This is the much discussed and often misunderstood corporate structure that has been the subject of much interest among the wealthy for generations.

The International Business Corporation first found favour among the wealthy of Europe and as a result financial centers developed over the centuries in countries such as Liechtenstein and Switzerland.This is a very old concept!

It is a well known fact that many fine chateaus in Europe are not owned by the families that have lived in them for generations. They are owned by International Business Corporations that could be residents of the Isle of Man or some sunny island in the Caribbean.

Because of this careful structuring these chateaus are not available to those who would try to seize them due to the misfortunes of the occupants.

The occupants, therefore, sleep very well at night!

From the earliest times it was found to be advantageous to create a corporation domiciled outside of the jurisdiction you lived in so that assets held by that corporation for its creator remained a private matter and out of the reach of those with prying eyes and evil intent.

The reasons for this strategy are many but chief among them is asset protection, a fact well known to the prudent among the wealthy.

Wealth brings with it a unique set of problems and one of these is that owners of wealth become the targets of the unscrupulous.

One of the chief preoccupations of a very wealthy individual becomes the battle to hang on to this wealth.

In more recent times the focus of domiciling foreign corporations has moved away from Europe, at least for North Americans, to countries closer to home like several domiciles in the Caribbean, Belize and Panama.

Another change has been that creating an offshore company is no longer strictly for the wealthy and many thousands of middle income people have taken advantage of the sheltering and protective effects that these structures provide.

Leading the exodus of assets offshore are medical practitioners and business people.

Doctors for example live in fear of malpractice suits as they are often unable to afford the insurance premiums for absolute total coverage, so if the claim exceeds their coverage, there goes the family assets, house, BMW and all!

Business people are often in the same boat as a suit can come out of no where and destroy everything a person has worked so hard for.

There is evidence that unethical individuals will target someone of means with a lawsuit knowing that the target will often settle out of court to protect his assets as the public grows more and more wary of what appear to be capricious judgements from the courts.

To wit:

Settlements in favour of someone who spills coffee.

Settlements for someone who had one to many at dinner at your home and refused your offer to call a taxi and then piles his car into a telephone pole.You are promptly named in his suit.

In this society you are often legally the guilty party even when every shred of common sense cries out that you are not at fault!

Divorces are plentiful and the more acrimonious they are the more they can cause huge financial damage.

So, understanding all this, the cautious among us are quietly setting up offshore corporations to protect themselves.

Setting up an offshore structure correctly and in the correct place can provide one with a whole lot of tools and advantages not available to any comparable structure onshore.

Getting competent advice on how to set things up right is not easy for many because most onshore professionals such as accountants and lawyers know little or nothing about the offshore world and will be the first to admit it.

To make things worse, the new Patriot Act in the US is being used as an excuse for ever closer scrutiny by governments of its citizens private affairs and in Canada,an attempt was recently made by the government to cause lawyers to do the unthinkable and act as agents for the government in reporting suspicious financial transactions defined by a list that some say was totally absurd.

That alone caused many pairs of eyes to focus offshore!

There is absolutely nothing illegal about setting up a corporation outside of your home jurisdiction.

What is illegal is setting up an offshore company and then use it for fraudulent purposes. Even an offshore jurisdiction will not protect you for doing that.

Setting up a properly designed offshore asset protection structure is simply intelligent financial self defence.

In many cases it is financial suicide not to!

In ending you will note that I have made no reference to saving taxes through the use of offshore structuring.

Are there tax advantages?

Depending on the circumstances and the quality of the advice you follow.

Most definitely!