Everything You Need to Know About Offshore Asset Protection

As the 2008 global financial crisis made painfully clear, markets are not stable entities. People can lose their savings, their investments, and their livelihoods in the blink of an eye, leaving them in desperate and sometimes even destitute situations. A person’s economic assets are also vulnerable to a wide array of other threats, not limited to market crashes or instabilities. These include fraud, identity theft, and lawsuits.

As the saying goes, “You work hard for your money,” and you are entitled to keep what you’ve worked so hard to achieve. Effective and smart asset protection can help you preserve what you’ve got so you can rest comfortably knowing that your hard-earned wealth is safe from greedy fingers that are looking to take your money right out of your pockets. One way to protect your assets is to take them offshore; some foreign entities actually offer better offshore asset protection than the U.S.

What is an Offshore Asset?

The term “offshore” encompasses foreign banks, corporations, deposits, and investments. It’s quite common for individuals or companies to move offshore for the purposes of better or more relaxed tax regulations. An offshore investment (en.wikipedia.org/wiki/Offshore_investment) refers to the keeping of money in jurisdictions that are outside an individual’s country of residence. The main advantage of an offshore investment is that well-regulated offshore centres enable investors to benefit from higher tax returns or lower tax rates. While offshore investing has gotten a bit of a bad rap due to the fact that poorly managed jurisdictions have often been seen as havens for criminal activities, such as high-level money laundering, piracy, and tax evasion, modern offshore investing is actually a very legitimate (that is, legal!) and increasingly common practice. In fact, more than half of the world’s assets and investments are actually held in offshore jurisdictions, and a large number of very well-recognized, successful, and respected companies have offshore investments.

Offshore Asset Protection

Like any investment, however, offshore investments are not entirely safe from outside threats. That’s why it’s important for anyone with any kind of offshore investment to seek professional counsel on acquiring offshore asset protection. An international tax consultant, for example, will be able to advise his/her clients on the best strategies and practices needed to protect their assets. Protecting one’s offshore assets includes being compliant with international tax laws, as failing to comply with international tax laws and regulations – whether intentionally or not – could have very serious consequences, including hefty fines, penalties, and even legal action.

So how can people protect their offshore investments?

One way is to plan ahead. A well-prepared and comprehensive investment plan will ward off potential attackers of your assets. For example, frivolous lawsuits can have very negative impacts on a person’s financial security; this is one way that people looking to benefit from someone else’s blood, sweat, and tears will come after and sometimes even gain access to their assets and wealth. A well-structured plan, however, will allow you to legitimately segregate and insulate your liabilities and assets in order to protect yourself from harm. Setting up trust funds, corporations, partnerships and other legal entities are all ways of ensuring your offshore assets are safe and secure.

Lifestyles of the Rich and Famous

Another myth about offshore assets is that they’re only held by extremely wealthy people. While some very wealthy people most certainly do hold offshore assets, the truth is that people at nearly any stage of financial success can invest in offshore locales. It’s not only an increasingly popular way to invest; it’s also a very smart and strategic way to ensure that your assets are suffering the least amount of risk and regulations possible. Taking your assets offshore provides them with an extra layer of security, making it more difficult for attackers – as well as the government – to take advantage of your hard work.

Anyone with offshore investments needs offshore asset protection, regardless of how high or lucrative their investments are. Anything from identity fraud to frivolous lawsuits to tax compliance laws can severely impact a person’s financial state and security. One way for individuals to further protect their offshore investments from criminal activity is to place them in the name of an entity or report them under something like an employee identification number rather than a social security number.