Combined Asset Protection Vehicles

October 26, 2017 - by Nida U.

  • Are you looking to preserve your wealth from political, economic or family related uncertainty?

  • Are you looking to transfer your wealth to your heirs in a tax-efficient manner?

  • Are you looking to plan your estate by maximizing benefits of your wealth for family members and others?

  • Are you looking to transfer of your wealth to your heirs following your wishes and not being bound to follow the laws of the country you live in?

  • Are you looking to consolidate the ownership of the assets you owe throughout the world in one location?

  • Are you looking to minimize or eliminate estate taxes that arise on the death of the settlor or founder?

Combined asset protection and estate planning vehicles can be used to achieve higher privacy and confidentiality, therefore we offer several solutions where a Trust or Foundation can be set up to hold shares of company, this way adding that extra layer of security.

As I explained in the video above, setting up regular IBC is fairly straight forward and easy procedure, but when it comes to the actual management of the company, it is much more complicated.

Because you have to take into consideration the following aspects:

  • "mind and management" of the company,
  • "location of the transaction for tax purposes" of the company.


A business company is considered resident for tax purposes in that country where its "mind and management" is located. For example, if an owner of BVI, Belize or Seychelles company lives in high tax country, e.g., UK, France, Sweden etc., manages (signs contracts, operates company bank account, issues invoices etc.) this company from there, then with these actions he creates, what taxman calls a "permanent establishment" of the company. Therefore creating situation, where according to tax laws, where this foreign company is being treated same as regular domestic business, and becomes subject to local taxation in this country( UK, France etc.).

"Location of the transaction for tax purposes" concept largely determines who (which country) can tax the profits, gains or value added in a certain business transaction - regardless of where the contracting parties come from. The "place of business" is determined by a multitude of conditions. Not only each country will have its own rules in this respect, but also there is not a single definitive recipe for resolving the "place of business" issue, since each business is different, and much will also depend on the place of permanent residence and domicile of the company owner.

The best way for an offshore company to remain tax free, this company must not only be registered in a tax haven but it must also be managed and controlled from a tax haven.

You can read more about “mind and management” (corporate residency) here.

Remember that all potential customers are recommended to obtain local, qualified tax advice from a specialist in the country of their residence, or where they domicile or even where their proposed business operations will take place.

You will probably have these two considerations and choices:

1. How to choose the right jurisdiction for company (IBC)?

There are about fifty countries in the world that offering various tax benefits to non-residents, thus promoting what is called offshore business. Some of those countries are extremely popular and widely perceived as offshore tax havens - like British Virgin Islands, Belize or Seychelles. Choosing the right jurisdiction will be entirely up to you, and there is no answer to which will be the best choice, you will need to consider geographical location, time zone, languages spoken depending on geographical location of you intended business.

2.How to choose between Foundation and Trust?

There are rather similar functions and reasons for establishing a Foundation or a Trust, the difference is the legal structure. The main difference is that Trusts historically originate from common law countries, e.g., England, USA and India, therefore are mainly used by these countries. While Foundation is a product predominant and understandable by the Civil law countries, e.g., France, Germany, Russia, Spain. In reality one can even say, allegorically, that Foundations are Trusts for the countries who do not understand Trusts.

Thank you for reading my post! And you are welcome to leave comments, feedback, suggestions for other posts or contact me for more information.

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