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All that glitters is not gold. The old adage is often true but in today

In the present scenario there are numerous ways to invest your money and keep it safe. You can even invest your money globally and ensure that you get good returns from your offshore investments.

Here we would be discussing three basic ways of global investing. These investment strategies are based on legal foreign entities. They are:-

1. IBCs ( International Business Companies).

2. LLCs ( Limited Liability Companies).

3. Foreign Trusts.

Lets take a look at the various legal entities that exist and which provide a method of investment that would ensure that your money survives the vagaries of the markets and gives you ample opportunities for investment.

General overview of the various legal structures:-

There are three legal structures that we have to explore. Lets take a look at them one by one.

• IBC:-

IBC is a term used to define a variety of offshore corporate structures. Common to all IBC’s are the dedication to business use outside the incorporating jurisdiction, rapid formation, secrecy, broad powers, low cost, low to zero taxation and minimal filing and reporting requirements. An increasing number of offshore jurisdictions are permitting the use of nominee shareholders, directors and officers.

Another feature that is common to all IBC

When asset protection planning was a new concept that was not well understood, many lawyers viewed it with suspicion. Some even questioned whether it was ethical. Today, however, the tables have turned.

Asset protection planning has become a well-recognized area of practice with many lawyers specializing in this area. Many articles, magazines, and treatises have been written on the subject.

Within the last 10 years, close to 20 countries and four states have passed some form of asset protection trust legislation.

Today, many estate planning attorneys and other wealth planners who have at least a working knowledge of the concepts involved in asset protection planning are of the view that it is a necessary component of planning. Many planners feel that the failure to advise a client about asset protection planning options may be grounds for a claim of malpractice.

Although asset protection planning has made strides, it was often done in isolation without regard to the client’s overall estate plan. Similarly, many estate planners did not provide for the lifetime side of estate planning. In other words, without regard to lifetime asset preservation, many estate planners focused on tax mitigation at the time of death, avoidance of probate, the smooth transition of property, and making sure the deceased’s disparities wishes were followed. As planning principles and concepts have evolved, the wealth planning community is uniting these two disciplines more and more into one integrated estate planning process.

Our focus is however on the asset protection component of the process.

General Description and Overview:-

Asset Protection Planning may be defined as the process of organizing assets and affairs in advance so as to safeguard them from loss or dissipation. Stated another way, wealth may be more or less vulnerable to risk, depending on the nature of the property and the manner in which the property is held.

Thus, at least in part, the asset protection component of the IEP will involve reorganizing the manner in which property is held so that it is less vulnerable to threats than it otherwise would be.

Asset protection planning is broader than simply planning for the possibility of future litigation. Clients will be motivated to plan for different reasons, not necessarily tied to the possibility of litigation.

Thus, a client in a civil-law jurisdiction may desire to achieve testamentary freedom and avoid the forced heir ship provisions applicable in his home country; a client residing (or with assets) in a politically or socially volatile part of the world may seek to protect his accumulated wealth from the various threats posed by such instability.

However, the asset protection component of an IEP is not to be used to:

• Hide Assets

Planning to or “hiding” assets can be dangerous; the dangers arise from the likelihood that a client will have to choose between protecting assets and committing perjury if he becomes involved in litigation. Whether or not litigation ever arises, a client may face difficult decisions each year when the client’s Form 1040; full disclosure on a return is inconsistent with planning based on concealing assets. Further, hiding assets may result in criminal prosecution. Finally, the tangled web that often results from such planning is inconsistent with the goal of creating a user-friendly IEP.

While many clients appreciate the confidentiality that can be obtained through an IEP, a proper plan will not rely on secrecy for its efficacy.

• Defraud creditors

There is some uncertainty as to when asset protection planning can be implemented (and the extent to which it can be implemented, if at all) when a client has a pending or expected legal threat. This uncertainly is much less prevalent today that in the past.

The easy clients are those with neither pending nor threatened claims. They just want to protect against the unexpected. The difficult clients are those on the brink of bankruptcy (although pre-bankruptcy planning may help). There is a vast gray area in between.

Fraudulent conveyance law varies by state; there is also some Federal fraudulent conveyance law. A statutory body of fraudulent conveyance law applicable to certain situations exists at the federal level as well. For the good of the client and the planner as well, any asset protection planning must be implemented within the bounds of propriety as defined by reference to applicable fraudulent conveyance law.

The common-law system favors the free alienability of property; an individual without creditor concerns is free to dispose of his property as he sees fit, whether in the form of charitable gifts or gifts to children, to a spouse or in trust. Fraudulent conveyance laws tend to focus not on who is the transferee, but on the transferor’s intent at the time of the transfer.

Fraudulent conveyance law generally protects present creditors and subsequent creditors from transfers made by a person who is (or foreseeably will become) their debtor. However, “subsequent creditors” does not include every person who becomes a creditor in the future; there is also a “future potential” class of creditors.

The distinction is clarified by a Florida decision, 1 which stated that asset transfers are permissible as to one’s possible creditors, but not as to one’s probable creditors. The operative inquiry is whether the client has any outstanding judgments, and whether he has any litigation or investigations pending, threatened or expected 2.

• Evade Taxes

Some U.S. clients and their advisors are attracted to foreign-based planning by hoped-for tax advantages. As relatively few tax maneuvers involving foreign entities exist today for the global investor, a well designed Integrated Estate Plan (IEP) will have no particular income, gift or estate tax advantage other than those that can be accomplished through “conventional” inter vivo or testamentary planning.

Importantly, a well-designed IEP will have no particular income, gift, excise, or estate tax disadvantages either, whether from the domestic or foreign standpoint. Both the planner and the client should be aware on an ongoing basis that certain tax issues will exist in the IEP setting. These tend to be not much different from (nor much more involved than) those associated with other types of entities than clients and planners are familiar with. Although there may be additional government reporting obligations (depending on the nature and design of the overall planning structure), neutrality in terms of tax liability will therefore generally prevail under an IEP.

The goals of the asset protection component of IEP are varied but all must be addressed to create a high-quality plan. The plans must be user-friendly or they are doomed from the beginning due to the client’s discomfort with an unfriendly plan. Since being a party to a lawsuit is often a loss in the client’s mind, plans must be drafted to deter litigation. The plan must provide an incentive for an early and cheap settlement if it fails to deter the litigation in the first place. The net effect of the deterrence or an early settlement is to level the litigation playing field between the plaintiff and the defendant. This leveling enhances the client’s bargaining position. Any plan must be flexible enough to provide options as the game is played because litigation may not come from the originally considered source. The overall goal of any plan is for the client to ultimately win the game. Once goals are discussed with the client, the planner should incorporate them into both the asset protection and estate planning components of the IEP.

Few areas of the law are as complex or misunderstood as the law applicable to offshore trusts and international wealth preservation planning. Here we have tried to address common questions and issues associated with an international wealth preservation structure for the high net worth individual or family with assets at risk in today

The stock market is a volatile being that has a life of its own. There exist numerous shades and hues to the market