Trusts and Foundations

Offshore companies are often owned by offshore trusts or Foundations. The importance of offshore trusts and Foundations in international tax planning cannot be overstated.

Their chief function is to hold valuable assets, such as offshore company shares, in a tax exempt environment. Of importance is that the trust or Foundation assets are owned by the trustees or the Foundation, and do not belong to the estate of the settler or founder. This has obvious potential tax and succession planning benefits.

In particular trusts and Foundations can allow for very flexible devolution of assets to members of the founder's or settlor's family, and the local courts of the offshore Foundation or trust will not entertain claims from third parties who seek to challenge these arrangements, because they conflict with the succession laws of the settler/founder, or of the beneficiaries of the trust or Foundation.

Each trust or foundation needs to be carefully formulated including a detailed needs analysis with special attention on the tax aspects. In addition, special care needs to be taken when choosing the appropriate jurisdiction, the rights of the settlor/founder and beneficiaries, their place of residence and the location of the assets. Jordans International are able to provide the necessary guidance.