Chapter 2 - Offshore Financial Services

Offshore trust and company products

Trusts

A trust is a legal arrangement where a settlor transfers ownership of assets to a trustee for the benefit of a beneficiary.

• A settlor transfers ownership of assets
• The trustee owns the assets and holds a fiduciary duty towards the beneficiaries.
• A fiduciary relationship is founded on trust. If one holds a fiduciary duty they must act in the best interest of the other person.
• The beneficiaries enjoy the benefit of the trust.

Foundations are a hybrid of trusts and companies, they have separate legal personalities like a company but do not have shareholders. 

Partnerships are when two or more people work together to make a profit.

What services might be required for the administration of trusts, companies, foundations, and partnerships?

• Risk assessments for clients
• Preparation of minutes
• Managing bank accounts on behalf of Clients
• Creating trusts on behalf of clients
• Providing director/trustee services
• Filing annual tax returns

Offshore insurance services

We pay premiums into insurance companies and they work out the probability of risk in drivers.

Captive insurance companies - found as a subsidiary of a parent company in order to insure risks faced by the parent company.

The advantages and disadvantages of using a captive insurance company

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• Insurance is cheaper in the long term because the insurance company does not profit directly from the parent company
• More flexible payment terms
• Covered through risks
• Gain interest on unclaimed premium
• No rejection
• Faster payouts

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• Just the parent…