OFFSHORE PERSONAL HOLDING COMPANY (OPHC)

An OPHC is an offshore corporation established for the International Investor's U.S. Assets.  The International Investor owns (directly or indirectly) the stock of the OPHC and appoints the Directors and Officers of the OPHC.  The corporate agent, in the offshore jurisdiction, usually acts as the director and officer of the OPHC.

The International Investor, then transfers his U.S. assets to the OPHC.  The OPHC can select a U.S. Brokerage Firm to invest the liquid U.S. Assets (e.g. Stocks, Bonds, etc.) of the OPHC.

 *  Minimize Taxation

 After the transfer, the International Investor owns stock of the OPHC, which is not a U.S. Asset subject to  U.S. Estate Tax. 

 *  Provide Confidentiality

 The laws of most foreign jurisdictions usually require that the name of the OPHC, its local agent, its local  office and its First Director be registered in the commercial registry of the foreign country.  The OPHC  can name its corporate agent, in the offshore jurisdiction, as its registered agent, its registered office and  as its First Director. To further preserve confidentiality and if permitted by the laws of the country where  the foreign corporation is organized, the shares of the OPHC could be issued in Bearer form.  With such  shares and with the listing of the corporate agent in the commercial  registry where the OPHC is  incorporated; the identity of the beneficial owner of the foreign corporation cannot be discovered.

 *  Retained Authority

 The OPHC operates pursuant to the authority conferred upon it by the International Investor.   Additionally, through the issuance of a Power of Attorney from the OPHC to the International Investor;    the International Investor can choose Brokerage Firms as well as the individual investments owned by the  OPHC.  Furthermore, the International Investor retains the authority to liquidate the OPHC and regain  possession individually of all of the OPHC's Assets.

 *  Protection against confiscation of property, protection from forced heirship and transmission of wealth

 The OPHC does not, in and of itself, aid the International Investor in protection against confiscation of property, protection from forced heirship, nor in the transmission of his wealth.  For this reason  we suggest that the shares of the OPHC be held by an Offshore Trust.
 

OFFSHORE TRUST 

A Trust is a legal entity created by contract under the law of countries having the legal traditions of the English common law.  The Trust is created by a document ("Trust Agreement") by which the assets are transferred by one party ("Grantor") to a second party ("Trustee") for the benefit of designated persons ("Beneficiaries").  A Trust Agreement identifies the beneficiaries, establishes the manner in which the Trustee is to hold, invest and distribute the assets; describes the responsibility of the Trustee to the Grantor and the Beneficiaries.  There are Income Beneficiaries who are entitled to the income from the Trust and there are Principal Beneficiaries who are entitled to receive the principal upon the termination of the Trust.  Usually, the International Investor will be the income and principal beneficiary during his lifetime.

The International Investor ("Grantor") then transfers the stock of the OPHC to the Offshore Trust.  The Offshore Trust owns the stock of the OPHC and the OPHC owns the U.S. Assets.
 

 *  Minimize Taxation

 After the transfer, the International Investor is the Beneficiary of the Offshore Trust which owns stock of  the OPHC, which is not a U.S. Asset subject to U.S. Estate Tax. 

 *  Provide Confidentiality

 The laws of most foreign jurisdictions usually require that the Trust, the Trustee, the name of the OPHC,  its local agent, its local office and its First Director be registered in the commercial registry of the foreign  country.  The OPHC can name its corporate agent, in the offshore jurisdiction, as its registered agent, its  registered office and as its First Director. To further preserve confidentiality and if permitted by the laws  of the country where the foreign corporation is organized, the shares of the OPHC could be issued in  Bearer form.  The Bearer Shares are held by the Trust.  The Trustee of the Trust could also be the  corporate agent.  With such shares and with the listing of the corporate agent in the commercial registry,  as the OPHC's  corporate agent and Trustee of the Trust; the identity of the beneficial owner of the Trust  and the OPHC cannot be discovered.  After the International Investor's death, the confidentiality  continues, since the trust is able to transfer its assets without any governmental probate or inheritance  proceeding or approval.

 *  Retained Authority

 The OPHC operates pursuant to the authority conferred upon it by the International Investor.   Additionally, through the issuance of a Power of Attorney from the OPHC to the International Investor;    the International Investor can choose Brokerage Firms as well as the individual investments owned by the  OPHC.  Furthermore, the International Investor retains the authority to liquidate the OPHC and regain  possession individually of all of the OPHC's Assets.

 *  Protection Against Confiscation of Property

 The Offshore Trust owns the shares of the OPHC and the International Investor's Creditors and other  Government Agencies are thereby prevented from confiscating the shares of the OPHC.

 * Protection From Forced Heirship

 The Offshore Trust owns the shares of the OPHC, both before and after the death of the International  Investor.  The shares of the OPHC or the benefits therefrom, pass according to the Grantor's wishes,  which are stated in the Trust Agreement.  There is no Governmental inheritance of other probate  proceeding at which a forced heirship claim could be decided. 

 *  Transmission of Wealth

 The Trust Agreement, which establishes the Offshore Trust, also acts as a will substitute.  The Trust  Agreement reflects the International Investors wishes as to who he desires to have the property which is  held in trust after his death.  A Trust Agreement identifies the beneficiaries, establishes the manner in  which the Trustee is to hold, invest and distribute the assets; describes the responsibility of the Trustee to  the Grantor and the Beneficiaries.

 The Offshore Trust owns all of the assets, both before and after the International Investor's death.  It will be able to distribute its assets, according to the International Investors wishes, without any governmental proceedings or approval.
 

LOCATION OF THE OPHC AND THE OFFSHORE TRUST

The choice of countries in which to establish the OPHC and the Trust depend on factors including: 

 1. Absence of local taxation,

 2. Availability and enforcement of bank secrecy,

 3. Cost of organization,

 4. Amount of annual franchise and registered agent fees,

 5. Availability of reliable and experienced management and 

 6. The political and economic stability of the country. 

Among the countries commonly used are Aruba, Bahamas, Barbados, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, Netherlands Antilles, Panama and The Turks and Caicos Island.  Each of these countries have positive and negative aspects.  Based upon the above mentioned factors, the British Virgin Islands and the Cayman Islands rank the highest.  Therefore, we generally recommend establishing an OPHC and/or an Offshore Trust in the British Virgin Islands or the Cayman Islands.  Furthermore, as former British Colonies they have laws based upon common law, which is necessary for the operation of a trust.  As between the British Virgin Islands and the Cayman Islands, the products are essentially the same however, the cost to organize an OPHC and a Trust in the BVI is much less expensive than the Cayman Islands.