Offshore Investments and Management

Advantages of offshore investments

The information below clarifies how the trust in Barbados is structured, the advantages of creating trust in this jurisdiction, and the possible assignments of the trust.

The legal structure of trust in Barbados includes the obligatory presence of a “Trustor”, which transfers or allocates assets. The “Trustee” is responsible for managing the assets in the interests of a person or group of persons referred to as “Beneficiaries”. The Guarantor monitors the activities of the trust, ensuring that it complies with the provisions of the Trust Declaration and that the trust is managed in a satisfactory manner.

The difference between non-offshore and offshore trusts is due to the fact that the assets are stored in another country (offshore), and the trust is created according to the legislation of offshore jurisdiction. The trustee manages the trust on behalf of the founder of the trust management (who transfers the assets to the trust) in the interests of the beneficiaries appointed by him. The accumulation of income in trust in Barbados can occur over a period of up to 100 years, and the rule about the eternal existence of a trust does not apply.

Why create an offshore trust in Barbados?

The Bahamas attracts offshore founders for many reasons, one of the most important of which is that the trust law in Barbados is subject to English common law. The 1995 International Trusts Act introduces additional measures of protection against creditors, namely: the law requires lenders to establish fraudulent intent before they can cancel the time limits for assets in a trust. The time during which lenders receive assets from a trust is less than 3 years. The laws of Barbados stipulate the confidentiality clause very strictly – and the founder of the trust and the designated beneficiaries have the right to remain anonymous. Barbados has been known for its trusts for 30 years, and this is confirmed by the tax regimes that have been in effect since the enactment of the 1995 International Trusts Act.

What is an offshore trust in Barbados?

Trusts in Barbados do not need registration and do not pay stamp duty. One of the principles of trust in Barbados is that trustees may not be resident, provided that at least one of them is a resident of Barbados. Unlike other jurisdictions, Barbados has currency control over trusts. When creating a trust in Barbados, you must comply with certain mandatory conditions, for example, the founder of the trust should not be a resident during the creation of the trust and transfer of assets to the trust. The assets of trusts in Barbados can be very diverse, completely excluding, however, real estate in Barbados. Finally, at least one of the trustees of the trust must be a resident of Barbados.

Although trusts are mainly used by very rich people to protect their own wealth and wealth and for the good of their children and future generations, it is wrong to assume that only rich people create trusts. In fact, trust attracts people with its ability to protect assets. Moreover, potential heirs cannot sue the trust, and the assets of the trust cannot be seized. Many people want to protect their assets, act as founders of trust property because you can transfer your assets to a trust and legally state that you no longer own them.

Assignment of trusts in Barbados

– Asset Protection

– inheritance planning

– Receiving benefits for children

– Employee benefits

– Use for charitable purposes or for social assistance.

The most popular types of trusts in Barbados

– Trust Trusts

– Trusts for asset protection

Advantages of offshore trusts in Barbados

Barbados has an article on the protection of the right to an obligatory share in the estate, which is very important for the founders of the trust. Other benefits of creating trust in Barbados:

– Non-discriminatory low tax rates

– Non-recognition of rulings by foreign courts

– Enhanced protection from creditors

– No capital gains tax

– No inheritance or gift tax

– Payment of cash benefits deductible from the taxable amount

– No need to register documents

– Effective tax planning

– Consolidation of asset ownership in one desired location

– Centralized reporting and asset management

– Ability to own trusts by foreigners

– High degree of anonymity that most people strive to provide

– No inheritance tax or the right to an obligatory share in the inheritance mass

– Avoiding probate approval

– High level of asset protection and condition management.

Creating an offshore fund in Barbados

What is a foundation in Barbados?

Funds are considered to be a corporate alternative to trust. To create a foundation, a founder is needed who is the person / organization creating the fund, the guarantor necessary to ensure the conformity of the fund management, as is the case with trusts, the beneficiary, the person or group of people who benefit from the fund, and finally advice.

The main characteristic of a foundation in Barbados is the fact that after its creation the foundation becomes a legal entity. Funds can own a wide variety of assets and can be created by individuals or companies. As in the case of trusts, a foundation may have a declaration describing the requirements to be fulfilled. The foundation in Barbados has created in such a way that it reflects the wishes of the founder.

Types of Barbados Funds

Most often in Barbados found the funds of the following three types:

– private funds

– commercial funds

– charitable foundations.

The appointment of offshore funds in Barbados

– Confidentiality preservation – the founder’s requirements are not publicly registered

– Protection of personal and corporate status

– Property management and state planning for the future

– Tax planning of inherited assets

– Availability of corporate control and management

– Profit participation schemes for employees

– Pension Planning

– Charity groups

Types of assets that may be located in an offshore fund in Barbados

There are several types of assets that can be held in an offshore fund:

– Shares and securities of private and public companies

– Bank deposits

– Life insurance policies

– Investment portfolios

– Real Estate

– Objects of intellectual property.

Benefits of a Barbados Foundation

– Fund assets are protected by strict asset protection laws of Barbados

– Payment of reasonable compensation for services rendered to the fund

– Contributions to the fund are deducted from tax

– Favorable tax system serves as a haven for offshore investors. Learn more at https://offshorecitizen.net/offshore/offshore-investments-investing/.

– There is no requirement for an external audit

– An appointed person may act as a founder.

– Presence of confidentiality provisions in the interests of offshore founders

– The geographical location of Barbados, conducive to international relations and access to other jurisdictions around the world

– Ability to own many companies and assets without limiting the nature of assets

– The possibility of enforcing instructions, as is done in the case of trusts, by executing a declaration of foundation

– No tax on the sale of property

– No capital gains tax or income taxes.

You know in 5 minutes! Introduction to offshore investment

Here, we will introduce what kind of foreign fund investment is in the Q & A format in order to promptly understand “overseas fund investment (overseas diversification investment)”.

Basics

Q1 – What is an overseas fund?

Simply put, it refers to an investment trust that has “registered” overseas. Investment trusts are financial instruments operated by fund managers who collect funds from a large number of investors and our investment professionals.

There are things that are listed and unlisted, but in order to avoid mistakes, it is the iron rule that funds invest in funds listed on overseas markets, basically.

Q2 – What are the benefits of overseas fund investment?

It is said that overseas funds are about 60,000 or more. Since the public investment trusts in Japan are about 5 thousand, the difference is clear. It can be said that there are many diversified products as much as that.

Investment fund type funds generally sold in Japan are called mutual funds overseas. Overseas, there are many funds that use operational methods that are not found in Japan, such as alternative funds that invest in insurance and products, and hedge funds that use derivative transactions. From such a large number of funds, it is possible to choose funds that match your “investment objectives”.

In addition, if the fund has “registered” in an area where the tax system called offshore is preferential, it is possible to expect “tax saving/compound interest effect” due to tax not being applied during the operation period.

Q3 – What are the points to pay attention to overseas fund investment?

As mentioned above, it is very difficult for individual investors to find excellent overseas funds themselves because of financial instruments that are not registered in Japan.

In fact, there were several fraud cases in the past that sang high-yield overseas funds. Although it is not fraud, funds that operate well for only 2 or 3 years after establishment, there are also funds that will drop sharply thereafter, so be particularly careful about funds with a short operation period.

There are others in Japan and overseas introducing a certain fund for sale purpose, so you must be careful with such solicitation. However, it is extremely difficult for individual investors to actually judge this by their own power alone.

Therefore, in principle, investing in overseas funds can be said to be the most reliable investment method by having a professional investment advisor (investment advisory company) to make an operation plan suitable for you.

And, of course, it is an investment, so even if you are an overseas fund with many choices, there are not many guaranteed principal, so you need to understand that point.