Asset Protection Can Save your Assets
Assets are things of monetary value which are owned such as funds in a bank account, real estate, jewelry, securities, and vehicles. Asset protection is all about protecting your assets from theft, court ordered seizures to pay monetary debts, and government forfeiture due to committing crimes or failing to pay income taxes. People hire international law firms or accounting firms or offshore entity creation companies to set up a strategy to protect their assets. It is important to hire competent and experienced asset protection experts to advise you on the best strategies based on the types of assets you own and their location.
One strategy is to move funds out of your home country and deposit them into bank accounts in a country with strong privacy laws, strict bank secrecy laws, and no income taxes levied on income earned outside of that country. There are several countries which can do all of these which asset protection experts like to use.
There are Northern European countries which levy low taxes on their legal entities such as corporations and private foundations on their bank account interest and worldwide income derived outside the borders of the country. One criticism of creating a legal entity in these countries by asset protection experts is that they are more expensive to create a corporation or private foundation and maintain them every year than other countries.
The Caribbean islands and some Central American countries provide similar asset protection privacy services as the Northern European countries but at a much lower cost.
One important feature of an asset protection plan is to choose a no income tax country to create a corporation or private foundation which will earn bank account interest tax free inside the country but will operate offshore by earning income outside the host country which will not be taxed. So, avoiding paying income taxes is an important feature for standard asset protection.
A second feature for asset protection is privacy in one’s financial matters. That requires creating a corporation or private foundation whereby no one knows who really owns the entity other than the law firm or offshore company creator. Most of the above-mentioned countries have laws allowing for anonymous ownership of their legal entities. They also have laws protecting their banks customers from being identified to non-authorized persons or governments. These are commonly known as bank secrecy laws.
Asset protection requires the client to transfer ownership of the assets he or she wishes to protect to the legal entities set up in other countries. For instance, ABC Offshore Corporation based in a Caribbean Island nation will own an apartment building in the client’s home country or elsewhere where the rents will be directly sent to an offshore bank account of the offshore corporation by the renters. Now the funds are safely tucked away in an offshore bank account. This is just one example of how global asset protection can work to safeguard your assets and keep the funds outside of your country.