How to Protect Your Assets in a Changing WorldHow to Protect Your Assets in a Changing World

Disclaimer� This session is for informational purposes ONLY and the

content is not by any means a lecture in tax planning (deferral or minimization). In addition, the content is not to be considered legal advice.

� The following presentation will discuss asset protection planning in an international setting .

� The information shared in this presentation is not for distribution to the public, or anyone other than those in attendance at this session. Re-distribution is strictly prohibited without prior written consent of the presenter.

Stan DeFreitas

International Management and Financial Consultant

Email: info@milestonenconsultinggrouup.org / rouup.org / MilestoneConsultingGroup@gmail.com

What is Offshore?� Offshore is any activity outside of one’s country of

origin or domicile;� Offshore banking is banking taking place outside of

one’s country of origin or domicile;one’s country of origin or domicile;� Offshore banking and the use of entities registered

offshore is now called International Financial Services (IFS)

Why Go Offshore?� Financial Privacy;� Tax Reduction (Deferral)� Asset Protection

Asset and Currency Diversification� Asset and Currency Diversification� Higher Returns on Investment � Estate Planning� More Favorable Foreign Laws and Regulations

Some Misconceptions / Stereotypes about Offshore Banking

� All persons that have offshore bank accounts are deliberately trying to evade taxes in their home jurisdiction

� Those who bank offshore are criminals or partaking in some illegal activity (i.e. money laundering)

� You have to be wealthy in order to bank offshore

Major Events Impacting the IFS Industry Since 2000

� 9/11 – The Patriot Act, Funding of Terrorism

� OECD / FATF Black Listing of Jurisdictions

� OECD Grey Listing , re: tax havens

� DTA’s & TIEA’s

� OECD White Listing

Commonly Used IFS Vehicles� International Business Company (IBC);

� International Trust

� Private Interest Foundation (PIF)

� Limited Liability Company (LLC)

What is an IBC?� An International Business Company (IBC) is a company which is not

subject to taxes and does not regularly transact business with persons resident.

� An IBC can be used for numerous purposes, including but not limited to:to:� Provision of professional and consultancy services� Establishing holding companies� International trading and investment� Ownership of real property and land� Ownership of intellectual property� Licensing and franchising� The employment of staff working on overseas assignments� Offshore e-business� Investments

What is an International Trust?� A trust… is the relationship which arises wherever a person called the trustee is

compelled in Equity to hold property, whether real or personal and whether by legal or equitable title, for the benefit of some persons (of whom he may be one…) or for some object permitted by law in such a way that the real benefit of the property accrues, not to the trustee, but to the beneficiaries or other objects of the trust;

� Trusts have been used for many centuries as a legitimate means of � Trusts have been used for many centuries as a legitimate means of protecting assets, whether hard assets or cash and cash instruments;

� International trusts are simply trusts domiciled in jurisdictions other than one's own country of citizenship. International Trusts allow grantors/settlors to benefit from more advantageous laws available in other jurisdictions;

� Each trust contains the following:� Settlor or Grantor� Protector� Trustee(s)� Beneficiary(s)

International Trusts (Cont’d)Other features of an International Trust are:

� International Trusts provide greater protection against lawsuits than domestic trusts� Creditors are less likely to sue if your assets are owned by an offshore entity� Attorneys attempting to sue offshore are confronted by a different legal system� A properly structured offshore Trust can provide income and probate tax savings� Control of present and future ownership� Control of present and future ownership� Provides for education, health care and maintenance of beneficiaries� Assets are protected from spendthrift beneficiaries� Property may be held to benefit minors and bankrupt and incapacitated persons� Strict confidentiality� Smooth transfer of wealth� Efficient tax planning� Protection of assets against potential creditors

Private Interest Foundations (PIFs)� A Foundation is a legal entity which may hold, protect and distribute assets or income in

accordance with the wishes of the person who established it (the Founder).

� Possible uses of a foundation are:� Asset Protection – to protect assets against excessive taxation, creditor claims, political

instability or forced heirship rules;� Business – to manage profit sharing or pension plans for employees; to hold shares, � Business – to manage profit sharing or pension plans for employees; to hold shares,

participation or interests in public or private companies; to collect royalties;� Charitable Purposes – to carry on scientific, philanthropic, religious, humanitarian or

educational purposes, or to manage funds or assets for such purposes;� Family – to protect closely held businesses, providing continuity into 2nd and 3rd

generations by preventing property-splitting; to protect minors, disabled persons or those incapable of managing their own assets; to manage payment of income or distribution of assets to family members or to provide for their education, housing or maintenance;

� Investment – to invest in shares, bonds, mutual funds, bank deposits or other assets; to own real estate or other assets of considerable value – such as works of art.

PIFs (Cont’d)� The Foundation Charter usually contains the following details:

� The name of the Foundation (may be in any language which uses the Latin alphabet, but must include the word “foundation”);

� The name of the Founder (or his Nominee);� The initial endowment (which must be at least US$10,000 – but may be stated in any currency);� The name(s) of the member(s) of the Foundation Council;

� If a Corporate Entity – the Foundation Council may be composed of a single member;� If a Corporate Entity – the Foundation Council may be composed of a single member;� If natural persons – it is necessary to have at least 3 members.

� The purpose(s) for which the Foundation is established – these may be drawn up as broadly as the Founder wishes;

� The responsibilities of the Foundation Council, and their powers (some powers may be reserved to the Founder or to the Protector);

� Whether or not the Foundation will have a Protector or other Supervisory Bodies (such as Auditors, etc.);

� The powers and responsibilities of the Protector (if any); and� Other standard clauses – such as the name and address of the Registered Agent, whether the

Foundation is irrevocable, the address of the Foundation, arbitration clauses, change of jurisdiction (re-domiciliation), and meetings.

� The Foundation Charter is usually prepared in both English & Spanish for all clients.

Limited Liability Companies (LLC’s)� LLC legislation has many of the features similar to those available under the

corresponding Delaware statute. Features of international LLC’s include:

� One or more persons may form a LLC by requiring a registered agent to sign articles of formation in the prescribed form and filing them with the Registrar. The company may be managed by its member(s) or by one or more managers.

� An LLC is a separate legal entity, which shall continue in existence until dissolved. Where the company is established with finite duration, the latest date on which it must dissolve should be stated in its articles.

� A written agreement (“LLC Agreement”) concerning the affairs of a LLC and the conduct of its business may be entered into by the members of the LLC, either before, after, or at the time of signing of the articles. Such agreement takes effect whenever entered into, or upon such date as provided in the agreement;

� For 25 years from the date of registration, an LLC is exempt from all forms of direct taxation;

LLC’s (Cont’d)� A member has two forms of interest in an LLC; (a) his economic

interest and (b) his membership interest. The former refers to his share of profits and losses plus his right to receive distributions of the company’s assets, the latter relates to all rights incidental to membership as set out in the LLC Agreement. Subject to the provisions of the LLC Agreement, a member’s economic interest may be transferred separately from his membership interest.of the LLC Agreement, a member’s economic interest may be transferred separately from his membership interest.

� On application to the court by any judgment creditor of a member, the court may charge the economic interest of the member with payment of the unsatisfied amount of the judgment. The entry of a charging order is the only remedy available to a judgment creditor. For the avoidance of doubt, the creditor of a member does not have any right to obtain possession of, or otherwise exercise legal or equitable remedies in or over the property of the LLC.

How Does This Apply to You?� Interim Funding is coming soon and everyone will need some

form of banking;

� Rather than accepting the funds domestically, why not bank offshore through an account set up for your free US LLC? We have the solution for you that is online and offers a Debit / offshore through an account set up for your free US LLC? We have the solution for you that is online and offers a Debit / MasterCard;

� Documentary Requirements to get started:� Two Certified pieces of identification;� Utility Bill confirming home address;� Bank reference letter OR most recent bank statement for a 3 month

period;� Professional Reference Letters (i.e. lawyer, accountant, minister)

Asset Protection – Beyond Interim Funding� To better protect assets for the future, the following is a proposed

multi-jurisdictional international structure to establish after interim funding has been received :

US LLC

SVG IBC

Panama PIF

Belize IBC

SVG Trust

Use of Nominees – Why?� Nominees are individuals and/or entities that act as

directors or officers or other roles for an IBC, Trust, PIF or LLC;

� They are critical when developing an asset protection plan because:

� They provide 3rd party scenarios for the originator;� Localized presence to execute contracts and/or document on

behalf of the entity.

Fees Involved� Account Opening for US LLC – US$200

� Upon the initial deposit (interim funding), a one-time fee of US$295 is deducted by the Bank for the issuance of a Debit/MasterCard as well as a digipass device for online banking

� No limits on deposits to the card account but the daily withdrawal limit at an ABM is $2,000.� For all incoming funds over $5,000, a source of funds form with supporting documentation

must be sent to the bank.must be sent to the bank.� Cash withdrawal cost: US$3.85 + 1.15%� Decline ATM fee: US$0.75� Balance request fee: US$0.75� Bank card stoppage fee: US$15.00� Bank card replacement fee: US$50.00� Bank card renewal fee: US$10.00� Additional Bank card issuance fee: US$25.00� Additional bankcard monthly fee: US$ 2.50� Please note that on non-USD card transactions a conversion fee of 1.50% will apply.

Fees Involved (Cont’d)� The proposed Asset Protection Structure (refer to

Slide 17)is US$4,800 including another bank account opening and nominee director/officer services. The Annual Fee to maintain the structure is US$2,500.Annual Fee to maintain the structure is US$2,500.

� For more detailed information, please email us.

THANK YOU!