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How to protect your assets using offshore schemes

How to protect your assets using offshore schemes

No one doubts the fact that assets need protection. But it is important to remember the key aspects of the process. In particular, to realize that it is impossible to completely avoid the risks. They will be, in any case, however, a successful offshore scheme involves their minimization. Often this can be achieved by choosing the “lesser evil”, i.e. replacing one risk for another.

Be aware of the danger

The first thing that needs to be done in order to build an effective offshore scheme should be an inventory of possible risks in a particular case. What can threaten your assets? The next step – competently organize the defense in order to avoid potential hazards.

  1. Inadequate control. Do not forget that excessive desire for privacy can lead to loss of control over the assets. Of course, privacy is important, but it must be accompanied by supervision of the owner, it is important to consider when building an offshore scheme. Many have heard about the situation about saving accounts in Swiss banks that have remained in the possession of a banking institution only because the successors of assets have been unable to manage capital. If an access to the data regarding the assets is lost, something similar can happen.
  2. The weakest link. When building a solid structure, consider the consequences of a broken chain. Trust is good, but where is the guarantee that one does not take advantage of your location and do not jeopardize business? For example, there is always a chance that the control of trustee will be lost, striving for greater reward, it will act in favor of a third party. Meanwhile, the property has already been transferred to the trust, and nobody took care of a protector authorized to shift the trustee. The only option left will be to sue, but it will take a lot of time, money and effort.
  3. Section of business. This risk should not be underestimated. If case you create a business structure with a partner / partners, it is important to clearly define all the details out of the joint business. If this is not taken care of, you can get into a difficult situation in the future.
  4. Participant assessment scheme for protection of assets. It makes no sense to risk savings, trusting nominal owners. As for the directors, their rights must be restricted. And the physical and legal persons, who are involved in the scheme, should be checked, then the risk of losing everything will be reduced to a minimum.

To leave minimum loopholes for debt claims in the adjacent business, it is recommended to register every type of asset with a separate structure.

Take into account all the nuances

Possible risks for the assets are not limited only to the above mentioned. In each situation, a list of them will be different, but it is important to consider that:

  • legislation in the country of registration may be changed not in your favor;
  • even in the face of apparent stability there is a danger of unforeseen situations, including local conflicts, revolutions, civil wars, which may affect the performance of the company.

Construction of asset ownership schemes is a complex task. If you are unable to adequately assess the risks and to find solutions to minimize them, instead of protecting the resources other options can be applied. It is important to figure out all the options, and anticipate potential hazards on the basis of this analysis, build an elaborate and most effective scheme.

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Author: Yuri Krasilnikov
managing partner Finance Business Service
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