Global Strategies, Asset Protection, estate planning, offshore investments

H. LEWIS LOWER
PRESIDENT
E-Mail Us
lewlower@aol.com
315-343-7178
Fax: 315-342-0431

Company Background
It's Legal
Offshore Investments
Q and A
Why B.V.I.

In the offshore industry, the British Virgin Islands (BVI) have recently made their name in the market as one of the premier venues for offshore incorporation. Although many articles have given details about how and what is available, few have yet to explore the practical uses which make the BVI one of the most sought-after jurisdictions for this growing industry.

Although there are many legitimate uses for the BVI we will explore a few of those commonly used today in international business operations. Primarily, these fall into two categories: those that substantially reduce taxation or make exemption possible altogether and those that provide the owner with a high level of confidentiality and state-of-the-art asset protection.

A. PROPERTY OWNERSHIP An international business corporation (IBC) can be used in many jurisdictions by non-domiciled residents or foreign nationals who own property. When the individual wishes to dispose of the property, he/she can sell the company rather than the property. In so doing, he/she may successfully avoid capital taxes and, in some cases, inheritance tax implications. Use of bearer shares under this scenario can simplify the transfer process considerably.

B. INVESTMENTS HOLDING COMPANY IBCs are often used as investment holding vehicles. This offers the owner a high level of confidentiality while, in certain cases, reducing or removing certain withholding taxes on dividends and other distributions. Such a vehicle is often used in conjunction with a simple purpose trust as a convenient way for the trustees to own the trust assets.

C. EMPLOYMENT COMPANY As a foreign national working abroad, an individual may control his/her own tax situation by forming an IBC to which his/her income is paid, rather than receiving it direct. As a nontaxable entity, the income can then be controlled, reducing the amounts taken into his/her own tax domicile. Taxes would only be paid on any income repatriated.

D. SHIP/YACHT OWNERSHIP COMPANY To provide British registry for a yacht or a ship, a BVI company can be used, giving the owner both solid international registration and a nontaxable vehicle from which to operate the yacht. The only limitations to BVI registry are a 500 ton limit for yachts and pleasure vessels and a 150 ton limit for commercial vessels. For the vessel to operate in BVI waters, appropriate government licenses are required.

E. TRADING COMPANY As a form of re-invoicing, a seller can sell his/her product to a BVI company, which in turn sells to his/her buyer, thus reducing the amount of direct profit on the product and reducing the tax liability. While in many sophisticated tax jurisdictions the "look through" principle would be employed and taxes levied on the full profit, it may be possible in less sophisticated areas to employ this principle. Consideration may be given to actually establishing a "substance" operation in the BVI which could legitimately add some value to the product sold.

F. BEDDING COMPANY In situations where confidentiality is important, a BVI company can preserve the anonymity of the bidder.

G. JOINT VENTURES BVI companies can be used where the necessity for a partner precludes the use of existing branches or franchises in certain countries. This can allow for both anonymity and tax reduction by using a BVI company.

H. MUTUAL FUND COMPANIES Although no regulatory facility for mutual funds has been established in the BVI, IBCs are being used successfully. They allow the fund managers to devote more time to raising and managing funds without overpowering regulations, thus reducing the cost of management and increasing the return to the investor. An investor may also be able to invest in an offshore fund that aggregates and compounds its earnings free of taxation.

L. LEASING COMPANIES If a physical plant and equipment are moved offshore, creating an ownership structure through a leasing company may be beneficial. The offshore transfer would need to be at "arms length" and at fair market value, but various benefits could be derived from using an IBC. Transferability of the asset could be facilitated through bearer shares; there would be no tax on leasehold profits in the BVI; and, from the lessor standpoint, he/she may be able to offset all or part of the leasehold payments against profit.

J. ROYALTY COMPANIES This type of company is one of the most popular uses of the IBC: an "end depository" for funds which have already undergone several legitimate stages of tax planning. Once the tax effects have been mitigated to the maximum extent permissible, the "after tax" funds are deposited into an IBC so that no further tax consequences arise, In the royalty situation, a Netherlands company may be used to reduce or eliminate withholding taxes on royalty income before transferring the income to an IBC.

K. MANAGEMENT OR CONSULTING COMPANY A BVI company can contract and provide certain management and/or consulting services. As the contractor, the BVI company issues invoices and receives payments, but the income is not taxable in the BVI.

L. ESTATE PLANNING BVI companies are often used as estate planning tools. Liquid assets can easily be transferred to offshore trusts and owned through individual offshore companies. This approach offers both confidentiality and flexibility. The only truly effective estate plan requires removal of the entire estate from any U.S. Probate Court jurisdiction.

M. BANK ACCOUNT OPERATION When an individual wants maximum confidentiality in the operation of an offshore bank account, an IBC may be used.

N. ASSET PROTECTION In situations where political stability is in question, an individual may set up asset ownership through offshore companies to ensure continuity. With more than 200,000 IBC's currently on the register, the success of the jurisdiction is self-evident. These are only a few of the legitimate ways in which such a vehicle may be used. The globalization of international business insures that this type of vehicle will play an important role in the future.

0. INTELLECTUAL PROPERTY COMPANY Authors, writers for media, television and films, manufacturers of proprietary products and manufacturers of licensed, patented and copywritten products can all benefit from using IBCs.

P. PRIVATE FAMILY SINGLE PREMIUM ANNUITY COMPANY The BVI has recent legislation which permits the very substantial advantages to flow to such structures. These companies are not taxed and do not require licensure in the BVI. They are one of the few remaining tax deferrals.

Property/business-ownership/sales/purchase
Own your own IBC mutual fund company offshore
Yacht purchase/ownership/lease/sale/with British admiralty ensign
IBC for exploitation of patents/trademarks for all U.S. Businesses
Authors'/producers/writers' exploitation of copyrights
Biding company for confidentiality/anonymity
Captive insurance/re-insurance/rent-a-captive companies for better risk management Trading/re-invoicing/factoring/for import/export
IBC/Netherlands Corp., substantial reduction of all taxes/withdrawals of income
Film/TV/trade shows/sporting event producers may reduce tax obligations
Intellectual property and licensee product manufacturers
Self-managed annuity companies. Fully qualified offshore retirement plans
Designer executive compensation programs using IBCs
Legal avoidance of Medicaid trust act
The only estate plan for Americans today. Simple/inexpensive/no probate, divorce, bankruptcy,
attachment, garnishes, or seizure

1. Incorporation costs in the BVI are significantly lower than the other havens.
2. Annual charges are significantly lower in the BVI than the other havens.
3 .There are no requirements for local presence in the BVI.
4. The legal system is English common law.
5.The currency is the U.S. dollar.
6. There are no exchange rates.
7. There is banking confidentiality.
8. There are no statutory requirements for audits.
9. There is no minimum requirement for share capital.
1O. Migration is possible.

In the early 1900s, as many as sixty jurisdictions provided strategies and structures for asset protection. Many of these structures were predicated upon an irrevocable Asset Protection Trust (APT) formed by U.S. lawyers in certain jurisdictions. The APT was often opened and combined with domestic trusts, A good year in the business would constitute approximately 2,000 trusts formed in the most active jurisdiction.

The historical of perception that a trust could protect from a variety of threats.

The fact that you are giving up total control of your assets. While the asset may be removed from a creditor's reach, it is also removed from your reach.

Irrevocable trusts are not without disadvantages, including start-up costs and maintenance expenses that would not be associated with outright gifts or the forming of IBC's.

Annual income tax returns must be filed, as well as other periodic financial reports to beneficiaries and/or courts.

You lose active use of your assets and must trust a banker, lawyer or other appointee to take over all authority over your funds.

In forming the trust, the lawyer (being an officer of the court) must file numerous reports to the Treasury Department, Justice Department, IRS and others--thereby serving notice that you are attempting to transfer funds, achieve privacy and possibly ameliorate tax obligations. In other words, the attorney must "blow the whistle" on his own client.

This is an expensive strategy, both in formation (middle five figures!) and annual maintenance. Several trustees must each be paid $2,000 to $3,000 annually if they do nothing, and much more if they are required for any significant function.

The entire structure (now totally revealed) is subject to the scrutiny and caprice--and possible recision--of the unpredictable U.S. court systrecision--of the unpredictable U.S. court system. An established trust cannot change jurisdiction to avoid these threats.

Some knowledgeable legal authorities suggested that doing nothing for the client might well be preferable to revealing his asset protection to the world at large!

Over the past few years, it has become increasingly evident that the Interntaional Business Corporation (IBC) may be that alternative.

The IBC had its origins in the Netherlands Antilles in the 1970s. it was created by mega-national corporations for international trading companies and intellectual property companies, as well as consulting and service companies. These are used to considerable advantage in world markets today.

Today's IBC's retains the three original features. However, since 1991 dozens of new statutes and structures have been added to form the best asset and privacy protection alternatives ever available.

The IBC format effectively protects the client. The client may truthfully answer any question and not reveal the situs, jurisdiction or composition of his assets.

For complete detailing of the many advantages of the IBC today, we urge you to read:

Asset Protection Methods and Means and The International Business Corporation in the BVI

"In today's threatening environment, any professional in the legal or financial disciplines who cannot give competent asset protection counsel exposes his client to great jeopardy!"

"Over 200,000 IBC structures have now been formed in the leading jurisdiction (BVI), a truly amazing record."

Many international companies have discovered the advantages of doing business from a tax haven. Increasingly, global companies see benefits in offshore reincorporation or relocation for whole divisions - such as a company's European treasury and cash management operations. Some are setting up ad hoc companies for specific business endeavors, such as a construction project or joint venture.

The United States imposes a 35% current tax on U.S. -based corporations, regardless of the origin of their earnings. The Number One reason companies create offshore parents is to minimize that U.S. tax bite. Off-shore corporations in the BVI have no capital gains or income taxes on outside income. As a BVI corporation, a company is taxed only in countries where they do business, And by the very nature of the legal corporation in the BVI--or, as it is called, an International Corporation--all that company's business is done outside the United States. Countries including the Bahamas, Barbados and Cayman Islands are among the most popular registration sites today. But the British Virgin Islands (BVI) has attributes that the others cannot offer.

We use a corporate structure known as an "international business company" (IBC), which grants outside concerns special tax and regulatory privileges, such as freedom from taxation. To be eligible, the IBC must abstain from commerce within the resident country (except for such mundane work as banking and legal or accounting activities).

The fees and tax rates vary from haven to haven. Our firm offers the best legal and financial services at very reasonable fees. We have chosen to work in the BVI because of the reasonable fees and the absolute legality of the formations.

The continuing growth of tax havens comes even as the United States has passed a full array of laws and treaties to cut down on tax evasion and other illegal schemes such as money laundering. A provision enacted in 1993 now requires "controlled foreign corporations"--companies with a U.S. parent operating outside the United States--to pay U.S. taxes on "passive assets" that generate interest and income.

P.O. Box 104, Road Town
Tortola, British Virgin Islands

326 West 5th Street
Oswego, NY 13126
315-343-7178
Fax: 315-342-0431

OFFSHORE INVESTMENTS
OFFSHORE BROKER - DEALER
For I.B.C.s - Not To Be Sold In U.S.
An opportunity to Invest In the U.S. And International Investment Markets

Experienced investors understand the importance of global markets. The interrelationship of U.S. to Europe, of South America to the Pacific Rim, and the connections among all the worlds markets make for a dynamic and vibrant investment arena. Consider the advantage of having an internationally diversified portfolio.

The efficient frontier is a concept used to describe a relationship between correlated asset classes in which performance and risk are optimized. --As an example --, assets are invested in a portfolio of international and domestic securities: 20% (international) and 80% (US) where the level of portfolio risk is equivalent to a portfolio fully invested in U.S. securities. However, the performance associated with such a portfolio is 16% higher. Cross-border diversification can be to your advantage.

The more than 60 mutual funds available through Swiss investments, include an extremely broad selection of Equity, Fixed Income, and Money-Market investments in a wide range of major world markets and currencies. With Swiss investments, the opportunities for diversification are virtually unlimited.

Although diversification in both U.S. and international markets may reduce the risk while 'increasing return of your overall portfolio, this does not eliminate the risk of currency fluctuations, inflationary changes, tak laws, political instability or other economic and political factors that may affect your investment.

As president and owner of Global Strategies, H. Lewis Lower has successfully delivered sound financial advice and superior service to his customers since 1987. He holds the designation of Life Underwriter Training Council Fellow (LUTCF) and belongs to the International Association of Financial Planners (IAFP). Lew's years of experience have been in the complicated and technical arena of financial, investment and insurance planning. This experience enables him to evaluate each clients needs and objectives, then formulate a strategy to achieve those goals.

Lew's life experiences have included careers in engineering, public relations, fund raising and retail sales. He is a member of the Syracuse Life Underwriter Group and the I.S.C.E.B.S. He is currently studying for a Certified Employee Benefit Specialist designation from the Wharton School, University of Pennsylvania. Ms education includes completed courses for a bachelor of science degree at Syracuse University, and he holds an associate of applied science degree in instrumentation engineering from S.U.N.Y. at Morrisville, New York. He also attended law school in California.

Pledging soundness and honesty in his dealings with all clients, Lew tells them, "Your finances are like the pieces of a puzzle that have to be put together in a picture that is advantageous to you. Solutions will be formulated in a plan designed for you individually and your family or business." For many of his clients (who are high net-worth investors, professionals and business owners) Lew focuses on estate and financial planning and business insurance.

Due to his financial industry experience and knowledge, Lew is often invited to speak to professional and industrial groups. He resides in Syracuse, New York, where his leisure time is spent flying, boating, golfing, attending the theatre and playing tennis.

GLOBAL STRATEGIES
326 West 5th Street
Oswego, NY 13126
315-343-7178
Fax: 315-342-0431