Having seen the benefits that going offshore has to offer, the next step is to learn how the process actually works. 

How does a person “go offshore”? Having guided numerous clients from all over the world through the process, Moneymec makes going offshore easy to understand. The process of going offshore is described in detail below for those who want to thoroughly understand it. However, clients don’t have to become offshore experts to take advantage of offshore tools. Moneymec takes care of all of the steps below and does all of the necessary back end work so that clients can go offshore without leaving their desks.

Introduction: To “go offshore” simply means to place assets outside of one’s home country. This is accomplished through taking several steps. These steps are the same regardless of the reason for going offshore. For maximum privacy and protection the steps should involve multiple offshore jurisdictions.

Step 1. International Business Corporation (IBC)

The first step in forming an offshore structure is to form a corporation (IBC) in an offshore country. Don’t be confused by the word “corporation”. There is no requirement to start an actual, running business or to travel to where the IBC is formed. An IBC is established so that the client has a legal entity that can own assets such as property, investments and bank accounts in its name rather than the client’s personal name. Moving assets into the IBC will keep them out of the reach of third parties and in their rightful hands: yours.

An IBC is a corporation formed in an offshore country. An IBC is completely private; the founder (you) may be the only person in the company, may completely control it and may be the sole shareholder (owner). No one else need be involved or have any knowledge of the IBC’s business or affairs. The founder may include others in the IBC if he/she wishes to, but there is no obligation to do so. The founder/owner’s identity remains confidential through the use of bearer shares. The person or organization who holds the bearer shares is the IBC’s legal owner.

For the vast majority of clients, forming a new IBC achieves their goals completely. However, there are some who wish to purchase an IBC that is already in existence and who are willing to incur the additional expense that comes with it. A small percentage of individuals and corporations that go offshore want to demonstrate that their company has been in existence for several months or years. A Shelf Company is the perfect solution for this scenario. An offshore Shelf Company, also known as an “aged company,” is an IBC that has already been in existence for weeks, months, or years. Most Shelf Companies are literally sitting on a shelf waiting to be purchased, thus the name Shelf Company. A Shelf Company affords the same privacy and asset protection advantages that a newly formed company provides.

Shelf Companies are almost always more expensive than newly formed IBC’s. In some cases a Shelf Company’s price may be several times the price of a newly formed IBC. This is due to the fact that each year that an IBC is in existence a fee (called an “annual fee” or a “renewal fee”) must be paid. The price of a Shelf Company increases each year by at least the price of the renewal fee. For example, if a Shelf Company is three years old, the purchase price not only includes the price of a newly formed IBC, but also includes three years of annual fees.

Step 2. Offshore Trust

Once the IBC is in place, an additional layer of protection is added. An offshore trust is created which becomes the owner of the IBC. This further removes any connection between the client’s personal name and his or her assets. Typically, the founder of the IBC holds the bearer shares and is therefore the IBC’s legal owner. However, being the owner of the IBC could be problematic if the founder were ever forced to divulge his or her assets. By means of an offshore trust, the founder can remove the potential liability of being the IBC’s owner without sacrificing privacy and complete control of his/her offshore corporation.

An offshore trust is created which takes possession of the IBC’s bearer shares. The offshore trust then becomes the legal owner of the IBC. Ownership of the IBC is then in the hands of the offshore trust instead of the founder. This removes any liability that might have come with owning an offshore corporation. The offshore trust simply acts a a passive, non-involved shareholder and therefore does not alter the functionality or the privacy of the IBC. The founder retains complete control of the IBC: he/she remains the only individual with any knowledge of the IBC’s business, the only one who uses the IBC, and the only one who may sign on any accounts in the IBC’s name.

The offshore trust may also be used independently to hold domestic assets (car, home, real estate, art collections, etc.) that cannot be moved offshore. Moving domestic assets into an offshore trust protects them from lawsuits by taking them out of an individual’s (or company’s) name and placing them into the name of an offshore structure which third parties cannot obtain information about.

Step 3. Offshore Accounts

After the IBC and offshore trust have been formed, the founder may then move assets under the protective umbrella of these offshore entities. This is accomplished via offshore bank and/or brokerage accounts.

Offshore Banking

When an offshore bank account is established, the client may move his/her money into the account to safeguard it. The offshore bank account is opened in the name of the client’s IBC, not the client’s personal name. This protects the client’s identity because transactions carried out with the account (wire transfers, debit cards, etc.) are all in the IBC’s name, not the client’s name..

An offshore account that is opened in the name of an IBC must be signed on by an individual. The founder of the company (the client) may sign on the account and will remain in complete control of his/her money. The founder’s identity is kept confidential because of strict offshore secrecy laws. The secrecy laws insure that all banking or investing transactions will be kept completely confidential. Offshore banks issue private Visa/MasterCard debit cards that an account holder may use to withdraw funds from an ATM or to purchase goods and services directly.

Offshore Investing

The client may protect an existing portfolio by moving an existing investment account into an offshore brokerage account. Also, if the client does not have an existing investment account he/she may establish a new one offshore..

An offshore brokerage account is much like an offshore bank account, only it is used for investing, not banking. The brokerage account is opened in the name of the IBC thus protecting the client’s privacy. Any purchase or sale of stocks, bonds, options, mutual funds, futures, forex, etc. is carried out in the name of the offshore brokerage on behalf of the IBC. The client’s personal name is never connected to any transaction. The client may sign on the brokerage account to maintain complete control. The client’s identity is kept confidential because of offshore secrecy laws.

Through an offshore brokerage account, the client may invest privately in offshore funds as well as any market on the planet. The offshore brokerage account may be opened at a full service or online brokerage.

Step 4. Offshore address

The last step in going offshore is to establish an offshore mail forwarding address. An offshore address will insure that the wrong eyes never view sensitive information.

At this stage, the client is almost completely set up offshore. The offshore company and trust have been established and bank and brokerage accounts are operating. But these newly formed entities and accounts may generate mail. This presents a potential problem. If the wrong eyes see mail from offshore the privacy of the entire structure could be in jeopardy. To insure that this never happens, an offshore mail forwarding address is assigned to the IBC. Any mail for the IBC (such as offshore bank or brokerage statements) is sent to the assigned offshore address and then forwarded to HFS. It is then placed

inside a discreet envelope and mailed to the client. Using offshore mail forwarding will avoid any breaches in privacy that might occur as a result of offshore correspondence being sent directly to a domestic residence or business.

Step 5. Security

Assets are now secure. You can breathe easier knowing that your assets are private, safe, secure, out of harm’s way and will remain their rightful hands: yours.