Offshore Companies

Offshore Companies

Offshore Companies

Publisher Optimum Investments AG F端rst Franz Josef Strasse 5 Postbox 478 9490 Vaduz Principality of Liechtenstein Tel: +423 263 68 68 Fax: +423 263 68 69 E-Mail: info@optimuminvestments.li

Overview Offshore Companies 04 05 06 07 08 11 12 13 14

What is offshore?

Advantages of Offshore Companies Offshore – for whom?

Conditions for Offshore Companies Where to go offshore Who assumes responsibility Offshore center “BVI” Offshore center “Panama” Offshore center “Liechtenstein”

Optimum Investments 23 Our services 24 Disclaimer

Offshore Companies What is offshore?

Offshore companies, as compared to “onshore” companies, have the advantage that offshore business and offshore assets are not subject to the tax obligations of the owner’s country of residence.

You would establish an offshore company if you would like to legally, anonymously and under utter discretion move your assets and your profits to this “offshore land”. Neither your government nor any private person has the possibility of obtaining any information about your assets and you would thus be able to save money on taxes.

Tax

$ 100'000.00

$ 70'000.00

Tax – Offshore

$ 99'500.00

A small example

Advantages of Offshore Companies

Following are a few of the most important reasons why you should go offshore: à Anonymity à Nominee

services through lawyers à Highest level of privacy protection à Flat tax rate à No taxation on any kind of income à No requirements on profession or financial standing à Business can be conducted internationally

Offshore Companies

With the establishment of an offshore company you can benefit from many advantages.

Offshore – for whom?

There are two reasons why corporations or businesspeople incorporate an offshore company.

1. There are those who would like to move their business there to save money, whether on wages, cheaper fabrication or on taxes and 2. There are those that just go offshore to save on taxes, without opening up an actual business.

The amount of companies based offshore is large, since as well as big banks and insurance companies, there are also smaller companies with profits as little as USD 50’000.00 a year. Often in these cases the owners have never actually seen the land where they have their money.

Following are a few top industries that usually have offshore companies: à Shares

and foreign exchange management à Property management à Provision of service à Asset

Certainly everyone can open up an offshore company not just the ones listed above.

Conditions for Offshore Companies

Offshore Companies

Many corporations open an offshore company just to save on taxes and to manage their assets anonymously. They don’t actually plan to operate there or to open up a proper company, but there are still a few requirements even if you don’t actually do business from there. The most important ones are that you have a valid business address where people answer the phone and you need to be able to certify that you have a business structure and postbox.

Where to go offshore

Liechtenstein a Tax Haven Today the tax-conscious investor is wooed by more than 50 tax havens or offshore finance centers worldwide. Their principle purpose is to secretly and securely hold assets in a tax-free environment in a variety of investment structures thereby minimizing taxation, ensuring asset protection and providing access to investment opportunities which may not be available onshore.

Offshore structures may also be used in order to transact such business that must not be tied to a particular jurisdiction, thereby permitting active business income to be earned and accumulated in a zero tax environment.

It is difficult for the investor to make a choice. The tax laws/tax treaty network of the investor’s home country are the first and foremost factor when choosing a tax haven.

Further considerations which will rapidly narrow the range of possibilities are: Political Stability The jurisdiction must be politically stable and free of social or racial tensions enjoying a history of a well supported, democratic government. Otherwise it should be kept in mind that the current regime which is encouraging foreign investment, may suddenly be overthrown by radicals who may confiscate foreign assets.

The tax haven should be easily accessible from land via motorways or rail.

Stable Currency The chosen offshore center must have a strong currency with absolutely no history of exchange controls. It must be possible to transfer funds in and out of the country easily without official interference. If the local currency is not linked to hard currency, then the investor may be required to maintain holdings in a foreign currency thereby incuring the risk that the state may confiscate foreign currency accounts in order to stabilize its trade deficit.

Asset Protection Asset Protection can only be guaranteed if the tax haven in question neither recognizes nor enforces foreign judgements and declines legal assistance in civil matters. Moreover, legal assistance is only granted in criminal matters.

Offshore Companies

Geography Not only must the chosen tax haven be politically stable, but the stability of its neighbouring countries must in no way be threatened. The tax haven should not be in a strategically sensitive part of the world, nor should it be under the military umbrella of a major power who could exert pressure on local authorities.

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Minimum Regulation of Commercial and Financial Transactions Business can only be effected efficiently if it is subject to minimum official supervision regarding authorizations and regulations.

Conclusions The increased tendency of high net worth individuals to transfer their wealth offshore as well as for multinationals to channel certain transactions through offshore structures is, as a global phenomenon, a reaction to postwar geopolitics, which have fuelled confiscatory onshore taxation and unpredictable world markets.

The trend has been technically supported by the computer/communication revolution.

The human propensity to seek certainty, shelter and stability in an increasingly volatile world is incorrigible and thus the offshore trend is irreversable. The offshore industry will continue to flourish. Increasingly more offshore centres will compete for a greater share of the ever growing market so that the potential offshore user is well advised to seek specialised professional advice in selecting a jurisdicition.

Who assumes responsibility

Bank Form A

Ben Owner

Communication

Bank Account

Shares

Administration Corporation

Who assumes responsibility

Fiduciary (Trustee)

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The mandate agreement establishes the entire relationship.

Depending on the wishes of the beneficial owner and the acceptance by the bank, beneficial owners may be given – for example – signatory powers for the account which must be documented by a directors‘ resolution. If the client so wishes, Optimum Investments AG may assume – besides being responsible for the good standing of the company – certain degree of responsibility.

Offshore center “BVI” 12

The British Virgin Islands have a number of unique attributes that make them a great asset protection jurisdiction for corporations and foundations.

Advantages à No

taxes on offshore derived income à No reporting à No currency devaluation à US Dollar currency à Stable country à Neutral country à Well established banks

Disadvantages à Registered à Minimum

shares one member of the board has to be from BVI

Offshore center “Panama”

à Offshore

derived income is not taxed and does not need to be reported. You can have a Panama Corporation, and/or Foundation that banks in Panama and has an office in Panama and yet will not pay any Panama taxes if all the income is derived offshore. à Panama uses the US Dollar as its currency. No currency conversion costs. No currency devaluation problems or issues as in most of the smaller tax haven countries. à Panama is stable. It is a neutral country. à Panama Banks are stable and well established with substantial assets. The privacy law applies to the Panama Bank. à You do not have to physically go to Panama to establish a corporation, or a foundation in Panama – you can do it through us. à Panama companies are not required to accounting or auditing. à Accounts can be opened anywhere worldwide, but then the laws of that country apply.

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As well as the BVI, Panama also offers a number of unique attributes that make this a great offshore country.

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Advantages

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à Island

Offshore Companies

Offshore center “Liechtenstein”

of Tranquility in a Troubled Sea Most Stable Currency Worldwide à Secrecy à Investor Anonymity à Freedom of Confiscation à Legal System à Corporate Mobility à Infrastructure à Judicial System à Ready Access to Important Markets à The

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Island of Tranquility in a Troubled Sea Liechtenstein is the last German Duchessy. Liechtenstein together with Switzerland are the most politically stable countries in the world. The basis of Liechtenstein’s political stability is a combination of direct and parliamentary democracy rooted in a traditional, constitutional monarchy which has given the tiny Principality a degree of flexibility sufficient to survive the 20th century without any political upheaval. Almost every other state with the exception of Switzerland has experienced a political upheaval or state of war since 1900. Liechtenstein remained politically neutral throughout both of the wars.

As the Austro-Hungarian monarchy crumbled, Liechtenstein severed its close traditional ties with Austria and looked to a stable, democratic and neutral state as a new economic partner.

It dissolved its monetary/customs union with Austria in order to enter into parallel arrangements with Switzerland.

The Most Stable Currency Worldwide Liechtenstein is the only country which has a monetary union with Switzerland and its currency is still backed by gold. The Swiss Franc is the most stable currency in the world having survived the entire century without ever experiencing a major devaluation such has been the case with the German Mark, the British Pound Sterling, the American Dollar and even the Yen.

Linked to a stable currency and political environment is the public debt. Switzerland and Liechtenstein have kept their public spending in control without resorting to draconian measures, in particular in the area of social welfare.

Secrecy Confidentiality is of the essence in tax havens, most of all bank secrecy laws. However, depending upon the political factors, in particular if the tax haven has a history of being under the political sphere of influence of a major onshore country, it is questionable if the offshore finance center can really enforce the laws when under extreme pressure.

Liechtenstein not only has tough bank secrecy laws, but also the political independence necessary to resist external pressures to abrogate such laws.

Investor Anonymity The absolute political independence and the historical as well as constitutionally entrenched neutrality of the Swiss-Liechtenstein constellation ensure that regarding Government officials investor anonymity can be absolutely guaranteed.

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The Swiss Franc has never been subject to any currency exchange controls which prohibited the sale of this currency.

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With the exception of Austria and Switzerland there are no bilateral tax treaties and thus no obligation to transmit information to foreign tax-authorities.

Minimum Regulation of Commercial and Financial Transactions With few exceptions international business transacted through a Liechtenstein company is not subjected to any official regulation whatsoever. Liechtenstein companies are required to keep books or to submit financial statements, however by foundations there is no need to submit financial statements.

Freedom of Confiscation The traditional neutrality of the Swiss-Liechtenstein constellation is a sure guarantee for freedom from confiscation. Assets held by Liechtenstein companies or trusts have never been confiscated through foreign authorities for political reasons.

Switzerland and Liechtenstein, which is mainly diplomatically represented through Switzerland, have traditionally been viewed as absolutely neutral. No matter what political crisis develops anywhere in the world, the assets held by Liechtenstein companies will never, for political reasons, be frozen.

The ultimate ownership of the Liechtenstein Company will never be disclosed to any authority.

Liechtenstein has adopted the Anglo-Saxon trust as well as the business trust, being an incorporated trust with limited liability which may pursue commercial purposes, into its law.

The Liechtenstein company law is over 70 years old. It is a liberal law with very few mandatory requirements. The tax code has been in force, essentially unchanged, for over 70 years, the civil code for over 150 years and the general commercial code for over 125 years.

Corporate Mobility Offshore specialists have increasingly come to recognize the importance of corporate mobility. It must be possible for a company or trust to emigrate from one offshore jurisdiction and to immigrate to another and even to merge with a company in another jurisdiction.

The Liechtenstein company law has since its inception over 70 years ago, provided for corporate mobility which has now just recently become highly fashionable in other international business company jurisdictions.

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Legal System The rule of law and the belief in a democratic, humane, equalitarian and liberal society is deeply entrenched in the Liechtenstein mentality.

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Infrastructure It is absolutely essential that the offshore financial center have well-trained accountants, lawyers and other experts who can assist in structuring and adapting offshore arrangements. A sophisticated banking/finance, legal and administrative infrastructure must also be in place. Lawyers and fiduciaries must be adequately insured for professional liability.

Any Liechtenstein trust or offshore company must have at least one director/trustee who is licensed as a trustee or a lawyer in the Principality of Liechtenstein and resident in Liechtenstein in order to ensure that he or she is at all times subject to the control of the Liechtenstein Authorities.

The professional aptitude required of a trustee is unusually high as compared to international standards. A professional fiduciary must also have professional experience in the financial services sector prior to being licensed. Both attorneys-at-law and professional trustees are required to have liability insurance.

The Liechtenstein Banking system can be considered as complementary to the Swiss Banking system, the only difference being that Liechtenstein Bank Secrecy laws are far more rigorous than the Swiss laws.

Liechtenstein Banks are supervised purely at the state level.

As one of the oldest offshore jurisdictions, Liechtenstein has a judiciary which has, for more than half a century, competently adjudicated upon litigation concerning offshore structures.

Liechtenstein law permits virtually all matters concerning company/commercial law to be determined by binding arbitration.

Please note: This only applies if you opened the account in Liechtenstein. If you open it elsewhere the laws of that place apply.

Ready Access to Important Markets Such offshore companies as trade or carry on commercial activities should have access to important markets. Liechtenstein’s EEA membership ensures such access.

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Judicial System It is extremely important that adequate mechanisms for dispute resolution be in place. The chosen haven must have a competent judicial system. Procedural law should permit a wide range of matters to be decided by binding arbitration thereby avoiding the publicity of a trial. Such arbitration awards should be enforceable.

Optimum Investments

What we offer you

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à Consultancy

Optimum Investments

Our services

in offshore-company law of different countries and administration of offshore companies à Formation and administration of Liechtenstein Foundations à Asset management à Acting as nominee directorships in offshore companies à Carrying out statutory amendments during lifetime of the vehicles à Formation

Disclaimer

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Please note Optimum Investments AG does not provide legal or tax advice and this presentation does not constitute such advice. Optimum Investments AG strongly recommends to all persons considering the products or services described in this presentation to obtain appropriate independent legal, tax and other professional advice.

This presentation is for your information only and is not intended as an offer, or a solicitation of an offer, to buy or sell any product or other specific service. Although all pieces of information and opinions expressed in this presentation were obtained from sources believed to be reliable and in good faith, neither representation nor warranty, express or implied, is made as to its accuracy or completeness.

The general explanations included in this presentation cannot address your personal investment objectives, your financial situation as well as your financial needs. Certain products and services are subject to legal restrictions and cannot be offered worldwide on an unrestricted basis. All information and opinions as well as any prices indicated are subject to change without notice.

Approved and issued by Optimum Investments AG, this presentation may not be reproduced or copies circulated without prior authority of Optimum Investments AG. Vaduz, October 2007

Optimum Investments AG, F端rst Franz Josef Strasse 5, FL-9490 Vaduz, www.optimuminvestments.li