Wednesday, September 03, 2008

Should You Use an Offshore Corporation?

Asset Protection for Everyone: Secrets to Legally Safeguarding Your Hard-Earned Money, Home & Business by Roland Frasier is a handy guide for those starting in asset protection planning.

One of its chapters has this questionnaire which is very useful to determine if one's assets are large enough to justify the expense which going offshore involves.


  1. Do you have liquid assets of more than $ 100,000? ______ Yes _______No

  1. Are you prepared to spend $ 10,000 or more to set up and implement a foreign corporations and nominees, if any? ______ Yes _______No

  1. Are you prepared to spend $ 1.500 - $ 5.000 per year to maintain your foreign corporations and nominees, if any? ______ Yes _______No

  1. Are you willing to file all of the necessary documents with the Internal Revenue Service when establishing the foreign component to your asset protection plan? ______ Yes _______No

  2. Are you willing to accept the risk of having your assets in stable but uninsured banks? ______ Yes _______No

6. Can you afford to wait 10 – 15 days to access your foreign representatives for signatures on documents and the like? ______ Yes _______No

7. Can you afford to wait for U.S. checks or wires to be processed through to your foreign accounts (10-15 days)? ______ Yes _______No

8. Are you willing to periodically travel to the country where you will incorporate your foreign corporation? ______ Yes _______No

9. Are you willing to prepare the extra tax returns and filings associated with having a foreign corporation? ______ Yes _______No

10. Are you comfortable with an aggressive tax and asset protection strategy?

______ Yes _______No

Scoring: Unless you answered yes to all ten of the questions above, a foreign corporation is probably not right for you. People who use foreign corporations for asset protection planning and tax reduction must be willing to take and defend an aggressive tax position with the Internal Revenue Service. They must be willing to complete all reporting and compliance filings when the corporation is created and as it continues to operate. Delays of ten to fifteen days are common when dealing with overseas banks and representatives. If you aren’t comfortable with or can’t afford to have such delays, you should avoid the use of foreign corporation.

However, for those who can deal with the extra complications of having a foreign corporation, the tax reduction and asset protection benefits can be substantial. While no plan is ever completely risk free, plans that use foreign corporations do offer the greatest protection for your assets.


No comments: