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Offshore Trust: What is it and what are its advantages?

2020-01-08
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Financial experts claim that there was no economic crisis in the foreseeable past that could be compared to the future. In such a situation, questions about how to earn and, especially, how to preserve and multiply previously accumulated capital are particularly acute. One can either put them under a minuscule interest or open an offshore trust.

What is an offshore trust

Trust is a legal form of companies that originated in the 12th century and are expressed in the conclusion of a trust agreement between the parties in the transaction. As a rule, there are three parties involved. Founder (the settlor) transfers some assets (any property) to the manager or trustee, that competently managed those assets, and transferred profits from the activities of a third party (the beneficiary). That is, the beneficiary has no legal rights to the property transferred to the trustee, but receives profits from its use by the trust.

It turns out that an offshore trust is a company of the appropriate legal form, registered in an offshore zone.

Types of offshore trusts

  • Fixed. Powers and obligations of participants are clearly stated in the memorandum of association;
  • Discretionary. The circle of beneficiaries is not clearly defined and can change at the discretion of the founder;
  • The testamentary. The property after the entry into force of the will passes into the ownership of the manager, who works with it in accordance with clear instructions;
  • Irresponsible. The trust agreement may not be canceled under any circumstances;
  • Recallable. Presupposes careful control of the manager over the activities of the trustee and the opportunity to terminate the cooperation at any time.

Opening an offshore trust in 2020 may be the best solution for those seeking to increase their savings and create some kind of "financial cushion" for their family because its main difference from the traditional trust is a high level of confidentiality and integrity.

The advantages of an offshore trust

  • Absolute inviolability of assets transferred to trust management. They cannot be withdrawn even by creditors by court order;
  • The founder of an offshore trust withdraws all legal liability related to the subject matter of the contract (including tax and debt obligations) upon conclusion of the contract;
  • Assets transferred to the management of an offshore trust do not become the property of the legal entity but rather have a special status, allowing the beneficial owner to keep them safe in any conditions;
  • The founder and the beneficiary can be the same person;
  • The business structure of an offshore trust allows for certain types of commercial activities and opening corporate bank accounts.

IT-OFFSHORE specialists will help you to understand all the nuances of the procedure of such company creation.

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