Asset Protection is a complex service directed at the state protection against political and business risks associated with the activity of a specific individual, as well as against the risks that may arise from members of his family in the context of these activities. Such protection can provide such legal structures as trusts and founds and the correct transfer of the clients assets in them.

Offshore trust and orivate offshore fund will ideally do for the asset ownership and protection, but they are not intended for the permanent commercial operations.

 

Articles:

Opening of the "classic" trust in the British Virgin Islands (BVI)
Basic provisions on establishment of trusts in Cyprus
Establishment of trusts in Switzerland
What do you need to know about the establishment of trusts in Malta?
Establishment of trusts in Liechtenstein
Establishment of trusts in Jersey
Establishment of trusts on Gibraltar
Opening of a trust in Guernsey
Establishment of trusts in Belize

Trust

Confidential property (or trust) in the common law is a system of relations in which a property originally owned by the founder, is given to the disposal of the trustee (manager or trustee), but beneficiaries receive the income from it. A founder (who can be a beneficiary at the same time) under a special agreement transfers his/her values under control of a trustee who shall perform operations with them, bringing the maximum profit to the beneficiaries or other relevant instructions of the founder.

Services of the trustee are paid by the beneficiaries or the settlor, usually as a percentage of the profits.

The object of the trust can be any property, both movable and immovable. The property prohibited by the legislation of the country of the trust establishment is exclude from these relations.

The Founder may transfer his property during his lifetime (intravital trust), and provide a transfer after his death (a testamentary trust). The Trustee is responsible for the fulfillment of the conditions of the trust agreement and usually receives broad authority to manage the estate of the founder, but also can obtain special instructions for the distribution of the trust income and capital among the beneficiaries upon the occurrence of certain known conditions stipulated by the founder. Such conditions are usually included in the founder of the so-called letter of wishes addressed to the trustee. The Founder may also foresee the conditions of the trustee changing, specify the question about passing the right to another person or a trustee.
 

Fund

Offshore Fund is a legal entity owning the property transferred to it by any person. To create an offshore fund the founder, the guarantor, the beneficiary and members of the board are needed. The Foundation Board manages the fund activity, while the guarantor protects assets and provides compliance with the legislation about founds applicable in this jurisdiction. In this case, the founder submitted by any person or group of persons who wish to establish a fund, and the beneficiaries are the people who benefit from the operations of the fund. As a rule, the fund is established in cases where the jurisdiction does not recognize the trust legislation. In this case, the fund is considered to be acorporate alternative to the trust since it retains all main characteristics of the trust, while offering the additional benefits of the corporate plan.
 

Main differences

The most obvious differences between the offshore trust and offshore funds are:

  • trust legislation does not require its register with the government, while the fund should be registered in a public register in accordance with the local legislation.
  • Trust is a legal act, the system of the contracts making out an agreement between the trustor and the trustee regarding the asset management of the founder. In this case, the fund unlike the trust after its (the fund's) institution becomes a separate legal entity with all the ensuing consequences.
  • Information of the trusts, persons affiliated with it and its activities are confidential (i.e. in fact it is only a system of the contracts), and it allows the founder and beneficiaries to remain anonymous while the fund is registered legal entity having a unique name, identification number and shall take other inherent the legal person, the government procedures. The fund contains information both private which is strictly confidential, and public for the open access.
  • Most often, according to the law about the trusts the trustor may also be a beneficiary of the trust. At the same time, according to the law about funds beneficial owners do not exist, and the property belongs to the fund of the funds itself.
  • continuous legal succession is mainly peculiar to the funds than trusts because the trust legislation allows the trust to request the extension of its activities, sometimes up to 150 years. The Funds are always created in perpetuity.
  • The Fund may start its activity even when the property is not contributed from the beginning, while the assets of the trust must be contributed immediately at its establishment.
  • Usually the founder of the fund must make a minimum contribution of $ 10 000, while the settlor can make assets of any amount at his discretion.

 

Law & Trust international Company offers an individual approach while creating a private fund or trust "turnkey". For the detailed information, please contact our managers .

 

Holding

The purpose of holding

is the organization and optimization of the financial flows. This problem is solved by understandable way - holding company in is volved as JSCo stockholder and LLC partner in the share capital of subsidiaries - the other members of the group, located in the countries of business activity (income sources).

Holding schemes allow to solve a complex of the tasks associated with the formation of optimal income taxation and business in various ways.

The Question of holding establishment has always been and will be relevant in the ownership and management of assets in the context of the tax planning. The most popular jurisdictions for the creation of the holding are considered Luxembourg , Cyprus , Denmark , England and the Netherlands . It is a country of tulips has established itself as the most favorable tax regime for the holding companies.

The Netherlands is Europe 's leading shopping center with a highly developed market economy and showpiece of the GDP. Providing great benefits to the establishment of holding companies, this country is one of the most prestigious European jurisdictions for the incorporation of the company.

As you know, holding structures are used in the international tax planning to optimize the taxation of income and asset management centralization og the general business scheme.

Creation of the holding in the Netherlands will allow to use this tool with maximum benefit, because unlike most European jurisdictions, local laws are not obliged to perform the requirements and adapt to various restrictions.

Registration of the Dutch holding

Accordin to the corporate law of the Netherlands there are two types of the limited liability companies, which can act as a holding company:

- Besloten Vennootschap (BV) - a private company with limited liability ;

- Naamloze Vennootschap (NV) - a public limited liability company.

The most common type os the hoding is BV, its features are as follows:

  • Since October 1, 2012, in the law of the Netherlands the requirements regarding minimum capital (to 01.10.2012 there was a requirement of the minimum authorized capital in the amount of BV 96 thousand euros, 25 % of which must be fully paid at the time of the registration) were cancelled. Accordingly, there is no need to open a bank account before registering and take extracts from it - it greatly simplifies the process of the incorporation and reduces its terms.
  • Founder / Shareholder may be one. No residency requirements, but it is necessary to pay attention to the country of registration of the shareholder, as it may not be included in a hundred countries concluded the agreements on the avoidance of the double tax treaty (DTT) with the Netherlands.
  • No need for personal presence of the authorized person of the shareholder at the signing of the Charter / Memorandum of a notary - allowed the signing by the Trust Deed.
  • Director - at least 1. It can be both physical and legal person. No residency requirements, but for a tax exemption the holding company must appear as a resident, i.e. it is desirable that the majority of the directors wll be residents of the Netherlands. Information about the director must be in the public access. Director, as the official face of the company is solely responsible for its activities.
  • Secretary - there are no requirements.
  • Registration office must be in the Netherlands.

As already mentioned, the registration procedure is simple and goes through the following algorithm:

a) providing data on the actual owner of the holding company and the procedure "know your customer " (KYC); providing data on the activities of all the elements of a holding company structure, including a description of the future activities of the holding company; checking the desired title of the holding;

b) on the basis of information about the founders and directors of the company notary prepares a project of the constituent documents that are provided to the Ministry of the Justice for approval and obtaining his approval ("Statement of no Objection");

c) notary registration on the basis of the agreed constituent documents, including revisions made ​​by the Ministry of Justice; introduction in the Trade Register of the Chamber of Commerce by the notary of the company;

d) automatic registration in the tax authorities and obtaining a tax number.

After that your holding is incorporated.

 

Maintenance of the holding activities

Holdings have to provide an annual report with information about the directors and holders of existing shares. In addition, companies have to provide the financial statements to the Chamber of Commerce. Important advantage - statements can be prepared and provided in not only euros, but in a different currency.

There is a requirement for the linited companies to audit if the holding corresponds to two of the three attributes:

1) the company's assets exceed EUR 6 million ;

2) an annual turnover of more than EUR 12 million ;

3) average number of employees is more than 49.

The above-mentioned requirements fully comply with the European corporate law standards with respect to the activities of the companies.

Tax regime

In short about the basic provisions on taxation of the Dutch holdings.

Corporate tax (income tax) - the income tax rate is differentiated:

  • 20 % of the profits in the amount of up to 40,000 euros ;
  • 23 % of the profit in the amount of 40,000 euros to 200,000 euros ;
  • 25.5% of the profit in the amount of 200.00 euros and more

Income Tax Withholding (dividend tax) - a general rule: dividends are taxed at 15%, but on the basis of agreements on avoidance double taxation (DTT), income received from subsidiaries, is exempted from tax.

The Netherlands is a country which has concluded an agreement DTT with more than a hundred of countries.

I note that not only the representatives of the countries signed the agreement with the Netherlands are exempted from the dividen taxes. Exemption from withholding tax on dividends is also possible due to the use of the EU Directives about parent and Subsidiary companies. Under this statute, all European countries in which the subsidiaries of the holding company are registered, are eligible for exemption from withholding tax on dividends.

To release the Dutch holding company from paying taxes on dividends received from a subsidiary, it is needed to fulfill three conditions :

1) holding since the beginning of the fiscal year shall hold a minimum of 5 % of the capital of the subsidiary ;

2) subsidiary must pay taxes on the place of registration ;

3) a subsidiary company should not be portfolio investment for the holding, that is holding must demonstrate the managerial relationship with its subsidiary companies.

You can freely rely on the exemption from withholding tax on dividends, if these conditions are met. To confirm this right the tax authority of the Netherlands gives the tax rulings to the holding.

From the above-mentioned it becomes clear that the holding company is a reliable tool for asset protection and tax optimization, and the Netherlands are perfect location for the legal and socio- political basis.

Prices for the registration of the holding in the Netherlands are here .

Prices for registration of the holding in Luxembourg are  here .