“On Why One Should Separate Duties”

The FidPro Blog

separation

Why it’s important to Separate Corporate from Legal Services

If you’re contemplating the incorporation of a local company or International Business Company (IBC), then you may wish to consider the concept of separating your corporate and legal services. The basis for this is continuity of business. More often than not, corporate services form a portion of the legal services rendered by the client’s attorney. Unfortunately, there are times when expectations are not met and the client and his attorney are forced to end their relationship.  If the termination is not amicable, it could lead to disruption of the registered office and agent services previously provided by the client’s attorney. I.e. Regulatory requirements such as annual fees and filings will not be maintained due to the inability to collect disbursements from the client.

By using a Financial Corporate Service Provider to act as registered agent and office exclusively, no matter how dysfunctional the…

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“On Why One Should Separate Duties”

separation

Why it’s important to Separate Corporate from Legal Services

If you’re contemplating the incorporation of a local company or International Business Company (IBC), then you may wish to consider the concept of separating your corporate and legal services. The basis for this is continuity of business. More often than not, corporate services form a portion of the legal services rendered by the client’s attorney. Unfortunately, there are times when expectations are not met and the client and attorney are forced to end the relationship.  If the termination is not amicable, it could lead to disruption of the registered office and agent services previously provided by the client’s attorney. I.e. Regulatory requirements such as annual fees and filings will not be maintained due to the inability to collect disbursements from the client.

By using a Financial Corporate Service Provider to act as registered agent and office exclusively, no matter how dysfunctional the relationship between the client and his legal support might become, the company is able to continue without disruption. This element of continuity is important. It saves the client money, it’s more efficient and augments the robust attribute of limiting the liability of the company’s beneficial owner.

If you’re about to start a new business and you want to hire an attorney to represent you and your company’s interest, consider meeting with your Corporate Service Provider first. Chances are, they’ll save you money in the long run.

Chile and Voluntary Disclosure

chile

“In September 2014, Chile entered into force its Voluntary Disclosure Mechanism”

Provided that the taxpayer is deemed resident in Chile prior to the 1st of January 2014, he or she can declare during this current 2015 fiscal year, unreported assets and income that they directly or indirectly own abroad. However, there is a caveat. The assets to be voluntarily declared will have to be domiciled or managed from jurisdictions that have anti-money laundering rules, adhere to the Financial Action Task Forces’ recommendations and whose Financial Intelligence Units subscribe to the Egmont Group.

If the taxpayer is eligible for voluntary disclosure, they will also have to fulfill the exchange control regulations if not already done so. Taxpayers will also have to substantiate with “prima facie” evidence that they acquired the assets on or before the 1st of January 2014.

After the declaration is filed, Chilean revenue will advise on the portion of the 8% single and substantive tax that will have to be paid. Once notice is received, the taxpayer will have 10 days thereafter to settle the outstanding tax amount. Once paid, Chilean revenue will have 12 months from the tax settlement date to request an audit. Such audit could result in a different amount for the tax payment.

Chilean tax attorneys have given mixed opinions on how to respond to this very important initiative. Some advisers have NOT recommended the amnesty route on the basis that clients would expose themselves to extreme scrutiny from Chilean revenue and other associated agencies.

Others have recommended compliance with the amnesty rather than the proverbial “sticking ones head in the sand”.  Most tax advisers who recommend this route have also advised that it might be best to change the jurisdiction of the offshore structure to a high tax jurisdiction and once done, declare the structure.  It is perceived that a transfer to a higher tax jurisdiction will place the structure in better standing when the declaration is made to Chilean revenue.

From a wealth planning perspective, a good place to start the conversation with your client is to consider a pure insurance policy (no wrapper) or perhaps a restatement of the existing grantor trust to an irrevocable structure with Letters of Wishes. Both solutions appear acceptable according to Chilean tax advisers.  More on this soon…

The De-Offshorisation of Russia

Russia

Russia’s Anti-Offshore Measures

If you’re an international wealth planner working with Russian resident clients, you need to review the structures used by your clients for personal and corporate use. If you are a fiduciary of a foreign trust or foundation with Russian resident settlors, beneficiaries or controlling persons or a director of a foreign company holding Russian assets controlled by Russian persons, you need to review your wealth planning and corporate structure to ensure that you are able to remain compliant with the Law.

The main purpose of the Law is to set the framework and instruments for the Russian government to clamp down at tax avoidance by Russian taxpayers using international structures. The changes will impact all international corporate groups and wealth planning structures that are controlled or established by Russian resident individuals or companies.

Is Global Multinational Tax Reporting on the horizon?

swiss bank

Switzerland Agrees to Common Reporting System or (“CRS”)

On November 19th Switzerland signed a multilateral component authority agreement to implement the new global standard on automatic exchange of information in tax matters, a move the OECD hailed as a “landmark decision”. (tax analysts)

This is a tremendous development, countries that have sat on the fence whilst determining CRS policy will now move forward with intent. It is uncertain whether the US and many other countries will become a signatory in the near future, as revenue laws will have to be amended to provide for the disclosure of beneficial owners.

Bahamas Registered Office & Agent

The FidPro Registered Office & Agent service is a very crucial offering. This service allows the client to act as Director and Shareholder for his/her personal investment companies. These companies often hold the bulk of the client’s wealth or shares of the family business. The ability to act as Director gives the client ultimate control and is often a practical solution when objectives are not being met by the current service provider.

The client as Director arrangement is most suitable when transparency is required e.g. Tax reporting purposes, whereby the company is considered a “walk through” and the client is deemed the beneficial owner and operator.

Provided that the appropriate KYC requirements have been met and the arrangement is tax compliant in the client’s home country, FidPro can provide Registered Office & Agent services from the Bahamas.

On the Benefits of Hold-All-Mail

Hold All Mail

Some clients prefer not to receive mail pertaining to their financial and banking products through the post or via courier. FidPro offers a Hold-All-Mail service (HAM), whereby FidPro holds bank and financial statements and other mail concerning the FidPro family office relationship for a period. Whilst more private for clients, this service may defer or prevent routine reviews of account activity by clients. FidPro recommends such reviews to avoid any chance of error or unauthorized transactions.

HAM clients acknowledge and agree that receipt of mail by the Hold-All-Mail service will constitute CONSTRUCTIVE NOTICE OR RECEIPT by the client. Therefore, the client assumes all risk associated with this service, including damages and waiver of rights due to delay or failure to collect the mail.

Release Address or Destroy Order:

Release Address: If the client after a maximum retention period, does not collect the mail in the Hold-All-Mail facility as FidPro recommends, then FidPro will arrange to have such mail delivered to a client approved mailing address referred to as a “Release Address”.

Destroy Order : The client agrees to contact FidPro to confirm balances before destruction. The client recognizes and assumes the added risk of never seeing their mail, yet agrees to be deemed to have constructive notice of its contents. By selecting Destroy Order, FidPro will arrange destruction of the unread mail. Such mail will be shredded and disposed of in a manner whereby confidentiality will be maintained.

Our Approved Hold-All-Mail P.O.Box Address is:

FidPro HAM, N4045, Nassau, Bahamas.

Do let us know how we can help you manage the copious amounts of mail you receive monthly…