What is Offshore Investing?
In the past, offshore investing was thought of as a tool for the wealthy to avoid taxes, and increase their net worth. Although there are wealthy people and companies that setup offshore, there are many average wage earners that are setting up offshore as well.
Some people have simple offshore structures amounting to no more than a bank account or credit card to allow them access to international markets. Others have more complicated structures that include IBC's, trusts and bank accounts.
Offshore investing is not something you hear about on the evening news, however, it is a billion-dollar industry forcing most of the world's major financial institutions to locate offices in offshore jurisdictions.
It has been estimated that more than 50% of the
world's wealth is located offshore.Individuals and Corporations have been setting up offshore for years. Their reasons are plentiful and vary according to their circumstances. Some reasons you may require our offshore services include:
Privacy and Confidentiality
Some people believe that it is their right to have absolute privacy in their financial, business and banking affairs. In most countries it is very difficult, if not impossible, to accomplish this due to the reporting requirements of government agencies. Many offshore countries don't have these reporting requirements. In fact, it is illegal in many offshore jurisdictions for the various institutions and agencies to divulge any information about their clients, resulting in a high level of privacy and confidentiality.
In today's society, whether you are an individual or corporation, you are susceptible to law suits. This can place your assets and future at risk. By setting up offshore, you can shield your assets from creditors and possible judgments. This can be accomplished through utilization of vehicles such as trusts, International Business Corporations, bank accounts, and others.
If you feel you are being overtaxed, personally or corporately, you may want to consider an offshore jurisdiction. There are a wide variety of countries that have minimal, or no tax legislation that apply to residents and exempt companies such as International Business Corporations.
International markets are offering very competitive rates of returns on mutual funds, investment certificates and other investment vehicles. The lack of taxes in the various jurisdictions allows for higher returns in certain circumstances. This is attractive to many investors.
The laws in may offshore jurisdictions can make estate planning less complicated. As a result, it may be prudent for one to consider the utilization of offshore vehicles as part of the estate planning process.
International Banking is very big business. As a result, some companies are diversifying by creating their own offshore bank. Some offshore jurisdictions issue bank licenses that have equity requirements as low as $100,000 or less. Having an offshore bank allows a company to utilize bank services for its own operations such as loans, mortgages and debentures. Some even have their own credit cards. Ask a Lakeway Representative for details.
Transfer pricing is the pricing of cross-border transactions between non-arm's length parties. For example, a company may have its manufacturing operations situated in an offshore jurisdiction. This offshore structure would sell its products to its retail operations worldwide, who in turn would sell its products to the public. One of the objectives here is to trap most of the profits in the offshore jurisdiction which has no taxes. Anyone considering this should seek professional advice. A Lakeway Representative would be pleased to discuss this with you.
Canada is one of a few countries that does not tax inheritances and gifts. As these could be a major source of revenue for the Government, some people feel it is just a matter of time before legislation is introduced.
Lakeway International Equities Ltd.
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Revised: February 19, 2002