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Frequently Asked Questions

In order to help you, the visitor, find your answers quickly, we provide a list of Frequently Asked Questions. Here you can find quick answers about what we do, and other common questions.

What Is an Offshore Corporation?

A corporation is an entity recognized by law as a separate "person" with limited liability. A corporation has the option to sell shares, the right to sue and be sued, and has perpetual existence.

How Are Offshore Corporations Used?

Offshore corporations may be used to own and operate businesses, issue shares, bonds or otherwise raise capital, guarantee obligations, hire employees, buy goods and services, sell goods and services, make contracts, rent office space, maintain checking and saving accounts, and maintain retirement plans for employees. Although most offshore corporations are private and closely held, some are publicly traded on major stock exchanges.

What Are Articles of Incorporation?

The Articles of Incorporation is the document which establishes the corporation and contains basic information such as the name, share structure, and purpose of the corporation.

What Are By-Laws?

The By-laws, or in some jurisdictions "Articles of Association", are rules the corporation creates for its shareholders, officers, and directors. By-laws are adopted by the Board of Directors as one of the first organizational steps in setting up a corporation. Upon instruction, we can adopt a standard set of By-laws for a new corporation. Unlike Articles of Association, By-laws are usually maintained internally but may be publicly filed if requested.

What Does a Corporate Search Reveal?

A corporate search will reveal the name of the corporation, the date of existence, amendments, and any other publicly filed document. For instance under Nevisian law (one of our favourite jurisdictions), there is no requirement that the names of corporate officers, directors or shareholders be filed in any public registry. Such information, therefore, remains confidential. The requirements under Panama law are a little different which is solved through the use of nominees as directors and shareholders.

What Are Bearer Shares?

Bearer share certificates do not indicate the name of the owner. The certificate is endorsed in blank such that the person having physical possession of the document is the owner. Bearer shares facilitate the transfer of assets because transfer of ownership is accomplished simply by the transfer of the certificate. As a rule, we do not advise the use of bearer shares because of its negative connotation in the eyes of judges and lawmakers.

What Are Registered Shares?

Registered share certificates indicate the name of the owner on the document. As a rule we use the Panamanian Foundation to be the owner of the share certificates in a majority of the incorporations that we do. The name of the shareholder is also recorded in the internal corporate records of the company. Although the registered owner is recorded in the corporation's internal records, no public registry of shareholders is maintained. The share registry is an internal corporate document available only to directors, officers and shareholders, under conditions specified in the jurisdiction's corporate statute.

What Are Shelf Companies?

Shelf Companies are ready-made, never used corporations that have been created to meet a client's immediate needs.

What Is a Registered Agent?

A Registered Agent is required to ensure that the corporation has an assigned representative at a known address to receive all service of process (legal notices) on its behalf. The Registered Agent forwards these documents to the address of record of the corporation.

Isn't Moving Assets Offshore Illegal?

There is nothing illegal about moving assets offshore. It is when you move the assets into accounts offshore and do not declare their existence to the tax authorities that you break the law. Any assets over which you have control, domestic or offshore, are probably liable to taxes in your home jurisdiction.

Why Should I Move Offshore?

Moving some of your assets offshore provides you access to modern (and ancient) methods of protecting your assets and reducing your taxes using international corporations and foundations

What Is Asset Protection?

Asset Protection is a term used to describe the concept of legally transferring your assets into a legal entity which will protect them from attack by frivolous litigation, seizure from government, attack from an estranged spouse - in fact anything which may threaten your hard earned wealth.

If I Must Declare My Offshore Assets, How Can I Use an Offshore Plan to Legitimately Reduce My Taxes?

Taxes must be paid on profits made on assets under your legal ownership. By the use of certain offshore entities, which vary according to your home jurisdiction, a certain proportion of your assets will no longer bear taxes at the same rate.

A Friend Said That Offshore Asset Protection Is Immoral, What Are Your Views on That?

Some people are quite happy to stay in a system which allows vultures to prey on exposed assets. That is their individual choice. There are other people who prefer to leave the country they love to get away from the system. Offshore asset protection is somewhere in between. There is nothing immoral in trying to protect your hard-earned assets so that you and/or your family can benefit from them later on. It is the essence of rational self-interest.

If I Open an Offshore Structure, Will This Lead to Tax Authority Scrutiny?

What we advocate is not illegal; it therefore does not attract undue attention from the authorities. It is activities like money laundering, tax evasion and controlled accounts that the tax authorities are interested in, not law-abiding citizens protecting their assets and lowering their tax burdens.

Which Is the Best Offshore Center To Use For Asset Protection and/or Estate Planning?

Most modern tax havens are very alike with respect to their tax laws and services, although some do offer entities not available in others. Certain tax havens have developed bad reputations over the years due to abuse by certain elements of the offshore industry, but most are quite safe. As with any financial plan, it is usually best to use a mix of jurisdictions, picking the best from three or four areas.

Can I Retain Control Over My Money, Possibly Through Investment or Bank Accounts in My Home Jurisdiction?

Many people would like the 'safety' of an offshore asset protection structure but would like to keep complete control over the assets, trading accounts etc. This is possible but gives a direct link to the assets and will probably lead to any legal structures that were set up being ignored for both tax and protection purposes. Offshore asset protection does require you find people you trust to advise you and take care of finances for you.

How Much Does an Asset Protection Structure Cost?

At Sovereign Management & Legal S.A. we believe in providing value for money for our clients. Furthermore, when providing our services, our focus is on building the quality and value of relationships with our clients over an extended period of time. Basic asset protection structures start as low as US$1500 for an average family, with annual costs as low as US$500. Of course this cost rises with the complexity involved and whether or not you are looking to take advantage of our professional management and account signatory services. This is why we provide what we call an “Offshore Identity Package” which is a way of initiating the move to go offshore without a large initial investment. Additional products and services can be added to it to enhance it’s usefulness and value.

What Is the Minimum Amount I Should Start With?

That depends on your reasons for going offshore. If it is for asset protection you should be considering how much you are risking by not going offshore, namely lawyers fees, time, loss of assets etc. If it is for tax reasons you should be looking at the annual costs against how much tax you can save. Our “Offshore Identity Package” is designed as an absolute minimum, but depending on your requirements you should take a good look at the more comprehensive packages and their resulting benefits.

Are There Any Other Advantages to Going Offshore?

Once a structure has been legally created it can be used for international trade and investment. This opens up a whole new arena that the average unstructured citizen cannot usually access.