We are often asked Can you set up an Offshore Company for me without my name being listed in any official record as beneficial owner of the Company?
The short answer is this is possible. And the solution is somewhat left field. Let us explain…
Typically, clients who are privacy focused like to deploy a Nominee Director and Nominee Shareholder. But the downside of that is, even if you have a nominee shareholder in place, you would still be classified at law as the underlying beneficial owner (“UBO”) of the Company. The solution is to set up a Private Foundation to act as the shareholder of your tax free Offshore Company.
The Private Foundation is basically Europe’s version of a Trust (Foundations began in Liechtenstein around about the 1600s) save for one big difference (see below). A Trust is more like a contract between 2 parties ie the person who set up the Trust, called the Settlor, and the person set up to manage it, ie the Trustee (The Trustee manages Trust property for the benefit of the Trust’s beneficiaries). A Trust is NOT a separate legal entity. For example if a Trust buys a piece of real estate on the Title Deed the name of the proprietor says XYZ Trustees Ltd as Trustee for the ABC Family Trust. In other words the legal owner of the property is the Trustee. But the beneficial owner/s of the property is/are the beneficiary/s of the Trust.
A Foundation is similar to a Trust ie it’s a 3 headed creature – its set up by a person called a Founder (like a Settlor in the case of a Trust), is managed day to by a person called a Councillor (which is more like a Company Director than a Trustee) and, like a Trust, it has beneficiaries ie persons who are ultimately designed to benefit from the existence of the Foundation.
BUT, and here’s the key….
A Foundation (unlike a trust) is a separate legal entity ie it can sue and be sued. AND, at law, a Foundation is presumed to be both the legal AND beneficial owner of any asset it holds!
One jurisdiction has even taken this a step further ie Seychelles which has actually codified this aspect of European Common Law ie written it into legislation – in Section 71 of the Seychelles Foundations Act (refer pages 48 + 49 of the Act which can be downloaded via this link: https://seylii.org/sc/legislation/act/32-2) it actually says that the legal and beneficial owner of any asset held by a Seychelles Foundation IS THE FOUNDATION ITSELF.
The end result?
If you set up a Seychelles Foundation to own the shares of your Offshore Company or IBC if anyone (eg a bank or revenue authority or regulator) ever asks who is the beneficial owner of this Company, you can legally say it’s the shareholder, because the shareholder is a Seychelles Foundation and Section 71 of the Seychelles Foundations Act which you’ll find enclosed (ie DO email them a copy of the legislation) provides that the legal and beneficial owner of any asset held by a Seychelles Foundation IS THE FOUNDATION ITSELF.
If you wanted to be extra careful/private you could utilize the Discretionary nature of a Foundation (ie beneficiaries can be changed at any time) to make the initial beneficiary of the Foundation a tax free International Charity (eg UNICEF, The International red Cross, Oxfam or?) or you could install a (nil tax jurisdiction resident) “nominee” beneficiary to act as the initial beneficiary (which is a service that some Corporate Service Providers, including OCI, can provide).
Would you like to know more? Then please Contact Us: