By Andrew Rogerson LLB (Hons) TEP
There are many offshore jurisdictions in which a trust or company may be established. Some are extremely successful. For example Cayman is the worlds 5thlargest banking centre with $1.4 trillion in assets including 8,000 hedge funds. The British Virgin Islands (“BVI”) are home to 700,000 offshore companies. Bermuda is the richest country in the world with a GDP of US$70,000 compared to US$43,500 for USA. Most of them are current or former British Colonies and / or associated states located in the Caribbean, North Atlantic and the Channel Islands. They are characterised by the following:
- zero or minimal income tax
- legislated bank secrecy
- similar legal system to Canada (based on English common law with a generally independent and non corrupt judiciary)
- strict regime of supervision by financial services authorities, generally headed by experienced non-local people (which require trust companies and banks to maintain heavy insurance cover).
Most of the offshore jurisdictions provide similarly attractive regimes, so the decision as to which one to use will, to a degree, depend on personal preference. Skilled and efficient trustee and corporate services are available in most of them. One important factor in selecting a jurisdiction is the ease with which one can travel there. In the modern telecommunications era, it is not essential to ever step foot in the jurisdiction. However, there is much to be gained by making at least an initial visit to familiarise oneself with the jurisdiction in general and the trustees in particular. Ease of communication is also relevant in regard to how quickly your lawyers can get there if need be, with consequent savings in fees. By air, The Turks and Caicos Islands is just over an hour away from Miami and Jersey is only 45 minutes from London, England. Both have excellent hotels if an overnight stay is required.