Explore Offshore Options for Protection

September 16, 2008
Jane Gibson, MD

Physician's Money Digest, March15 2003, Volume 10, Issue 5

When most of us think of shelteringour wealth outside the country, weare apt to think of an offshore trust.However, trusts are disturbingly expensiveto create. An international businesscorporation (IBC), on the other hand, canbe set up for a fraction of the cost of mosttrusts and provides equal or better assetprotection with far greater flexibility.

An IBC offers a corporate structure,usually operating as an investment ortrading company. You can buy and sellthe same types of investments youwould onshore, such as stocks andbonds, through an offshore brokeragefirm (this is often a brokerage firm in theCayman Islands). With a little effort, IBCscan easily be adapted to resemble andfunction as mutual funds, limited partnerships,limited liability companies, etc.

WHY THE BAHAMAS?

Since the Bahamian governmentenacted the International BusinessCompanies Act in January 1990, morethan 50,000 IBCs have been formedthere. The basic setup of the IBC is verysimilar to that of the Nevada corporation.You maintain anonymity by using anominee officer to fill the corporate officer positions, and ownership is in theform of bearer shares.

Names of shareholders are notrecorded in the public registry. No filingof financial statements or annual returnslisting shareholders is required. Meetingsof directors and shareholders maybe held by telephone, fax, or other availableelectronic means.

Anonymity is also aided by strict bankingsecrecy laws. The Bahamas and theCayman Islands, to name a few, prohibitthe disclosure of information pertainingto a client's affairs to a third party withoutyour express written permission.

The Bahamas also provides 2 veryimportant things in an offshore location:stability and accessibility. A member ofthe British Commonwealth, the Bahamasboasts the third oldest democratic systemin the world. In addition to easy transportationaccess, worldwide telephoneand fax services are excellent. Calls to andfrom may be dialed directly. Moreover, UScitizens may enter without a passport.

The Bahamas and the Cayman Islandsare the largest offshore financial centersin the Caribbean, with more than 600banks and trust companies. Experiencedand capable attorneys, accountants, andbankers are readily available. There areno restrictions on the movement ofmoney, investments, corporations, ortrusts into and out of these countries.

In addition, an IBC and its shareholdersare exempted from the payment of businesslicense fees, income taxes, corporatetaxes, and capital gains taxes. There areno estate, inheritance, succession, or profitstaxes payable in the Bahamas either.

HOW TO USE AN IBC

For the most part, your IBC will beused to protect your liquid assets, whileyou maintain control of your wealth andinvest it as you wish. What about beingable to move money from offshore toonshore and vice versa? To do this properly,you really need to have a Nevadacorporation also. With this, you canmove money between offshore andonshore corporate bank accounts, viawire transfer, and be able to maintainanonymity. Remember the caveat emptorof asset protection: If a judge canfind it, they can seize it.

There are numerous advantages ofusing onshore and offshore corporationsfor asset protection. Keep in mind thatto protect your assets, you must implementyour strategy before any action isbrought against you. As a fellow physician,I understand the numerous demandsmade of your time, but I urge youto put complacency aside and take stepsnow to protect your financial well-beingbefore it may be too late.

Jane Gibson, MD, is a practicing family physician and an asset protection consultant with

Personal Wealthguard. She welcomes questions or comments at 270-846-3795 or jcgibson@premiernet.net.