With the Paradise papers leak in 2017 and the infamous Panama papers leak the year before, it has become increasingly more important to choose the right destination for offshore investment.
It will require careful consideration, planning and skilful professional advice. It will also no doubt require a jurisdiction with a politically and economically stable environment, sound legislation, low tax (or zero tax), a solid banking framework and a discreet environment. The good news is that Anguilla is such a jurisdiction and, depending on your situation, offshore investing can offer many advantages.
Anguilla offers a wide range of investment vehicles and strategies to capitalize on the advantages not offered in an investor’s home country. The favourable tax rates in Anguilla are designed to promote a healthy investment environment.
Anguilla is a popular location for restructuring ownership of assets. Through trusts, foundations or corporations, individual wealth can be transferred to other legal entities.
In addition, Anguilla has laws establishing strict corporate confidentiality with serious consequences for any breach of confidentiality. Importantly, although Anguilla is a discreet jurisdiction, its laws will allow the High Court to order disclosure to third parties in cases of illegal or other wrongful activity. For the high-profile investor keeping his or her identity confidential whilst purchasing shares in a company offers a significant legal and financial advantage.
The procedure for creating an Anguilla trust is extremely simple and certainly no different from doing so in many Common Law jurisdictions. All that is required is the execution of a trust instrument appointing the trustee(s) and setting out the terms of the trust, coupled with the payment or transfer of a fund (which may be no more than nominal at the outset) to the trustee(s). There are no other formalities.
The Anguilla Foundation
This is a vehicle that is well suited to entrepreneurs seeking to provide for the welfare of successive generations of their family, particularly but not exclusively in civil law jurisdictions, as well as the ideal vehicle for managing a “family office.” Its layer of corporate personality essentially acts as a corporate veil.
The Anguilla Foundation is a versatile vehicle for Estate Planning and Asset Protection. It is different from a trust in that although it has the same rights and duties as a Trustee, it is capable in its own right to transact business and enter into legally binding contracts. It has a separate legal personality, the ability to hold assets in its own name and the ability to contract with third parties and to sue and be sued in its own name. Foundations hold assets for the benefit of beneficiaries or purposes.
With careful drafting of the Foundation’s declaration of establishment or by-laws, the assets of the foundation are available for distribution to a beneficiary and not capable of being alienated or passed by bankruptcy, insolvency or liquidation, or liable to be seized, sold, attached, or otherwise taken in execution by process of law. In addition, an Anguilla Foundation is irrevocable and not subject to any perpetuity periods.
In brief, the Anguilla Foundation is one of the most straightforward and yet sophisticated foundation models available in the world today.
Anguilla Companies, of which there is a choice depending upon the needs of the investor, are flexible corporate entities which can provide for limited liability, low capital requirements, minimal or optional statutory filing requirements, minimal directors’ liability, no requirement for disclosure of beneficial ownership, a wide range of permitted company names, including in regional characters, no requirement for directors/shareholders to hold meetings at the offshore location (i.e. they can take place anywhere in the world), no requirements or optional requirements for accounting records to be audited, reduced tax and increased confidentiality.
Anguilla is an ideal offshore jurisdiction with its modern, flexible and proven legislation which readily supports the requirements of offshore companies. The local legislation guarantees confidentiality and privacy, with few but well defined exceptions, with regards to all of the client’s business dealings and financial affairs.
What Differentiates Anguilla from other Offshore Jurisdictions
Anguilla remains at the cutting edge of innovation to make doing business easy. Its world first with an on-line company registration and record filing system – ACORN – is rightly celebrated, creating the facility to incorporate companies within an hour. We have had the addition of IBCs and Foundations, and now, the Caribbean Based Trading Company (“CBTC”) as an offshore regular company.
The CBTC is available to any organisation that does business within, from, or to the Caribbean. Setting up a CBTC is straightforward. Directors, shareholders and executives do not need to be present in Anguilla. Anguilla, unlike many other Caribbean jurisdictions, does not have any foreign exchange controls. US Dollar business accounts can be operated and there are no transaction levies.
Anguilla is also a major global centre for incorporation of captive insurance companies. The Insurance Act covers the licensing and regulation of companies undertaking domestic insurance, offshore and captive insurance and of insurance intermediaries. The Act sets out the licensing regime, which requires the submission of an application and a business plan and details all annual requirements by licensed insurers.
Litigation and the Courts
Litigation is less expensive in Anguilla than in other jurisdictions for a number of historic and procedural reasons. The Anguilla courts, including its Court of Appeal, have been at the forefront of developing jurisprudence that serves as a guide across the English common law world. They have defined the circumstances where third parties can and cannot access confidential information in cases where wrongdoing is suspected, striking a balance between the interests of all stakeholders. WEBSTER has successfully represented parties in a number of such cases.
Anguilla has effectively set out to attract legitimate global investment business by deliberately enacting a three year prescription period for the unwinding of transactions, including fraudulent transactions, as opposed to shorter prescription periods in other jurisdictions, which are less discerning with their investor profile.
At WEBSTER we have a zero-tolerance policy for breaches of confidentiality. Integrity is one of our core values. Our IT systems are designed around security of information. We do not store data in the ‘Cloud’. We also like to get to know our clients fully, which reduces the risk of inappropriate activities.
Anguilla is not only a discreet, confidential and safe jurisdiction with progressive legislation for offshore investment, it is also a British Overseas Territory. Its official language is English making it easier for clients to do business here. At WEBSTER, we have professional employees who are also conversant in Italian, French, German and Dutch.
In the event that you would like more information about the above or general legal advice please contact our firm’s Managing Associate, Sarah Barrington at email@example.com who will be delighted to assist.