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How Offshore Asset Protection Works

Protecting your assets offshore means controlling your assets through a business instrument in a foreign jurisdiction with more favorable laws. Just like a “tax haven” jurisdictions renown for favorable banking privacy laws, you can take advantage of asset protection jurisdictions. These offshore jurisdictions create a significant protective barrier between creditors and judgments, and your assets.

Offshore asset protection comes in many forms and you choose your instrument(s) based on what you have to protect and it’s value. It’s very important to speak with a qualified offshore asset protection professional before choosing what’s right for you. Protection vehicles range from watertight privacy, to bulletproof protection and in many cases a combination of jurisdictions are implemented to maximize both privacy and protection.

1. Avoiding a lawsuit
Lawsuit avoidance is as good as money in the bank. In a lawsuit, the only real winners are attorneys. Even the prevailing party incurs legal costs and the ordeal can be a time-intensive distraction. A lawsuit avoided is almost always a far more favorable outcome than a courtroom victory. The first step in offshore asset protection is financial privacy. Experienced creditors choose their targets wisely and before mounting a suit your opposing party has probably performed an asset search to find what’s within reach if a judgment is awarded. When your assets are in the open and easily found by hungry creditors, you are a prime candidate for a lawsuit. Once you have moved your financial picture behind a layer of privacy, an asset search is going to come up empty. Financial privacy is your first line of defense. This can be achieved by utilizing offshore jurisdictions for asset protection.

2. Judgment Proof
If the need ever arises to be judgment proof, there are asset protection vehicles available in jurisdictions with longstanding histories of providing strong protection for investors. The strongest legal tool is an offshore asset protection trust in the Cook Islands. Foreign judgments are not recognized and licensed bonded trustees are not subject to U.S. law. Because they reside outside of the US, they are not required to comply with US court rulings. When your assets are properly held within a well-established offshore trust with provisions for legal duress, you comply with U.S. law completely and your trust provisions safeguard your assets. The trust owns 100% of a foreign limited liability company (LLC). You can maintain control as manager of the offshore company that is owned by a trust. When you are under legal duress, a foreign trustee can jump in as the manager of your company and is strictly bound to follow the trust and company management provisions to run the day-to-day activities of your company. Your assets remain safe while you are under legal duress, and once it is over, you are then appointed as your company manager.

  • Tax Haven – This term indicates little to no income tax in the jurisdiction. However, people in the US, UK and various other jurisdictions are taxed on worldwide income regardless of the tax environment of the chosen jurisdiction.