Offshore Trust Formation is The Key!

Filed under: offshore

Offshore trusts can offer major benefits to many investors and other individuals with substantial capital assets. For example, a carefully established offshore trust can transfer a person’s investments to a vehicle which may permit the deferral or minimization of income taxes on investment income without contravening the tax laws of the person’s home country. There are other important benefits that may be derived from offshore trusts. Our local trust office will acts as a liaison between yourself and the offshore trustee, and we have experienced professionals located in tax havens and low tax regions. For offshore trustees, the distinction between capital and income is generally only important for tax purposes. Offshore trustees seldom need to balance the conflicting interests of income and capital beneficiaries, as in a trust where income is payable to A for life and capital is then to be distributed to B and C. Offshore trusts tend to be fully discretionary. Similarly, for investment purposes, offshore trustees seldom need to balance income and capital objectives.

An offshore trust is very much like a traditional trust in that it comprises  a relationship or arrangement entered into by a person or group designated to be the “Trustee,” and a distinct person or group of people designated the “Settlor,” by which provisions are made in a binding, written legal form known as the “Trust Deed,” in order to hold title to assets and property, to manage said assets in accordance with the trust deed, in order to provide a series of benefits and distributions to a person or group of persons designated the “Beneficiaries.”

Where to form an Offshore Trust
Offshore trusts are often formed in low-taxation or low-regulation havens that have a proven reputation for the successful management and execution of trusts and trust funds.  However, it is not absolutely necessary for a suitable location to be a tax haven or have lax regulations–many of the successful trust formation jurisdictions and countries simply offer renown, experienced trust companies coupled with superb confidentiality and with substantial asset shields.  One common denominator is that these jurisdictions base their trust regulations and statutes on the English common law–this because the very idea of trust formation is an old English idea dating back to the time of the Crusades. Other European jurisdictions that offer successful trust administration, such as Luxembourg, Malta, Switzerland, etc., have adapter their statutes and regulations to conform with the proper trust administration models set forth by those based on the English common law.

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