Breaking an asset transfer into two or more parts is the logical strategy of those who wish to void the trail between their onshore and offshore holdings. But remember: keeping a low profile matters.
The confidential and hassle-free transfer of onshore assets to offshore banking havens is a specialised area where individual circumstances must always be taken into account.
What issues to look at
Some of the issues to look at are the banks and jurisdictions involved (and their relationship to your domicile), the size of the transaction(s), the level of confidentiality required, time-frame and others.
An important consideration for many is the possibility of future third-party claims over their assets (arising, for example, from malpractice lawsuits, allegations of professional misconduct, negligence, misrepresentation or improper counsel or perhaps divorce proceedings).
It is virtually impossible to generalise on this subject, let alone suggest a fit-all strategy. However, we can identify some of the trends that have evolved over the past decade or so, and outline a few strategies now routinely used by all those not wishing to leave the metaphorical trail ending at their doorstep.
Transferring assets in silence: Today's trends and solutions
Moving assets from their onshore home to a protected offshore haven is not as simple as getting from A to B as once was the case. Interposing a neutral intermediary jurisdiction as a shield is central to present-day strategies in confidential asset transfers. Today we have to talk in terms of getting from A to C via B, where B -- a suitable facility in an intermediary, low profile jurisdiction -- provides that important financial stepping stone on your way to offshore freedom.
As all astute offshore practitioners know, keeping a low profile has become more important nowadays than it ever was before. Consequently, the most successful of confidential asset transfer strategies are being modeled around concepts established in international commerce long before the new anti-privacy initiatives first appeared.
This a concept as ancient as commerce itself. In what is a truly global economy, companies increasingly employ third-party entities to extend their global reach and access distant markets, increase profits, simplify administration and relieve themselves of some of the credit risks associated with international trade.
Transfer pricing, for example, involves interposing either a self-owned or third-party intermediary company into a commercial transaction with the intention to accumulate the greatest share of profit in a low-tax environment. Factoring is another example where an intermediary company takes part in the completion of a commercial transaction between two parties -- this time for the purpose of improving cash-flow, easing overheads and administration and protection against bad debt losses.
While such trading schemes were once the preserve of the largest multinational conglomerates, they are now accessible to all. Even self-owned insurers -- captives -- that are used to lower insurance spend, are available for a modest fee through “rent-a-captive” arrangements.
What do areas as wide and apparently as unrelated as factoring, transfer pricing or insurance business have to do with financial privacy or the transfer of assets offshore? Seemingly nothing -- that is until you realise that all these practices in some way involve breaking a single financial transaction in two parts. And when you understand that this by-product is an incidental gain and not their primary commercial purpose, it becomes apparent why a suitable intermediary corporation can provide that low profile stepping stone on your way offshore.