Alfaro & Calvo Lawyers. International Corporate and Trust services

Trusts
The most widely used vehicle for asset protection is the Trust. A Trust is able to hold a variety of assets including immovable assets, stocks and shares, investment products, real and intellectual property, bank deposits and life insurance policies.
 

Generally, when people refer to offshore trusts, they are referring to a conventional trust that's incorporated into an offshore financial centre. They involve three parties; Settlers, Trustees and Beneficiaries. The settlor(s) transfers the assets of the trust to the trustee(s), who in turn manages them on behalf of the beneficiary(ies). A protector may also be appointed to control the choice of trustee.
 

Trusts are recognised in all common law jurisdictions and are recognised internationally under the Hague Convention on the Law Applicable to Trusts and on their Recognition. Prior to trust establishment, the terms of the trust must be agreed through a trust deed.
 

With offshore trusts, local taxes in the jurisdiction are avoided because the domiciled residents of that jurisdiction are excluded from receiving the assets of the trust.
 

ALFARO & CALVO provide a full range of trust services including trust establishment, trust accounting and administration and providing professional trustees.
 

Advantages of an offshore trust

- Private relationship, for example, in the Isle of Man offshore trust deeds are not publicly registered
- Wealth protection
- Tailored to specific family requirements
- Recognised in all common law jurisdictions
- Increasing recognition in important civil law jurisdictions
- An important tool in international income, capital gains and estate tax planning



Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements
 

Foundations
Foundations have been in use since the late 1930s. Historically, the Foundation's primary use was to provide protection for assets as well as confidentiality.

Foundations have since become well known, and are acceptable in many civil law jurisdictions where Trusts are less well known.
 

Like a trust, a foundation is a separate legal entity; however, it has no members or shareholders and is not administered by a trustee. They are usually set-up to reflect the demands of the founder, who may be an individual or a corporate entity. A foundation has a founder, protector, beneficiary and council members. Foundations can be established for a fixed or perpetual period of time and can be used for commercial, individual or charitable purposes.
 

Foundations are generally used where trusts are not recognised by a particular jurisdiction (i.e. non common law jurisdiction) and are popular vehicles to structure asset ownership by individuals or corporations. Foundations are similar corporate entities but derive the same protections and perpetuity that offshore trusts provide, without the requirement to appoint a trustee. They are governed in a similar fashion to corporate entities however they cannot conduct direct commercial activity and the founders identities can remain anonymous.

Practical Use of Offshore Foundations
 

- Private relationship: For example, the founder’s wishes are not publicly registered.
- Wealth protection
- Recognised in all common and civil law jurisdictions
- Holding assets which can be passed on from one generation to the next (estate planning)
- Inheritance tax planning
- Avoidance of forced heirship rules
- Maintenance of corporate control
- Separation of voting and economic benefits
- Employee share option schemes
- Pension funds
- Art collections
- Charitable purposes
- An important tool in international income, capital gains and estate tax planning

Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements.