The tendency to protect financial affairs and achieve the highest degree of confidentiality started at the beginning of the 20th century, and nowadays more than the half of the world’s capital is kept offshore.
In the simplest sense, offshore jurisdictions are states, territories or countries that provide competitive legal and financial structures for the use of foreign individuals and companies outside of their primary jurisdiction. In other words, going offshore is taking your business and your money elsewhere other than your own country for beneficial purposes.
For example, for a French citizen BVI is an offshore country, but for a BVI resident France is an offshore jurisdiction. Obviously, in terms of tax benefit maximization, BVI provides major advantages over France. That is why it is of a vital importance to address your financial consultant in order to find the jurisdiction that best fits your goals and objectives and that will help you achieve the most advantageous solutions exactly to your needs.
Offshore jurisdictions today tend to be looked upon unfairly. Firstly, an offshore jurisdiction is not always a small tropical island but can be any country that is not a person’s or company’s country of residence. Clearly, the effective business and asset protection opportunities of today are international, and the use of offshore services is a must in almost every case. Secondly, in the last few years, offshore jurisdictions have significantly changed their legislation, adapting to international requirements and standards that aim to prevent financial fraud and money laundering while at the same time providing a high level of confidentiality.
Asset protection has become an unavoidable element of effective wealth management strategies, which ensure a high level of confidentiality, asset value maximization, and tax and profit optimization, as well as providing effective retirement plans. A holistic approach for your asset management plan is a must in order to secure you a safe and cost-effective fiscal position.
Moving or registering and managing your assets abroad is one of the basic steps essential for a good asset protection strategy. However, not all foreign countries and offshore jurisdictions are able to provide a desired level of confidentiality and tax optimization. Often, it may be effective for you to become a citizen and/or resident of a foreign country in order to protect your assets and reach your financial objectives. It is important to receive professional consultancy advice and local assistance in choosing the right country and to take you through the process in the most time- and cost-effective manner. A wealth management strategy with an integrated asset protection scheme abroad will allow you to make short- and long-term investments in the most cost- and tax-effective ways, thus enhancing your financial status and meeting your financial goals.
Offshore jurisdictions are usually called tax havens, no tax jurisdictions or fiscal paradises. There are more than 80 offshore jurisdictions that provide taxation advantages, high levels of privacy and other business benefits. However, it is important to remember that each jurisdiction has its own rules and norms to follow which are necessary to know and understand. It is a mistake to believe that “there are no taxes in an offshore jurisdiction.” While there are some countries where direct taxes are absent, in other countries taxes are due to be paid in various sectors and for various reasons – although those taxes are still lower than those of an onshore country. Of course, as any country, offshore jurisdictions need revenues and often high indirect duties such as import duties are characteristic to them. As such, it would be more accurate to refer to offshore countries as low-direct-tax jurisdictions, because indirect taxes are still applicable almost everywhere.
A company incorporated in such a tax favorable environment should apply for a tax exempt status available in a concrete jurisdiction, as it will let the company pay a nominal amount of money on the annual basis instead of paying taxes on revenues as it often is practiced in high tax jurisdictions.
Moreover, offshore jurisdictions are exempt from exchange control regulations that can significantly facilitate business activities. Freedom of movements of funds accompanied with moderate costs and asset protection are the important aspects of the offshore environment attraction to always a bigger amount of potential clients.
There is a mistaken idea of an offshore environment as mysterious, illegal, dangerous or unregulated. All offshore, just as onshore countries, have their own legislation and jurisprudence that is necessary to know well in order to follow all the laws in the appropriate way and conduct a business on 100% legal basis. Diverse countries provide different opportunities and advantages to different companies and business ideas. It is important to explore, analyze and choose the one that suits you in the most appropriate way, but any business can find its own advantages offshore.
When you work with an international fiduciary consultant for the above-mentioned purposes, you will discover that it is a continual process of interaction and communication between you and your chosen consultancy company. The best strategies are worked out within a dialogue and as a result of careful attention to your personal goals, interests, and objectives. Your fiduciary should be able to answer all your questions and explain why a particular strategy is better than another one and why a particular offshore jurisdiction has been chosen. It is important that your fiduciary has an international presence and operates directly, without intermediaries, in several countries, therefore having the necessary knowledge and expertise to be able to use a range of international opportunities rather than offer a standard solution to every client.