Over the past ten years, entrepreneurs have increasingly decided to establish an international trust. Why is the question of opening a trust fund so popular today? In this article we will talk about trusts, consider their advantages, how they work and who is included in them.
What is a trust fund?
A trust is a special form of property contractual relationship, when the owner of an asset transfers ownership to the trustee. In the process of creating a trust, three parties take part:
- A founder. After the registration of the trust, a founder completely loses control over it.
- A trustee is not entitled to receive direct benefits from the assets of the trust.
- A beneficiary, who has the right to benefit from the assets.
If you decide to register a trust fund, please note, a trustee is responsible for the management, investment, distribution of assets in accordance with the terms of the trust agreement.
Basic requirements for a trust manager:
- Knowledge of the internal structure of the trust;
- Doing business in accordance with the trust agreement;
- Advice on technical issues;
- A reasonable investing.
Reasons for registering an international trust fund:
- A protection of beneficiaries, namely their wealth. A trust fund is created in the interests of the family, the funds of which will not be affected, even if the founder dies. Property, money and assets will be kept on demand.
- A taxation. There are many taxes, related issues, that can be successfully resolved through the establishment of an international trust. The accountants and lawyers of the founder take an active part in the formation of the existing tax protection.
- An asset protection. In jurisdictions, where exchange control measures may be introduced, certain measures may be taken against persons, who hold significant material wealth. The establishment of an international trust fund can provide a substantial protection against such risks.
Choosing a jurisdiction
In this article, we would like to focus on registering a trust fund in the United States. Advantages of American trusts:
- US laws are more advanced and commercially oriented;
- Some states have asset protection provisions;
- Some states provide for the establishment of US trusts, which are currently only available in offshore jurisdictions;
- Hybrid trusts in the USA may not meet reporting requirements;
- The United States is not considered an offshore tax haven;
- There are no reporting requirements.
When opening an American trust fund, remember, that such a trust can own foreign assets, that belong to several foreign legal entities. If the legal entity has an account with a foreign bank, then it will require a CRS report.
Choosing a US state
Delaware and South Dakota are now considered highly prestigious jurisdictions among international clients. Also, interesting is the option of establishing a trust in Florida or Alaska.
US law places particular emphasis on the confidentiality of trusts. For example, in the Delaware Shuttle, trust agreements are not registered to ensure a complete confidentiality of the participants in the trust.
This article has been prepared for informative purposes. A reader can sort all questions out together with YB Case experts, ordering individual advice on the establishment of an international trust fund.
Our specialists are ready to help you by providing qualified support in registering a trust fund, as well as support, when working with trusts.
To find out more detailed information about our services, and to order professional advice on the establishment of a trust, leave your application through the feedback form, or contact us right now.