Caribbean Financial and Offshore Blog

When Two Business Entities Are Better Than One

nospam@example.com (Terri Henry - Contributor) — Mon, 07 Jun 2010 11:55:00 -0500

Most business owners know that they need to form either a corporation
or LLC to protect themselves from the risks associated with running
businesses in our modern world. Alas, most don't think through the
process to its logical end when evaluating these risks. As a result,
they often don't realize that they may need two, not one, business
entities.

Let's start with a simple question. Why do you form a business entity?
Yes, there can be tax reasons, but most form them to protect themselves
from the risks associated with being in business. These risks include
being sued for a ton of money or having creditors come after the company
to collect debts. Business entities are great at creating a shield
between you, the owner, and these debts. The question is whether that is
enough. For many businesses, it is not.

So, what is the problem? The problem is most of your valuable and
critical assets are actually owned by the corporation. This means they
are exposed to the risks of running the business. Consider an example. I
own a hosting company for websites. I incorporate it and business goes
really well. Everyone knows "Chapo's Hosting". I have a trademark, logo
and the whole nine yards. My servers get hacked in the first week of
December and all the sites of my clients are down for the first 10 days
of the month, the busiest on the web. I get sued for millions. While I
am not going to be personally liable, I am going to lose all my servers,
equipment, trademark and logo to the companies suing me. Once I lose
all of those, it is just a matter of time till I can't meet my personal
bills and lose my home, car and so on. We are talking about a nightmare!

Continue reading "When Two Business Entities Are Better Than One"

Benefits of a Second Passport

nospam@example.com (Terri Henry - Contributor) — Sat, 08 May 2010 11:58:00 -0500

A Second Passport?

Second citizenship can be something like a global insurance policy that
entails any individual to make use of the dissimilar parts of two
countries for a better set of options, most likely financially. It can
become quite apparent in small nations with a not-so-bright
socio-economic condition, where individuals often find it easier to make
a better living in another country. One that you can choose. Dual
nationality has always been held by wealthy people with a knowledge of
world history. They know of the dangers of placing an entire future in
the hands of politicians. Patriotism might be OK if governments were
consistent and let you be free. But socialistic Big Brother
bureau(c)rats now have the power to run your life from cradle to grave.
Most of them think that all people who own businesses. securities, gold,
foreign bank accounts or property are criminals who should be relieved
of them and what little freedom they still have left. It is therefore
imperative for the security of anyone of substance or ambition to have
at least one other passport and nationality.

A second passport can give you peace of mind. It can help save you
taxes. It also expands your travel opportunities. In some circumstances a
second passport could even save your life. Here more specifically are
some of the reasons someone might want a second passport.

Residence.

Residence gives you the right, without having to ask permission, to live
and work in the country of your choice.

Security.

"Just in case." The world is an unstable place. Anything could happen -
although it probably won't. Against the day when it might, however, a
second passport, or second nationality, means that when you decide
you're no longer happy in your normal place of residence, you do not
need to apply for
permission to reside somewhere else, because you already have the right
to do so.

Travel.

A second passport can make it easier for you to travel to many
countries, especially if you now hold a restricted passport such as a
Hong Kong Certificate of Identity, or a Taiwanese, Israeli or South
African passport. Depending on your choice of second passport, or second
nationality, the process of
gaining entry to many other countries can be made much more simpler.

Safety.

Even if you hold one of the world's most respected passports~ such as
that of a US citizen, there can be times when you wish you were able to
show some other piece of identification. For example: when the aircraft
in which you are traveling is hi-jacked by anti-American terrorists.

Business and work.

Another passport will more often than not give you the right to work and
do business in its country of issue without obtaining a work permit,
and similar advantages above and beyond those of your current national
status. Citizenship of a member state of the European Economic Community
gives you the right, under the Treaty of Rome, to live, work and/or
establish a business in any other member country of the EEC.

Continue reading "Benefits of a Second Passport"

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.

Continue reading "Initiation to Offshore Banking Terms"

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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The OPPLive Conference 2008

nospam@example.com (Katie - Contributor) — Mon, 10 Nov 2008 15:49:34 -0600

I’m packing my bags and getting ready to head for England! I’m not leaving my lovely island home forever, instead I am going to the UK to attend the OPPLive Conference in London, Nov 25-26th and give a presentation alongside CaribPro representative, Jason Kumpft. Our seminar entitled ‘Profitable Possibilities and Partners in the Caribbean’ will be held on 26th November from 11:00-12:00 in Theatre 3. The session will highlight the new opportunities that exist for both local agents and international partners in an exciting combination of real estate and offshore asset protection possibilities, including economic citizenship.

In the midst of the current global credit crunch, property professionals are seeking to charter their way into new territory. Industry leaders are eager to create new opportunities and make even smarter investments in the climate of financial caution. As a result, registration for this fourth annual OPPLive conference at the ExCel Centre is exceeding previous years. Delegates are already signing up for our presentation, which promises to offer insights into the emerging Caribbean development industry and strategic ways to maximize financial assets in the region, and we are certain that they will be highly satisfied.

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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.
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CARICOM Travel Pass Will Increase Benefits of Caribbean Citizenship

nospam@example.com (Terri Henry - Contributor) — Mon, 15 Sep 2008 12:34:05 -0500

CARICOM nationals and legal residents could soon be able to travel around the region with greater ease as a new CARICOM travel pass is set to be introduced next year. The pass will be a high tech card that will feature facial and finger printing biometrics and will allow holders to go through automatic gates rather than the regular immigration control.

The travel pass is part of an effort to unite the Caribbean region and to further develop the Caribbean Single Market and Economy (CSME). The news of the upcoming travel pass is also a further incentive for those who are thinking of investing in Economic Citizenship as the card will make the passage of nationals easier and faster and automatically entitles the holder to spend up to 6 months at their regional destination.

The islands of St Kitts & Nevis and Dominica are the only two places in the Caribbean still offering an Economic Citizenship program. This program entitles foreign investors to buy citizenship to the country, subject to the successful completion of security checks. The process of obtaining a second passport is relatively simple and takes 2-3 months.
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Caribbean Second Passports

nospam@example.com (Terri Henry - Contributor) — Tue, 27 May 2008 15:48:56 -0500

So you want to move to one of the Eastern Caribbean islands and start a new life? There are many decisions and even more options involved in such a move, and one of them can be economic citizenship.

Why economic citizenship? Economic citizenship programmes in the region allow foreign nationals a fast track to full citizenship of a participating country, through a government sponsored programme. For both personal and professional reasons, this can be a perfect solution for a number of reasons. If you have made a commitment to a lifestyle change, economically, physically and emotionally you want to move forward and finalise that commitment as soon as possible, which can include becoming a citizen.

Of course, its not going to be a cheap option, but a great alternative to waiting the normal five or seven years for full citizenship with passport and voting rights. Although it can take up to 30 years in the worst case countries, and even then, there are no guarantees of success. So you must do your research carefully and find out which countries are most welcoming to new citizens.

There are few Caribbean countries with an active disincentive policy towards new citizenry, but the BVI is currently creating just that, so unless you were particularly determined to live and work in the BVI, you will find it an uphill struggle to start your new life there. For example, a new policy document states that businesses may not employ foreign workers for longer than 4.5 years, after which the worker must leave.

Most Eastern Caribbean countries do not have an economic citizenship programme, although many are amenable to an approach from a private individual with a very deep pocket.

It has to be a win/win situation, for the country and for the aspiring citizen. It has to be well thought out by each country to maximize the benefits, and those countries that have not set up the correct framework for the process have found themselves bogged down with their own bureaucracy and frustrated potential citizens. Small countries especially have to protect themselves with a legal framework that doesn't bend under political or commercial pressures. Countries with tiny gross national incomes of, for example, less than 200 million US dollars are small cheese for a private wealthy investor and could be bought out a number of times over! Nevertheless the benefits can be considerable and include, capital investment, generating a new wealth class, and giving room to motivated citizens who are likely to start businesses, add to the education and even the gene pool, and generally stimulating the economy.

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