Individual (Asset Protection)
Mr. Jones is a doctor and he has built up substantial
personal assets. He has liability and error and omission insurance but he is concerned
that if he is sued and the insurance does not cover the damages awarded, his personal
assets may be at risk.
Mr. Jones could have the title to his assets transferred to
an offshore International Business Corporation incorporated in a country who's laws do not
recognized foreign judgments, thereby protecting his assets. There may or may not be some
tax consequences in doing this.
Individual (Estate Planning)
Mr. and Mrs. Brown have some assets that they want to pass
on to their children upon their death and are concerned about the possibility of new laws
being enacted whereby gifts and inheritances would be taxable.
Mr. and Mrs. Brown could invest in an offshore charitable
foundation structure that could see their investment and interest on that investment being
forwarded to their children via legitimate non-taxable means.
Mr. and Mrs. Jacobs, like so many Canadians, do not mind
paying some income tax, however, they are tired of working at their business to make money
only to give 50% away to the government, which seems to have poor judgment when it comes
to expenditures. Is there anything they can do?
Yes, there is. In spite of the new reporting requirements
enacted in 1997, the Jacobs may be able to utilize an offshore charitable foundation
structure to reduce the amount of tax they will pay. To elaborate on this structure is
beyond the scope of this website, however, a Lakeway representative would be pleased to
discuss this with you.
Individuals (Asset Protection - Divorce)
Miss Johnson is engaged to be married shortly, and although
she loves her fiancé very much, she realizes that statistics show that one out of every
two marriages ends in divorce. She is concerned that she may lose a good portion, if not
all, of the assets she will bring into the marriage. What can she do?
Miss Johnson could have the title to her assets held by an
offshore International Business Corporation (holding company) in a country whose laws do
not recognize foreign judgments. She would then be judgment-proof, thus protecting
Corporations (Asset Protection)
ABC Corporation, a Canadian controlled private corporation,
is thinking of buying some assets, such as an office building and land. Its major
shareholder is concerned that in the event the company is sued and its insurance does not
cover the damages awarded, the company's assets will be at risk.
ABC Corporation may be wise to utilize an International
Business Corporation to hold title to their assets, and lease them to ABC Corporation. In
the event that the Canadian company is sued, loses and its insurance does not cover the
damages awarded, the Company's assets are protected because title is held by an IBC in a
country that does not recognize foreign judgments.
Corporations (Transfer Pricing)
Widget Manufacturing and Sales Ltd., a Canadian Corporation
in its startup stage, wants to set up a manufacturing plant separate from its Head Office.
It is looking at its options, and considering the income tax consequences of each option.
The Company may be well advised to have its manufacturing
plant in a no-tax haven country. The person or persons controlling and managing the plant
would be non-residents of Canada. The offshore company could then sell its products to its
Canadian Head Office thereby trapping some, of not all, of the profits in the no-tax haven
country. The pricing of its products and the mind and management of the
manufacturing plant are key factors in this structure.
The above examples are to
show some basic structures that can take advantage of several offshore vehicles. They
require proper documentation and organization. We do not advise that you attempt to
organize these structures on your own.