Services is a professional company that provides offshore financial advice and investment services to its clients. HFS recommends offshore products and services to suit any personal and/or business need. The company has helped clients find solutions to meet their long-term financial needs. HFS has the experience and the expertise to create the best offshore package for you. Visit http://www.hfsoffshore.com for more information about the company’s products and services.

 

Disclaimer: Many countries have laws regarding offshore entities and accounts. For example, citizens that form offshore entities, (for example an offshore corporation, offshore trust, offshore partnership, offshore limited liability company, etc.) own stock in offshore entities or hold positions within offshore entities may need to file a tax return. Citizens that form an offshore trust, move assets into an offshore trust or are the beneficiary of an offshore trust may need to file a tax return. Citizens that sign on offshore bank accounts or offshore investment accounts may need to disclose this fact to their government and pay taxes on any interest or capital gains. We strongly recommend consulting with a local, licensed professional to obtain tax and legal advice in order to understand the law and to fully comply with all applicable laws and reporting requirements regarding offshore companies, offshore trusts, offshore bank accounts and offshore investments.

Reasons for Opening an Offshore Banking Account

One of the notions regarding an offshore banking account is that it is only for the very rich people. This notion is only true in the sense that most wealthy investors tend to prefer depositing their funds in an offshore account for privacy reasons. In reality, an offshore banking account is very economical. The average individual, rich or working class, can open an offshore account. The process of opening an account is no different from the process at a local, traditional bank. An offshore banking account is just an account that you open in a country or jurisdiction outside of your own. Selecting the right offshore bank and jurisdiction is the first step toward developing a successful offshore banking relationship.

The most evident reason for opening an offshore banking account is the cash-flow advantage. Investors gain interest on their deposits, which are not subject to standard withholding tax typically imposed on traditional banking accounts. One of the numerous benefits of opening offshore banking accounts is that they are often situated within tax havens, reducing or eliminating the heavy tax burden charged to the depositor.

As technology advances, offshore banking institutions continue to offer their customers even greater benefits. Offshore banking accounts come with a standard debit card that depositors can use to withdraw funds anywhere in the world. Offshore accounts offer additional protection for depositors who seek to protect their money from third parties. Investors can transfer and move their money from one account to another, tax-free, without incurring additional charges.

Offshore accounts provide depositors with privacy and asset security. The following represent some additional reasons for opening an offshore banking account.

1. Investor Privacy

One of the significant reasons for opening an offshore bank account involves investor privacy. An offshore account allows an investor to deposit funds anonymously and avoid heavy taxation from resident jurisdictions. With this type of account, depositors can avoid lawsuits from third parties. An offshore banking account is a popular choice for individuals who want to preserve their privacy.

2. Investment

Banking professionals consider selecting an offshore banking account as a way for an investor to diversify his investment portfolio. Depositors who invest in an offshore banking account receive high returns and tax savings globally. Investors gain access to a wide range of global banking services and investment opportunities. They are afforded better currency rate conversions. They also don’t incur the same tax burdens of their home country.

3. Legal

Opening an offshore banking account will require the investor to select a law firm with experience in offshore financial services and international business. Law firms that specialize in drafting agreements for offshore financial packages will provide timely services at an affordable cost to the investor.

4. Banking Services

Offshore jurisdictions with a tax-free structure are the first to offer offshore banking services. Many offshore banks offer a full range of private banking products, but have certain terms and conditions that investors must meet. An offshore banking account provides the greatest protection for corporations and helps clients meet the needs of its customers.

5. Visa

Offshore banking institutions offer traditional services to their investors. An offshore account comes with a standard debit card with a Visa or MasterCard logo. In case the card is lost or stolen, the investor doesn’t have to worry about identify theft because the identity of the investor is not disclosed on the card. The investor doesn’t have to provide an address, a date of birth, or a tax identification number as a prerequisite for opening an account.

Offshore banking has many advantages, some of which include the access to politically and economically stable jurisdictions and lower costs. Investors receive a higher rate of return on their investments. Offshore banking is an aggressive wealth and long-term financial growth strategy.

Harbor Financial Services (HFS)

Harbor Financial Services is a professional company that provides offshore financial advice and investment services to its clients. HFS recommends offshore products and services to suit any personal and/or business need. The company has helped clients find solutions to meet their long-term financial needs. HFS has the experience and the expertise to create the best offshore package for you. Visit www.hfsoffshore.com for more information about the company’s products and services.

 

Disclaimer: Many countries have laws regarding offshore entities and accounts. For example, citizens that form offshore entities, (for example an offshore corporation, offshore trust, offshore partnership, offshore limited liability company, etc.) own stock in offshore entities or hold positions within offshore entities may need to file a tax return. Citizens that form an offshore trust, move assets into an offshore trust or are the beneficiary of an offshore trust may need to file a tax return. Citizens that sign on offshore bank accounts or offshore investment accounts may need to disclose this fact to their government and pay taxes on any interest or capital gains. We strongly recommend consulting with a local, licensed professional to obtain tax and legal advice in order to understand the law and to fully comply with all applicable laws and reporting requirements regarding offshore companies, offshore trusts, offshore bank accounts and offshore investments.

U.S. Citizens and Offshore Asset Protection Trust

Overview

United States citizens can utilize offshore trusts and banks, because each citizen must report foreign income. Taxable foreign income includes interest, dividends, and capital gains earned or accrued offshore and domestically. The U.S. government allows its citizens to transfer funds to offshore accounts, but it requires full disclosure of the type of asset and how much a citizen is transferring offshore. The U.S. also employs special task forces and government agencies that are committed to preventing money laundering and tax evasion. The government makes it clear that U.S. citizens must comply with all taxation and reporting requirements.

Common Myth

There are many companies that claim to be able to offer offshore solutions to U.S. citizens, but this claim is not true. The U.S. taxes foreign income. Therefore, it is unlikely that the service a company advertises applies to a U.S. citizen. Even worse, the company contributes to the U.S. citizen breaking their home country’s law.

Benefits

Offshore trusts offer an individual a fair degree of personal confidentiality, financial privacy, and asset protection from lawsuits and creditor claims. Some claims may be due to a spouse filing a divorce suit or a business client attaching a lien against real property.

When properly structured, offshore asset protection trusts offer degrees of financial protection from current and potential claims. There are additional benefits to U.S. citizens forming an offshore asset protection trust. The following represent some common benefits:

  • Personal Protection: Customers can use any form of asset protection trust, whether employed domestically or abroad, to protect their assets from personal and/or professional litigation. They may also use a trust to protect assets from creditor liens.
  • Home-Country Advantage: A U.S. citizen can use an offshore trust to protect their assets whether they form the trust in their home country or offshore. The added benefit is that the trust can remain with the individual in the U.S. In other words, the assets of an offshore trust usually remain under the indirect control of the settler.
  • Fixed Term: Offshore trusts are usually “irrevocable” for a set term. During that period, the settler can not be a direct beneficiary of the trust.

These are just three of the most common benefits to forming an offshore trust.

 

Tips to Remember

Many U.S. experts on this topic advocate structuring foreign trusts, so the trust can be taxed domestically as a grantor trust.

When a legal expert structures an offshore trust correctly, creditors, or anyone suing the settler, will be powerless to attach a claim to the assets of the trust.

If a legal expert has structured the offshore asset protection trust to end by a certain period the assets can be returned to the control and direct ownership of the settler. This can only happen provided there is no current or ongoing threat.

When it comes to employing offshore solutions, such as an offshore trust, there are many opportunities for U.S. citizens to benefit from asset protection planning.

 

Harbor Financial Services (HFS)

Harbor Financial Services is a professional company that provides offshore financial advice and investment services to its clients. HFS recommends offshore products and services to suit any personal and/or business need. The company has helped clients find solutions to meet their long-term financial needs. HFS has the experience and the expertise to create the best offshore package for you. Visit http://www.hfsoffshore.com for more information about the company’s products and services.

 

Disclaimer: Many countries have laws regarding offshore entities and accounts. For example, citizens that form offshore entities, (for example an offshore corporation, offshore trust, offshore partnership, offshore limited liability company, etc.) own stock in offshore entities or hold positions within offshore entities may need to file a tax return. Citizens that form an offshore trust, move assets into an offshore trust or are the beneficiary of an offshore trust may need to file a tax return. Citizens that sign on offshore bank accounts or offshore investment accounts may need to disclose this fact to their government and pay taxes on any interest or capital gains. We strongly recommend consulting with a local, licensed professional to obtain tax and legal advice in order to understand the law and to fully comply with all applicable laws and reporting requirements regarding offshore companies, offshore trusts, offshore bank accounts and offshore investments.

Safer Options to Protecting Your Assets

Asset protection plans are now a widely-requested service for many investors, brokers, and business owners. With today’s economy and business environments, it’s no wonder that many are moving their assets to offshore accounts to ensure that personal and business assets are constantly protected and safe.

There are two types of assets that many have tried to conceal from regulatory bodies, permanent and movable.

Permanent Assets

This category of assets includes real estate, business buildings, homes, and other property types. Such assets are not physically mobile and in order to escape taxation, many have tried transferring these assets to other family members or relatives.

Movable Assets

Movable assets include cash, stock and securities, bonds, and other investment portfolios. The Internal Revenue Service (IRS) requires that all activity, gains, interest, and dividends be reported on an annual basis for the purposes of tax reporting.

In an attempt to conceal earnings and capital gains, many have been audited and penalized by the IRS and other governing bodies. These penalties are usually heavy and unnecessary.

Asset Protection Plans

Asset protection plans allow individuals and businesses to effectively and honestly secure their financial assets from coming under the hands of creditors or other predators in lawsuits. Asset protection plans are legal ways of protecting your assets without having to conceal or hide any of your investments and capital ventures.

Experienced and knowledgeable consultants in the offshore banking industry can assist you in developing ideal strategies and plans to help you grow and maintain all your personal and business assets. You too can create valuable solutions to securing and developing your financial needs.

Harbor Financial Services (HFS)

Harbor Financial Services is a professional company that provides offshore financial advice and investment services to its clients. HFS recommends offshore products and services to suit any personal and/or business need. The company has helped clients find solutions to meet their long-term financial needs. HFS has the experience and the expertise to create the best offshore package for you. Visit http://www.hfsoffshore.com for more information about the company’s products and services.

 

Disclaimer: Many countries have laws regarding offshore entities and accounts. For example, citizens that form offshore entities, (for example an offshore corporation, offshore trust, offshore partnership, offshore limited liability company, etc.) own stock in offshore entities or hold positions within offshore entities may need to file a tax return. Citizens that form an offshore trust, move assets into an offshore trust or are the beneficiary of an offshore trust may need to file a tax return. Citizens that sign on offshore bank accounts or offshore investment accounts may need to disclose this fact to their government and pay taxes on any interest or capital gains. We strongly recommend consulting with a local, licensed professional to obtain tax and legal advice in order to understand the law and to fully comply with all applicable laws and reporting requirements regarding offshore companies, offshore trusts, offshore bank accounts and offshore investments.

Offshore Banking: A Defense Tool

Offshore banking has been seen as a taboo among many new to business. Contrary to what the common misconception is, offshore banking is not illegal and instead provides many companies a Safe Haven from heavy taxing and risk of asset loss through law suits or debt.

Offshore banking offers several benefits including,

  • Greater privacy and anonymity
  • Nonrestrictive regulations and easy access to deposits
  • Protection against financial, political, and local instability
  • Low or no tax on business revenue and deposit interest
  • Low or no tax on personal assets; secure account exempted from tax assessments

The most important benefit that offshore banking provides is that the account is strictly private and protected from creditors, and other interested parties. Offshore jurisdictions typically exempt offshore companies from paying taxes.

Choosing offshore banking is a legal right for both private citizens and businesses. Offshore banking is a proven option for securing your assets no matter where you might be.

Tips to Remember

When choosing a destination for offshore banking, look for stable countries and strong economies, and a developed financial and economic sector. A jurisdiction with a good reputation is as important for security as it is for offshore banking.

Several great offshore banking locations include Bermuda, Swiss, British Virgin Islands, Panama, Austria, and the Isle of Man.

You can find more details on Offshore baking and preferred locations by clicking here.

 

Harbor Financial Services (HFS)

Harbor Financial Services is a professional company that provides offshore financial advice and investment services to its clients. HFS recommends offshore products and services to suit any personal and/or business need. The company has helped clients find solutions to meet their long-term financial needs. HFS has the experience and the expertise to create the best offshore package for you. Visit http://www.hfsoffshore.com for more information about the company’s products and services.

 

Disclaimer: Many countries have laws regarding offshore entities and accounts. For example, citizens that form offshore entities, (for example an offshore corporation, offshore trust, offshore partnership, offshore limited liability company, etc.) own stock in offshore entities or hold positions within offshore entities may need to file a tax return. Citizens that form an offshore trust, move assets into an offshore trust or are the beneficiary of an offshore trust may need to file a tax return. Citizens that sign on offshore bank accounts or offshore investment accounts may need to disclose this fact to their government and pay taxes on any interest or capital gains. We strongly recommend consulting with a local, licensed professional to obtain tax and legal advice in order to understand the law and to fully comply with all applicable laws and reporting requirements regarding offshore companies, offshore trusts, offshore bank accounts and offshore investments.