Some Offshore Terms Explained

Caribbean offshore jurisdictions are the best vacation destinations. Here I have short-listed some key terms and definitions to help you appreciate tax havens even more.

Bearer Shares
International Business Corporations (IBC) issue bearer shares. The bearer or the one with possession of the share certificate(s) becomes the owner of the share(s).

The bearer has exclusive and private knowledge of stock ownership in an offshore corporation. As a bearer, you can buy, sell or exchange bearer shares in complete privacy.

People use corporations to generate profit. They engage in business ventures such as international trade, banking, investment management, securities trading.

You can use a foundation to hold ownership of your corporation for the purpose of asset protection. However, the main purpose of foundations is for non-profit ventures.

International Business Corporation (IBC)
You can form this corporation within a tax haven. And you then engage in business activities anywhere in the world except in the country where you incorporated the IBC.

Some Offshore Terms Explained

One person may represent the corporation.

Nominee Directors
Your representative law firm may appoint directors to your corporation or foundation when pursuing registration. The directors are unable to make decisions on behalf of your entity and has no knowledge of its affairs or records.

Only you can empower these individuals to act on behalf of your corporation or foundation. These appointments occur because you can choose to not be appointed for privacy reasons.

Also your home country may have legislation in place to account for foreign directorship. Hence why nominee directors are of importance to maintain your privacy.

Nominee signatories
Are signatories that your law firm appoints for you on your corporate accounts. This occurs due to your need to maintain privacy.

Offshore Mail Forwarding Address
Upon registering your IBC, your entity will receive an offshore address. And you will have all mail related to your business sent to this address. This is done very discreetly.

Offshore Trust
Involves one party managing the assets of another party. A trust has no influence over the affairs of an international business corporation. Yet the trust may own the IBC’s bearer shares.

You can use a trust for holding assets or owing a corporation.

However, your home country may have extensive legislature that requires the reporting of offshore trusts. This is contrary to the benefits of exclusivity and privacy that tax havens offer.

Registered Agent
A tax haven requires a local licensed professional registered agent to form an international business corporation within its jurisdiction on your behalf.

Registered Shares
With an onshore corporation, shareholders are the owners and there’s no privacy whatsoever. Specific government agencies exist to register every share a company sells or issues.

This includes knowledge of the owners of shares and the pricing of shares. Compare this to bearer shares.

Secrecy Laws
Once an individual places funds or assets into an offshore bank or brokerage account, no one else knows about it. Offshore jurisdictions have legislation in place that forbids the divulging of confidential information to third parties. This includes jail sentences and fines.

Shelf Company
Given the nature of their circumstances, an individual or a corporation may need to show that their company has been in operations for some time – a few months or even years.

Some people may require a company registered in a prior tax year. To fulfill these needs, you can purchase a shelf company, get the necessary offshore accounts and commence business.

Tax Haven
This is truly a tax-free environment for you the offshore investor. A jurisdiction may tax its local citizens only – not you the foreign investor. Having formed a company or corporation within a tax haven, your business dealings remain totally private.

There’s no reporting or payment of taxes to your home country.

The government of the tax haven will not even have details on you the individual, only of your corporate entity. This government will only want to know that the company has paid its yearly renewal fee.

Someone has to oversee the assets in a trust on behalf of the beneficiaries. A trustee plays that role.

In conclusion…

The information I have presented on offshore banking is the result of my personal interests and research.

So I hope these pages help you with your asset protection planning and investment portfolio.

And with sound expert advice and consultation you can be on vacation on Caribbean beaches indefinitely.