International Tax Structuring
Investment into any jurisdiction requires sound taxation advice. An individual, however rich, cannot discount the possibility of ruinous litigation in jurisdictions such as America. Ensuring that investments into active corporate situations are self contained and unable to contaminate other holdings is important. Taxation of trading and investment enterprises can be reduced substantially by a prudent use of tax havens and countries with relevant double taxation treaties.
The holding of a passive investment through a simple tax haven may be enough, but when the investment is into a manufacturing or trading company or group, the treatment of loan interest, royalties and dividends all need to be considered and it is likely that the investing company should be onshore in a suitable jurisdiction with an appropriate tax treaty but where that company is ultimately owned offshore.
Complex corporate structure may be relevant and important. However, if the ownership at the end of the day is traceable back to a specific investor and his family or associates, the business may be at risk in the event of death of one of the investors by virtue of inheritance tax or similar or may be at risk if a business counterparty can “pierce the corporate veil” or otherwise make out a claim against the investors personally. It is usually better for individual investors to settle their corporate interests into a trust or trusts, so that the ownership is separate and distinct from themselves.
Commencing with effect from September 2017, the OECD Automatic Exchange of Information system will operate and confidencial information on a client's banking and investments in one jurisdiction will be notified to the tax authorities in the country in which the client is tax resident. This exchange of information means that the tax arrangments of the client offshore need to be compliant with the law in the country of tax residence and require careful attention to avoid penalties in country of tax residence.
We can form and manage companies in all the tax haven jurisdictions and in jurisdictions best suited for double taxation treaty relief for overseas clients. We can give appropriate advice on the structuring for tax and other purposes and upon the establishment and running of trusts and foundations. We aim to keep the costs to the client reasonable on an initial and annual basis.