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7 common Offshore Foundation Misconceptions explained

By: Doug Sitenal

Many people do not understand the "offshore foundation".

An offshore foundation is used to manage and control assets. This is accomplished through a secret letter of wishes. This letter is, as it's name implies, a private document that is not available to the public. Under no circumstances, is this letter ever required to be made public and is protected by Panama law.

Taxes never decrease and never end. Even death is now a taxable event. To protect oneself, many people are turning to legal alternatives. An offshore foundation, in particular, a Panama foundation is the most secure alternative. An offshore foundation, in addition to being a rock solid asset protection vehicle, is able to pass on assets according to the secret letter of wishes, bypassing the tax laws (legally).

Who can own a foundation under Panama law? Nobody. That's right. A Panama foundation cannot be legally owned by anyone. It is it's own entity. This one aspect makes it a very powerful asset protection vehicle. Also a foundation carries respect that a simple, anonymous bearer share corporation (also available in Panama) does not get. This is important sometimes, when entering into contracts with other companies or opening bank accounts in some (but certainly not all) jurisdictions.

One of the greatest features of an offshore foundation is that a judge or court cannot order funds to be repatriated because a foundation is not owned by anyone. The order would be illegal and no judge would make an illegal order, and if he did, it would easily be overturned.

Many people ask why they need a corporation and a foundation. Legally a foundation cannot engage in business activities, like marketing and selling a product. A foundation can, however, own an offshore company. The offshore company can then engage in business activities. This is the most common and safe asset protection techniques used in offshore banking and asset protection today.

All too often, the death of a family member causes rifts and fights among family members. These fights take place in the courts as family members try to invalidate your wishes through some technicality, and overturn your onshore trust. An offshore foundation, however, is strictly enforced by Panama courts, which will not put up with silly legal challenges, often used onshore. Time and again, the offshore foundation has proved impossible to overturn and thus prevents family feuds from starting over your assets.

The foundation is unique because it cannot be owned by anyone and it does not pay taxes on any funds it holds (as long as the funds are not generated by business in Panama -- ie. You cannot open a bakery in Panama and not pay taxes using this vehicle.) All money that is not generated in Panama is held tax free which makes it the perfect part of any tax plan.

Article Source: http://ezine-articles-planet.com

If you thinking about an Asset Protection setup you may want to read additional informlocated ation about the Panama Offshore Foundlocated ation located at offshorelegal.org
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