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January 10, 2013

Investing Offshore

tax-island-offshore-investing-st-maarten-300x225Offshore investing is often demonized in the media which paints a picture of investors stashing their money with some illegal company located on an obscure Caribbean Island where the tax rate is next to nothing. While it’s true that there will always be instances of shady offshore deals, the vast majority of offshore investing is perfectly legal. In fact, depending on your situation, offshore investing may offer you many advantages.

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Over the past years, a great number of governments from major countries have established tax, social and economic laws, becoming more and more restrictive and have attempted more and more to bind private investors.

The opposite effect has been achieved resulting in the continuous development of offshore companies. By definition offshore companies are legal entities incorporated in a country where there are no corporate or personal income taxes, capital gains taxes, reporting requirements, or restrictions on company employment policies.

The current tax legislation in Sint-Maarten does not incorporate offshore companies as they are not registered entities under the laws of the Netherlands Antilles. As a result, directors of offshore companies can benefit from tax exemption.

With correct advice an offshore company or a tax exempt company, one can afford many significant and legal tax savings throughout the world and provide you with a competitive advantage and afford confidentiality and security. Indeed the offshore entities guarantee the anonymity of the directors, protecting thereon the asset incorporated under such entity.

Upon placing an interest into a potential real estate, residence or parcel of land, the prospective purchaser might want to consider completing the purchase under an offshore entity for the following reasons:

  • tax reduction: many countries (known as tax havens) offer tax incentives to foreign investors. The favorable tax rates in an offshore country are designed to promote a healthy investment environment that attracts outside wealth. For a tiny country with very few resources and a small population, attracting investors can dramatically increase economic activity. Simply put, offshore investments occur when offshore investors form a corporation in a foreign country. The corporation acts as a shell for the investors’ accounts, shielding them from the higher tax burden that would be incurred in their home country. Because the corporation does not engage in local operations, little or no tax is imposed on the offshore corporation. As such, making investments through foreign corporations, can hold a distinct advantage over making investments as an individual.
  • Better confidentiality: the offshore entity removes assets from your personal ownership and from any disclosure of your personal assets. It is a private document and it cannot be discovered through any public records. Because nations are not requires to accept laws of a foreign government, offshore jurisdictions are, in most cases, immune to the law that may apply where the investor resides.
  • Better scope of use: if implemented correctly, the offshore entity can protect any type of asset, in any location, from any type of liabilities including lawsuits, bankruptcy, tax liens, divorce, or government actions.
  • Asset protection: offshore centers are popular locations for restructuring ownership of assets. Through trusts, foundations or through an existing corporation individual wealth ownership can be transferred from people to other legal entities. Many individuals who are concerned about lawsuits, or lenders foreclosing on outstanding debts elect to transfer a portion of their assets from their personal estates to an entity that holds it outside of their home country. By making these on-paper ownership transfers, individuals are no longer susceptible to seizure or other domestic troubles.
  • Better flexibility: the terms, conditions and beneficiaries of the offshore entity can be changed, and the assets can be returned to you without any cost or tax effect, at any time.
  • Less hassle: the offshore entity can be set up within a few days and it requires no appraisals, no gift taxes, no extra tax returns, and no ongoing maintenance.

Offshore entities can also open bank accounts in Sint-Maarten, have access to ATM and credit cards, checkbooks and internet banking services. Banks such as RBC, First Caribbean International Bank and The Windward Island Bank Ltd are structured to assist further with the opening of such accounts.

However, as the exact benefits that are available will depend greatly on nationality, location and other such factors it is always recommended that the investor first seeks appropriate professional advice before registering the offshore company.

In addition, money laundering and fraud regulations have enforced a strict compliance with requirements and procedures to follow in the incorporation of an offshore entity and in the opening of an offshore bank account. For instance, a bank will not accept documents that have not been delivered by a trust company or a company that is licensed to incorporate offshore entities. Indeed the stamp received from a trust entity ensures that all documents are legit and that references from the client have been checked and approved.

To go offshore, within the economical present social and political surroundings is a strategy that numerous intelligent individuals have set up and which is accepted by the wisest experts. The utility of it is now accepted as being part of a legitimate strategy to plan and optimize taxes for the protection of one’s wealth to alleviate the burden of the excessive laws and to manage one’s personal business and enjoy one’s income.

There are no more secrets: everything is perfectly legal and you do not have to be a millionaire to enjoy the advantages of the structures.

With your offshore company from either Nevis, Panama, Anguilla, Tortola (British Virgin Islands) you can invest in full security and with the following advantages:

  • no minimum capital
  • only one shareholder/director is necessary
  • no office obligation
  • incorporation within ten (10) working days upon presentation of all requested documentation and information
  • tax benefits
  • only the charters are public
  • no necessity to publish yearly accounts.
About the author, Jonathan Schaede

Hi there!

My name is Jonathan Schaede and I created this site. Here you will find a lot of information that you would otherwise not find about St. Maarten Real Estate and the market. It’s a great way in paragraph form to get to know the neighborhoods and areas in our little Paradise.
A little more about me;
I had the pleasure of growing up  in St. Maarten and have always been involved in our family owned Real Estate and Development company, Sunshine Properties, founded by my father Dieter Schaede a pioneer in the Real Estate industry.

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