Caribbean Financial and Offshore Blog - Financial

Initiation to Offshore Banking Terms

nospam@example.com (Terri Henry - Contributor) — Fri, 07 May 2010 06:35:29 -0500

Many investors are puzzled by the various terms used by bankers in
describing ways to protect their money. Here is a short list of some of
the most common ones.

Asset Protection Trust (APT) is an irrevocable trust, usually created
(settled) offshore for the principal purposes of preserving and
protecting wealth against creditors. Title to the asset is transferred
to a trustee. It is used for asset protection and usually tax neutral.
Its function is to provide for the beneficiaries of the APT. A trust is a
contract affecting three parties, the settlor (who sets up the offshore
trust; also called the grantor in U.S. or IRS terms), the trustee and
the beneficiary. A trust protector is optional but recommended, as well.
Through the trust, the settlor transfers asset ownership to the trustee
on behalf of the beneficiaries.

Business trust is created for the primary purpose of running a business.
These trusts are treated as persons under the Internal Revenue Code
(IRC). It must have a commercial purpose and actually function as a
business.

CARICOM is the Caribbean Common Market. Its members consist of 14 member
countries of the Caribbean community, including Antigua, Bahamas,
Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica,
Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent, Surinam,
Trinidad and Tobago. The purpose of this organization is to encourage
free trade and free movement of labor. Conspicuous by their absence are
the Cayman Islands and the British Virgin Islands, the two major players
in international banking and finance, which did not wish to be
regulated by a small local community because of greater international
ties.

Discretionary Trust is a grantor trust in which the trustee has sole
discretion as to who among the listed beneficiaries receives income
and/or principal disbursement. The trustee has full authority over the
fund, or it would cease to be a discretionary trust. A letter of wishes,
or side letter, can provide guidance to the trustee without having any
legal and binding effects. The letter(s) must be carefully drafted, as
the trustee cannot be seen as a pawn of the beneficiaries or there is
basis for the argument that there never was a complete renouncement of
the assets.

Estate is the sum of personal interests in real and/or personal
property.

Flight Capital is money which flows offshore and likely never returns.
It is exacerbated by a lack of confidence in government fiscal
management.

GmbH is a German form of a limited liability corporation.

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Saving Taxes with an Offshore Company

nospam@example.com (Katie - Contributor) — Thu, 11 Dec 2008 14:35:35 -0600

Saving on taxes is something almost everyone wants to do. However the majority of countries have tax laws that mean we must pay our taxes if we want to stay on the right side of the law. Yet there is a way to legally reduce the level of taxation you or your business are subjected to by forming an offshore company.

An offshore company is known officially as an International Business Company (IBC). Even though IBC’S are created in the world every day, many are still unaware of the advantages of forming one and worried that it may not be a legitimate way to save on taxes. But be assured there are multiple reasons why incorporating an offshore company could be of benefit to you and it is definitely a legal and very smart business move.

Incase there is still some confusion between the concepts of tax evasion and tax avoidance, let me explain. Tax evasion is the refusal to pay due taxes, by means that are considered illegal within the law. In contrast, tax avoidance refers to utilizing the provisions within the taxation laws of a country to one’s advantage so that savings on taxes can be made. It is the latter regard that forming an IBC will assist.

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Caribbean Banking Secure in Financial Crisis.

nospam@example.com (Terri Henry - Contributor) — Fri, 24 Oct 2008 06:00:00 -0500

The current economic crisis is leaving countries around the world in a devastated situation. French Prime Minister Francois Fillon recently described the financial world as being "on the edge of the abyss" and even after signing a $700bn (£394bn) financial sector rescue plan, President George W Bush has warned that the US economy continues to face "serious challenges". Global summits are currently being attended by world leaders to find solutions to the worst financial crisis since the 1930s.

However in the Caribbean region the banking system of the Eastern Caribbean Currency Union (ECCU) has so far remained stable and not affected by the unfolding crisis. The St Kitts-based Eastern Caribbean Central Bank (ECCB) recently released a statement, saying that “To date, the banking system of the Eastern Caribbean Currency Union (ECCU) has not been impacted by these events. The commercial banking system remains stable and adequately capitalised," The ECCB also indicated that they would be prudently monitoring the ongoing global situation and doing its upmost to remain in this fortunate position.
Continue reading "Caribbean Banking Secure in Financial Crisis."