Protecting assets through a trust structure in 2022: Top countries

Protecting assets through a trust structure in 2022: Top countries

To protect your assets from creditors and reduce your tax burden, consider a trust agreement. This is the name of the agreement under which the owner (the founder of the trust) transfers the assets to the trustee to manage them for the benefit of the beneficiary. Thus, the settlor loses the right to his property, which allows him to avoid a lawsuit from creditors, law enforcement, and tax authorities. Read how to provide 100% protection in 2022 through a trust structure in this article.

Features of a trust structure

The trustee owns and disposes of the transferred property, fully complying with the rules clearly spelled out in the document. S/he also distributes the profits to the beneficiaries of the trust and gets paid for his/her work.

In most cases, a trust is set up for a fixed period of time. Less commonly, until the death of the founder. When the term expires, the assets are distributed as it was spelled out when the contract was entered into. For example, it can go back to the settlor or be distributed to the beneficiaries.

Benefits of trusts

  • Tax savings. The laws of many offshore companies allow the manager not to report information about the founder and beneficiaries to the tax authorities of their countries;
  • Opportunity to hide the income - registration of purchase or transfer of property to the trust allows the settlor to declare the absence of his/her assets, to claim for reduction of the tax rate, assistance from the government;
  • The ability to preserve the property, which becomes inaccessible to creditors, law enforcement agencies, as well as any claims to the division of assets (eg, in a divorce).

Where you can register a trust structure

We recommend choosing countries with zero taxation, the laws of which provide reliable protection of assets. All that remains, in this case, is to develop the structure and execute the documents correctly. Any mistakes are fraught with risks and complications.

The best jurisdictions for a trust structure are the following:

  • The Cook Islands are the strongest offshore asset protection. They are beyond the reach of creditors, and court orders issued in other countries are invalid. The statute of limitations on any legal claim is no more than 2 years. Other advantages to open a trust in the Cook Islands - all business transactions can take place electronically, and trust transactions are not publicly recorded;
  • Belize. Well-developed laws on trust structures in Belize have made the jurisdiction one of the best for the protection of assets. Registering a trust in Belize is permanently exempt from income tax on business, property, inheritance or gift. The trustee is not deemed a resident of Belize and is exempt from exchange control with respect to the trust property and related transactions;
  • In Nevis, privacy is at a very high level, and the owners of the company can not be traced. Offshore does not recognize the court decisions of other countries, so the registration of a trust in Nevis will suit the founders who are awaiting trial. The civil suits are considered only on the island in closed order, and the lawyer of creditors should be a local resident. The court fees should be paid in advance, and a pledge of $100k should be paid;
  • Luxembourg is one of the largest financial centers in the world. Fully foreign participation is allowed in an international trust. Non-residents who choose to open a trust in Luxembourg are exempt from taxes on all assets outside the country. Trust structures are not registered with the government, so information is not available to the public;
  • Jersey (La Manche) is on the list of leading jurisdictions in Europe for the registration of the trust. The trustee is registered as the owner of the company, and the trust itself does not need to register anywhere, which ensures anonymity. Jersey law will not protect a debtor who has loans at the time of creation of the trust, but will protect if they arise after this event;
  • The Cayman Islands is a major financial center with lawyers, bankers, and trust managers. With the exception of exempt trusts, trusts may not undergo registration in the Cayman Islands with the state authorities. Information concerning the trust structure and the settlor is strictly confidential, with few exceptions.

The choice of a jurisdiction depends on the nature of the assets, the size of the trust, the investment objectives, and the banks where the account will be opened. If you work in the EU, you can focus on Luxembourg and Jersey. If you want to invest in hedge funds, you should consider the Cayman Islands. If the risk of litigation is high, choosing Belize or the Cook Islands will be reasonable.

How to open a trust quickly in 2022

If you want 100% protection for your assets through a trust structure, contact IT-OFFSHORE.

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