Monthly Archives: April 2016

If an asset is owned by an “Offshore” Company (and especially if that Company is registered in a privacy haven) it can be very hard to seize the asset or the Company (ie if a judgment is entered against you and you are the underlying beneficial owner of the Offshore that has received the asset). This is so on 2 counts:

(a)   Foreign judgments are rarely recognized by “Offshore” Courts; &

(b)   Generally the judgment creditor would need to be able to prove that you are the underlying beneficial owner of the Offshore Company (which would be all but impossible to do if the Company is registered in a privacy haven ie somewhere which has no public register of directors or shareholders or beneficial owners).

What you would need to be wary of however is the possible impact of onshore Insolvency Laws. For example in most developed countries:

(a)   any transfer of assets within 6 months of you going bankrupt can be overturned and the asset clawed back by the Bankruptcy Trustee

(b)   a transfer of an asset where the primary purpose of the transfer was to defeat a creditor can be overturned and the asset clawed back by the Bankruptcy Trustee at anytime (ie regardless of when the asset was transferred).

That said the claw back power only pertains to the initial transfer of the asset (eg from you to the Offshore Entity). So what you would want to do is ensure that the asset is transferred through 2 sets of hands ie from you to Offshore Entity One and From Offshore Entity One to Offshore Entity Two.

Why so?

Because the Bankruptcy Trustee should have no power to overturn the 2^nd transfer of the asset.

So if you live in a country which has this model of Insolvency Law you will want to set up 2 Offshore Entities and transfer your at risk assets from you to Offshore Entity 1 and then from Offshore Entity 1 to Offshore Entity 2.

(and for maximum security the smart thing to do would be to set up the 2 Offshore Entities in different countries).

As always local laws can have an impact, so be sure to seek local legal/tax/financial advice before committing to set up an Offshore Company for such purposes.

Commodity Brokering is an activity which lends itself well to Offshore Corporate Structuring.

A Commodity broker is a person or firm who endeavours to connect commodity suppliers or manufacturers with would be purchasers (and/or vice versa).

When such a transaction is successfully completed (ie when the purchaser receives delivery of the commodity) the Broker (ie the middle man) charges a fee which is usually a percentage of the contract price.

If you are a Commodity Broker looking to move Offshore here’s how it would work for you: 

• You set up a zero tax International Business Company (“IBC”)
• The IBC enters into a procurement contract with the supplier (or purchaser as the case may be)
• You are appointed as the IBC’s authorised representative (ie you are authorised on behalf of the IBC to source suppliers and or purchasers and negotiate commission rates etc. )
• The source of the IBC’s income is/would be the procurement contract which would be signed Offshore + the situs of the Contract would be expressed in the agreement as being “Offshore” (ie the nil, tax jurisdiction where your IBC is incorporated).
• Thus from an International Taxation Perspective the IBCs trading profits are generated in a nil tax environment tax free/offshore (ie provided the IBC is structured properly)
• When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of profits generated)
• That living/spending money can be paid to your local bank account (which means it would be assessable income wherever you are ordinarily resident for tax purposes though you should also be able to claim a sizeable amount of allowable deductions eg for home office, car, equipment, insurances, travel, stationary etc etc to reduce the amount of your “taxable” income at home)
• If you don’t want the authorities to know how much money you are earning by way of wages you could use an anonymous ATM or Debit/VISA card to withdraw your wages from an Auto Tele Machine
• The majority of trading profits could be reinvested Offshore potentially tax free.

As always local laws can have an impact, so be sure to seek local legal/tax/financial advice before committing to set up an Offshore Company for such purposes.