Who Needs An Offshore Corporation?
Oct. 28, 2014, Belize City, Belize: One of the most common reasons to establish an offshore corporation is to hold foreign property.
Dear Live and Invest Overseas Reader,
"The question I get more than any other?" Lief Simon asked the audience at his Global Asset Protection and Wealth Summit in Belize last week.
"That'd be: 'What structure should I use?'"
"Right," added attorney and fellow panelist Joel Nagel. "That's probably my most frequently asked question, too.
"People make an appointment to see me, and then they show up at my office with a file folder in their hands," Joel continued.
"'I just came back from a vacation in the Cayman Islands,' they tell me. They're smiling. They've got nice suntans. And they've got these file folders...
"'While I was there,' they continue, 'I set up this corporation. Now I'm wondering,' they say, 'what should I do with it?'
"I give them the only answer I can, which is: I have no idea.
"In almost every one of these cases, the client set up the structure because he thought it was a cool thing to do or somebody told him it was something he ought to do. His golf buddy at the country club has an offshore corporation, and he thinks he needs one, too."
"Right," Lief interjected, "when in fact, this should work the other way around. You should start with a purpose. Have a goal in mind first, then go out and find the structure and the jurisdiction that serve that purpose."
Which gets to the real question:
Why would anyone want an offshore corporation?
One of the most common reasons to establish a foreign corporation is because you're buying a piece of property overseas. A foreign corporation can be the best way to take title.
"I've bought real estate in maybe 25 countries at this point," Lief explained, "and I own property right now in more than a dozen. Each purchase has been handled differently. Sometimes I've taken title in my own name, sometimes I've formed an entity to take title. Sometimes I use the same entity to hold a second or third piece of property, sometimes when making a new purchase I form a new entity.