Question Simplest offshore bank set-up?

[JohnLocke]

I find it hard to believe that 18% of people on this board with 100M+ in their bank account are spending hours to read offshorecorptalk (in some cases completely wrong and misleading information) instead of paying a serious consulting firm. Just my two cents ...

How do you make up that 18% do that?

 

[GPT]

Can you still control how the money is invested- e.g. buy\sell stocks? Or you must only give instructions to the trustee on how to manage it (to claim that you are not in "control" of the funds)?

I overlooked this part...

Depending on what is written in the trust instrument and what type of trust you have you either give instructions to the trustee who executes them or the trustee appoints you as an advisor for investments or it is at the discretion of the trustee or a combination of the above or something completely different.

Its a tailor-made solution depending on what you want. The more control you want the less protection you have.

 

[Golden Fleece]

This is just not true. Court of one country can request anything from the court of other country where he might try to "hide", especially in Europe.

How do you think divorces work for people of different nationalities/citizenships?

What you said is simply not true. It is definitely not true in the U.S. and, based on what I have read, not true in Europe. There are substantial hurdles to gaining access to bank records in a foreign country, including needing to hire local legal counsel in the other country.

So back to the heart of the call from Spouse A’s lawyer. How do you serve a subpoena on an offshore bank?

Short answer: you don’t. At least, not if you actually want it to work. Yes, theoretically, you can serve a subpoena under the Hague Service Convention– in some places.

In other places, various authorities may view your service attempt as a usurpation of judicial authority and reject your request. More to the point, even if the thing could be served, it has no teeth, so good luck enforcing it.

Serve a U.S. subpoena on a Cayman bank, and the bank will rightly ignore your demand. Likewise a Swiss bank or a Jersey bank or Singaporean bank. They’re all going to giggle at you just a bit while sticking your subpoena quietly in a drawer. Why? Well, a subpoena loses its coercive effect when it leaves its own jurisdiction– and it only gets it back if (1) a statute automatically confers it– see the Uniform Interstate Depositions and Discovery Act (UIDDA)– or (2) if a court in the foreign* state blesses it with that court’s authority– as in a garden variety domestication action.

But there is no treaty comparable to UIDDA. And an offshore foreign** court is just not going to rubber-stamp a New York subpoena like a Missouri court would (Full Faith & Credit is not a thing overseas).

The article goes on to explain that there is a way to accomplish a bank records request, but you must hire local legal counsel. This makes the process time-consuming and expensive, not to mention the forensic accounting necessary to discover the funds in the first place.
https://www.haguelawblog.com/2019/03/divorce-money-hidden-offshore-and-the-hague/

 

[uplana]

How do you make up that 18% do that?

some people are just plain stupid and talk about things they don't have a clue about. This make space for all others of us that use this platform to network with the more clever people around.

BTW: There is a ignore button, the one that let all messages etc disappear from users that just spread noise.

 

[Silvio]

Famous and exception to the rule. At the same time you can -in the case of a trust- have a provision for a "protector" as mentioned in the article. In cases where a protector is appointed the trustee (depending on what is written in the trust deed) needs approval from the protector.

Given that the protector is an advisory or oversight type of role they are in many cases a relative or a trusted friend. Its an extra layer of accountability for the trustee. What happened in this case is beyond every moral and ethical thought. At the same time it started with the settlor (father) who was sweet talked into the setup and neglected to get a second (and third) opinion before setting up the trust. This led to legalised theft.

Also, Liechtenstein has its place in a structure. I'm again sure that 99.9% of the visitors here wouldn't qualify for a Liechtenstein trust or foundation. The rule of thumb for Liechtenstein until 4-5 years ago was 100 million and up to make it worth while. Im quite sure that the minimum amount is higher now to make it worth while. If you think Switzerland is expensive.. Go to Liechtenstein. Switzerland all of a sudden feels like a third world country.

I don't think that is correct, as far as I know starting from 7 figures it would make sense to open a Stiftung in Liechtenstein and the costs would be worth it even with modest returns.

Some costs for Liechtenstein trusts:
http://www.host-trust.com/english/trust_reg.html
You only need 30,000 CHF, nothing even close to a 100 million. Tons of other sites show the same costs, even if you factor in all the Truehand costs etc it shouldn't cost more than 10-20K per year. With 1-2 million even LGT in Liechtenstein will have you as a client.

 

[Sols]

What about cases in which the trustee oversteps the boundaries and treats the money as his own? For example in Liechtenstein there's a famous case
https://www.independent.co.uk/news/...neficiaries-trustees-legal-laws-a8239956.html

You can take precautions (rock solid agreements, protector/council) but if the worst does happen, it's time to involve courts. It won't be easy and it won't be cheap, but that is your recourse. Hopefully only courts in jurisdictions with sensible, effective legal systems are required.

The best remedy is prevention, though, insofar as it's possible.

Can you still control how the money is invested- e.g. buy\sell stocks? Or you must only give instructions to the trustee on how to manage it (to claim that you are not in "control" of the funds)?

You usually surrender control, but I frequently see setups where the nominees let the UBO have direct access to accounts. It has to be done carefully, since giving the UBO control can compromise the entire structure.

Another way is to have the nominees appoint a CFO that you know and trust to (also) have access to the account.

 

[GPT]

I don't think that is correct, as far as I know starting from 7 figures it would make sense to open a Stiftung in Liechtenstein and the costs would be worth it even with modest returns.

Some costs for Liechtenstein trusts:
http://www.host-trust.com/english/trust_reg.html
You only need 30,000 CHF, nothing even close to a 100 million. Tons of other sites show the same costs, even if you factor in all the Truehand costs etc it shouldn't cost more than 10-20K per year. With 1-2 million even LGT in Liechtenstein will have you as a client.

I wasn't referring to the setup cost. I was referring to the amount put into the structure.

 

[jjrapy]

Amazing answer, super helpful.

What about cases in which the trustee oversteps the boundaries and treats the money as his own? For example in Liechtenstein there's a famous case
https://www.independent.co.uk/news/...neficiaries-trustees-legal-laws-a8239956.html
Can you still control how the money is invested- e.g. buy\sell stocks? Or you must only give instructions to the trustee on how to manage it (to claim that you are not in "control" of the funds)?

https://www.stewartslaw.com/news/the-cost-of-obstinacy-perry-v-neupert-costs-summary/

 

[GPT]

https://www.stewartslaw.com/news/the-cost-of-obstinacy-perry-v-neupert-costs-summary/

This is where you need to do research beforehand. At the same time I am convinced that there is more than meets the eye.

Personally, I wouldn't recommend Lichtenstein as a jurisdiction for trusts and foundations anymore since about 10-15 years. Too many small things happened besides this Perry v Neupert case.

 

[Gamblord]

I would just buy XMR with the fiat and store it on a hardware wallet. Not legal/financial advice.

 

[Vor]

does CIM Bank Switzerland take US citizens as clients or will it be not possible for an American?