How Offshore Companies Can Complement Your Tax Strategy

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For most people, international corporate structures are all about asset protection and very little else.


Concomitant with asset protection, privacy is prized. Those who want to use a corporation to protect and secure their assets do not want their information to be made public.

The desire to keep your financial affairs secret is not only legal; it is entirely proper. For one thing, it is never wise to advertise a high net worth. Predators are everywhere, and high net worth individuals are often victim to frivolous lawsuits.  It is only when you go stealth that you are protected.

Tax Savings

High net worth individuals have to protect their assets from tax erosion to create long-term security for their families and the charitable organizations they genuinely appreciate. Rule number one is, do not pay taxes you do not have to.

The Impact Of Going Offshore

No doubt, going offshore impacts your taxes, but it does not mean you will be able to live tax-free, not by a long shot.  What going offshore will do, is to determine and redefine which taxes you will be liable for, and at what rates you will be taxed — and this all depends on the type of income you generate offshore.

Your salary, if you earn one, or your earned income, will be taxed at the same rate.  It is when you start to generate passive income — whether it is dividends or any other form of income — through an international corporate structure, that the rates you pay start to change.  In some jurisdictions, your investment income will be entirely free from tax.

Choosing A Jurisdiction

Where you set up your international corporate structure is essential. You have to select the country that fits in the best with your needs.

As a rule, domestic assets should remain in domestic structures, but your international assets should be moved to international corporate structures.

No consensus exists on which jurisdiction is the best for this purpose.  The questions you have to ask before selecting an international jurisdiction are:

  • Can you control where you move your assets?
  • Can you control whom you will employ?
  • Can you control what you report?
  • Can you depend on government support to maintain control over your wealth during frivolous lawsuits?
  • Can you control the growth of your wealth over time, something dependent upon taxation rates?


Tax compliance is non-negotiable, and reporting is the basis of compliance.  If you are a US resident, you will, in any event, be required to report on all the earnings and assets of your international corporate structures. There is no method to avoid taxes altogether, no matter what jurisdiction you select and what structure you develop.  What is attainable, is a reduction of taxes, and for this to happen, you have to choose the most appropriate international corporate structure.

Opting For An International LLC

If you want to separate yourself and your assets from the assets of your company, the LLC or limited liability company might be for you.  With an international LLC, you are limiting your liability in any event, to the value of the company.

If it is privacy you want, an international LLC is even more suitable for you.  The structure breeds anonymity. It is, however, more suited for smaller, passive investments. If you own a rental property or agricultural land or if you are receiving regular interest dividends from substantial investment, an LLC is just the thing for you.


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Applications For An International LLC

You can go right down by starting with your self-directed IRA, or individual retirement account.  Your IRA can own a newly established LLC. This will provide you with magnificent levels of flexibility.  You will still have to appoint a custodian for the IRA, but you will be able to control what happens in and to your LLC entirely.

Opting For An International Business Corporation (IBC)

If you want to establish an ongoing business, an IBC would be a better fit for you.  Your IBC can have shareholders, and a board of directors and asset protection is in-built.

With asset-protection in mind, an IBC works. It delivers lower taxes and provides an extra layer of protection between the owners of the business and any legal issues that might arise.

Application For An International Business Corporation (IBC)

Incorporation is surprisingly straightforward in jurisdictions like Belize.  Reporting requirements, believe it or not, are limited and sometimes nonexistent. In terms of freedom and privacy, it doesn’t get any better than that.


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Opting For International Trust

The third option is to form a foreign trust. For starters, if you establish an international trust, you will lose legal control over the assets which are held in trust for you.  So there is that.  What you get is a trustee that acts according to your original wishes to save and grow certain assets and hence protect your assets.

For long-term planners and for those who wish to protect assets for future generations, this is the one. The trust will protect your assets from legal action and high tax burdens.  Despite these advantages, the loss of control is no small matter.

At the outset, you have the option to select either a revocable trust or an irrevocable trust and which one would serve your needs the best, is dependent on the specifics of your situation. Click here to email us and start your project.


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Readers should note that this article is only intended to convey general information on these issues and that FAS CPA & Consultants (FAS) in no way intends for the contents of this article to be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services.  This article cannot serve as a substitute for such professional services or advice.  Any decision or action that may affect the reader’s business should not rely solely on the contents of this article, but should rather be consulted on with a qualified professional adviser. FAS shall not be responsible for any loss sustained by any person who relies on this presentation.  This article is subject to change at any time and for any reason.

Our team is trained to provide you with the necessary information for the formation of your project.

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA I am Certified Public Accountant, specialized in Tax Planning & Offshore Strategies for Real Estate, Hedge/Equity Funds, Fintech, Crypto, Expats, IRS Debt Resolution. You can email me and follow us on Facebook : FAS CPA & Consultants.

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