Offshore Trusts become the most Sought After Tool for Managing Wealth Today
Switzerland leads the way as a reliable location for the development of offshore trusts, as people are looking for alternative measures with regards to how and where they should invest their money.
In today’s fluid financial environment, consumers across the globe are faced with a variety of ways to manage and build their wealth. Simply acquiring income and accruing savings is no longer a solid equation; in this ever-changing environment, accruing savings after expenses is more common, and understanding how to appropriately invest the rest can prove difficult.
Investing is a term that everybody is familiar with; however the process of investment can prove itself to be a minefield when actually trying to establish how to manage your wealth. Since simply placing your wealth in a general, high interest bank account is no longer the desired (or recommended) option, many individuals are now looking to professional wealth management institutions to learn how to correctly invest their wealth. With many unstable economies, widespread political strife and unpredictable social instability across the globe, knowing where to place your assets is an increasingly difficult and significant decision during the asset protection process.
According to Camelot Wealth Management, a service aimed at providing financial education in a number of areas, ‘anyone can learn wealth development, the fundamentals of proper money management and asset protection’. They believe that providing individuals with the right understanding, tools and techniques needed for building wealth and protecting assets is fundamental when it comes to managing your wealth.
Many financial institutions offer a comprehensive set of financial services, ranging from expert financial planning and advice, to international banking services, as well as a global network offering emergency support to customers and their family members. However, with recent concerns over the safety of ones wealth placed in offshore banks, as well as the numerous limitations imposed in the form of tax benefits and charges, many individuals and corporations are looking to alternative services to invest their wealth.
Experts suggest that if you want to grow your wealth, it is better to choose the millionaire’s equation, which is “income minus savings and investments is equal to expenses”. The common recommendation is therefore to invest first; and spend later.
With the range of options available to high-net-worth individuals, knowing how and where to invest your wealth is a crucial question. According to Regina Hauser, director of sustainable business organization, The Natural Step Network, ‘how we invest our money matters’. In today’s unstable economic environment, many individuals and corporations are seeking alternative solutions when it comes to investing their assets.
One form of wealth management that has a solid reputation for financial security is offshore trusts. Despite being traditionally considered as exclusive to the extremely wealthy, offshore trusts are fast becoming an increasingly popular choice amongst those who wish to securely invest their assets. Further still, they are becoming an increasingly accessible commodity for a range of individuals, to the benefit of both the founder and the jurisdiction. As law professor Rose Antoine argues:
“Trusts are a key tool for many offshore transactions and offshore jurisdictions’ laws and are often in advance of onshore jurisdictions’ laws with respect to trusts”.
Although traditionally reserved for only the wealthiest individuals, trusts have increased in popularity in recent years and are no longer considered restricted to the wealthiest minorities.
Many individuals are now looking to offshore jurisdictions to open up an offshore trust. With the prospect of low or even zero taxation fees imposed along with high levels of security and privacy, offshore trusts are a popular choice amongst many high-net-worth individuals. An expert and experienced professional in the field of offshore trust formations stated:
“Opening a trust, in our tumultuous and uncertain economic, financial and social climate, is an excellent form of asset protection for those who are uncertain of how to protect their wealth. Trusts are tailor-made with the founders’ needs in mind, and thus will go the distance in ensuring the solid security and protection of one’s wealth, for future benefit.”
Upon establishing an offshore trust within a particular jurisdiction, the trust will be formulated based upon your specific desires, and bound in a trust deed. This deed will state the precise direction of the trust, along with the entitlements of the beneficiaries. But as deeds are becoming the more common option for investors, greater pressure is being placed on the reliability of the trust: “the focus and pressure on trustees from regulatory bodies and stakeholders has never been greater” said a professional within the industry.
For those who want to maximize their assets, the first step is to choose a jurisdiction in which to invest your wealth. This is a crucial step as there are a number of risks involved in making an investment that entails large sums of money. In addition, choosing a region or jurisdiction to invest with is equally crucial, as there are many jurisdictions that have larger charges on high amounts of wealth.
There are approximately 25 jurisdictions that offer offshore trust services, including Austria, Panama and Dubai. Choosing an offshore jurisdiction to open your offshore trust with is a very important step, as each jurisdiction offers its own rules and regulations in compliance with the rules and regulations imposed by the financial regulatory body.
A jurisdiction that has increased in popularity in recent years for offshore trust formation is Switzerland. Despite being surrounded by neighboring countries with high tax rates, Switzerland has proved itself as an exceptionally popular offshore jurisdiction to open an offshore trust with. Since July 2007, Switzerland trusts have seen a steady increase in volume, and it is easy to understand why. With the continuing development of Switzerland’s financial centre along with Switzerland’s strong privacy laws, many investors are choosing Switzerland as their preferred location for offshore trust formation. And as trusts are becoming more and more accessible to a broad range of individuals and wealth ranges, Switzerland is seen as a prime jurisdiction for wealth management and trusts.
Speaking from a UK-based law firm, a source stated “lots of wealth from high-value individuals, especially from the Middle East and Eastern Europe, flows through [Switzerland].” This is because not only is Switzerland an excellent location geographically, but financially, it boasts one of the strongest economies in the world in a politically stable environment.
In addition to the above, Switzerland offers a safe, stable and low-risk environment for your wealth to be placed in, with low political, economic and social instability. Furthermore, offshore trusts are recognized and well-respected legal structures that offer effective tax planning benefits.
Where offshore trusts were traditionally acknowledged as hugely complex and inaccessible, today, they are considered to be largely more reachable, offering substantial privacy benefits and tax advantages.
In today’s competitive market and with a broad range of jurisdictions to choose from, opening an offshore trust is no longer a procedure shrouded in secrecy and reserved for the extremely wealthy. In addition, with the increase in legislation highlighting privacy laws, company’s providing offshore trust services to individuals are required to follow strict compliance regulations, particularly within EU based countries. This increases Switzerland’s desirability as a respectable offshore trust location, as it ensures that investors are not placing their assets in an undependable territory.
No longer reserved for the extremely wealthy, many people are now choosing offshore trusts to help them control and manage their wealth. Whichever jurisdiction you choose to invest with, opening an offshore trust will prove a valuable means of ensuring your assets are guaranteed to go the distance.
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Category: Wealth Management
