Tuesday, 5 August 2014

Offshore Company Case Study

CASE STUDY:

Mr. Gillian Luciano is the owner of two companies in the UK, which is his country of residency. He also owns two real estate properties which consist of; Real property in the UK, worth £2.5 Million and Real property in Italy, worth £ 2.0 Million.

Mr. Luciano has several personal loans obtained a few years ago. Lately, due to economic crisis and market upheavals, the operational results of this two business entities were worse than expected and for this reason he has not been able to meet his loan obligations and is currently in default risk. Also, due to the property market downturn, selling one of the properties doesn’t seem a solution for the moment.

Mr. Luciano, owing to these loan defaults and business losses is currently risk entering in enforcement procedure. Consequently it is likely that he loses all his property and this may also have an effect on the activities of his businesses.

THE PROBLEM:

Mr. Luciano needs to protect his assets and his business from the enforcement procedure. When the property market revives he will be able to sell one of the properties at the correct market price to cover all his financing obligations.

THE SOLUTION:

In this situation, the structure illustrated blow could be recommended to Mr. Luciano as an efficient offshore structure (with minimum risk and costs) to protect his wealth against litigation and claims.




Under this structure the properties currently owned in the name of Mr. Luciano is transferred to individual offshore companies.  An offshore company will be set up for the two local companies, in order reduce or eliminate the tax and protect it from any possible litigation. An individual offshore company for each of his properties will be set up in order to protect assets and to optimise tax when selling one of the properties when the market conditions turn around.

On the top of these offshore companies, this recommended structure we will have a Offshore Foundation. Offshore Foundations are key tax exempt asset protection structures. Offshore foundation has its own legal personality and no legal owner over a trust. Foundation can be well mixed with offshore companies to maximize privacy, business confidentiality and to protect assets, accumulate and manage wealth.

When the real estate market recovers and Mr. Luciano could sell one of the properties at a correct market price. Under this proposed structure, he will be selling one of the offshore companies owning the property optimizing all transaction tax costs and cover all his debt.

Also having a foundation as owner of an offshore Company enables the profits of the Company regularly transferred to the foundation but should a bankruptcy of the corporation occur, it would not affect the foundation at all.

This structure will provide Mr. Luciano the following benefits:

This structure will give Mr. Luciano he will not be the direct owner of the offshore companies and thus it provided him with an extra layer of protection and make him less vulnerable to liabilities.

Mr. Luciano will be the Protector of the Foundation but not the founder. The Foundation constitutes a separate legal estate from that of the Founder and its assets are protected from future claims against him.

Also Mr. Luciano will be the sole beneficial owner of the Foundation and thus can legally transfer all assets to his family or another third party, appointing them as secondary beneficiaries.

Regards

Winston Wambua

Email: winstonk@live.com

Skype: winston.wambua





2 comments:

  1. Having an offshore bank is always understood as illegal activity which the person may be doing for tax evasion or money laundering. This misconception is in the mind of many people. And if you are one of them then you will be surprised to know that it is legal to have an offshore bank account, only you need to comply with the rules and regulations of your as well as the other company where you are going to open your account.

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