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Introduction | Services | Billing Guide | Due Diligence AIRCRAFT REGISTRATION The Isle of Man aviation register, designed to attract owners of private, non-commercial aircraft in Europe, opened for business in March 2007. We can provide the planning of the ownership of the aircraft, structuring/establishment of the trust or company, establishment of bank accounts, preparation of the trust deed and associated document and administration and accounting services.. APOSTILLES See: Legalisation & Notarisation ASSET PROTECTION This is one of the key uses for corporate and trust structures, whether onshore or offshore. Whether for Common Law or Civil Law based clients, ILS is able to supply traditional asset protection structures, such as trusts and foundations, in order to protect clients’ assets from spurious suits and claims. Contact us for more information ATTORNEY-IN-FACT SERVICE Our London office provides a confidential and fully documented service to act as witness during the execution of a variety of contracts, agreements and other important documents. This is particularly useful for overseas clients who wish to avoid the time and increased cost of travelling to London. Contact us for more information BANK ACCOUNTS Clients using offshore corporate structures through ILS will normally need banking facilities to facilitate their trading or movement of assets. ILS can arrange a wide range of banking services in conjunction with company formation and administration. Confidentiality is the main reason for setting up an offshore bank account. ILS normally establishes bank accounts in the Isle of Man because of the close relationships we have there but, in practice, bank accounts can be set up anywhere offshore. It is not necessary for the bank account to be in the same location as the company. Clients who have set up an offshore structure will not normally want to have their name appearing as a signatory on the company's bank account. Opening a bank account: Choice of banks Many clients may have a favourite bank they wish to deal with, but most leave the choice of bank to ILS. We use only carefully selected international banks offering a wide range of facilities, and who are experienced in dealing with offshore structures. We do not consider it prudent for US clients to have accounts with banks which have US parents. Bank charges North American clients may find UK and European bank charges higher than those in the US and Canada. Requirements Because of the stringent money-laundering laws now in place in most offshore jurisdictions, banks need a lot of information, in addition to that required to be held by ILS, before they will open an account. Normally this is:
Operation of company bank accounts Where ILS is appointed as directors to the company, we will insist on providing signatories to the company's bank account. No fee is charged for the provision of signatories in these circumstances. Should the client wish to exercise a degree of control over the account, we can accommodate this by appointing the client as a joint signatory to the account. In this way, neither the client nor ILS can transfer funds from the account without the other party's consent. All bank instructions passed to us by clients must be in writing and accompanied by documentation relevant to and supporting the transaction. The relevant company administrator then draws up the instruction to the bank. Fax Key Where instructions are to be passed to the bank by facsimile or other means that does not carry an original signature, stringent security procedures need to be followed to avoid any potential fraud. Different banks operate different security systems and ILS is familiar with, and able to operate, a variety of these systems to ensure the security of clients' funds. Safeguards ILS only appoints its senior staff as signatories to client company bank accounts. Each instruction is checked for accuracy and signed off by a Senior Company Administrator or Manager as being correct. The instruction to the bank is then countersigned by two of the ILS signatories and passed to the bank for action. Contact us for more information CLIENT ACCOUNTING Under current compliance standards, it is essential that the directors of a company maintain proper accounting records, including the preparation of final accounts on an annual basis. In some jurisdictions accounts have to be filed with the Registry. Our dedicated client accounting teams in London and the Isle of Man can take care of this task for you. Services provided include:
COMPANY ADMINISTRATION Most clients prefer us to look after the ongoing administration of the companies and trusts we establish. Teams of highly trained administrators in our Isle of Man, BVI and London offices look after the day-to-day operation. They deal with meetings, Minutes, bank instructions and many other functions, maintaining close contact and reporting regularly to the client. We can offer a comprehensive service on a reasonable fixed price basis, or tailor-made services on a time-cost charging basis. Both the level and choice of services available are very flexible and our administrators can deliver any of the services detailed in this section. We are happy to work with our clients at any level they wish. Contact us for more information COMPANY INCORPORATION We incorporate companies rapidly and efficiently in over 40 countries of the world, both offshore and onshore. With our own offices in several locations, and online links to registries, we give an unparalleled level of service. ILS incorporations are on a full-service basis with all initial documentation completed and officers appointed, where appropriate. Whilst we do not give tax advice we are happy to compare and contrast the many offshore and onshore jurisdictions and to suggest alternative structures which your tax consultant can consider. The effectiveness of the structure depends very much on having professional directors and efficient administration, which may involve accounting, invoicing, and operation of the company's bank account. ILS will provide as part of its incorporation package a set of Memoranda and Articles of Association, a seal, a set of share certificates, and a combined register containing all the records required by the jurisdiction including a minute book. Where ILS provides the company secretary, it will retain these books. Where the client or his professional advisor fulfil this function, the documents will be held by them. Our incorporation procedure For a typical company the procedure will be:
Your company will continue in existence as long as you wish. Each year we invoice you for the annual fees and government taxes which are payable. You will also be billed at least once a year for any administrative work we have done on your behalf since the last bill.. Accounts Most companies are required to keep some form of accounts and ILS can take care of this function for you reasonably and efficiently. See Client accounting and Invoicing & book-keeping. Audit Some jurisdictions require an annual financial audit by an independent accountant or CPA of the company's activity for the year. We can advise on the selection of a suitable firm to undertake this work and provide fee estimates. Often a non-trading company, such as an asset holding company, can simply file a non-trading declaration. Costs Cost differs according to the type of structure used, the jurisdiction, whether we provide officers for the company and whether or not the company is active. The costs of a full service company with directors, a registered office, etc. may be in the region of $3000 for a simple company with perhaps $1500 each year for ongoing costs, but this should be seen in the context of the savings which can be made, which are usually substantial. More sophisticated structures may cost considerably more. Bank accounts We can open a bank account for you in any offshore or onshore jurisdiction of your choice. Most often we use the Isle of Man as a bank account location. With our main office there we can control the account effectively for you. You will probably wish to maintain confidentiality by using ILS's signatories. This is possible only where we are acting as directors on the company. The bank will need to know that we have carried out the full due diligence procedure, in addition to which they will also usually need to have an indication of the company's trading activities and a projection of the likely cash flow. Banking confidentiality is a cornerstone of international finance centres and there is no question of the beneficial owner's identity being divulged, except in the case of a properly authorised criminal investigation. See Protection of the beneficial owner’s identity. The company's bank account may be denominated in any currency, but is most often in Sterling, Dollars or Euros. Remember that if it is a Dollar denominated account clearing of cheques will at some stage involve the US. If the beneficial owner has no connection with the bank account this should be of no concern. US residents should be aware that the cost of operating a bank account in Europe is considerably higher than that which would be expected in the US. Cheque clearing, exchange transactions and telegraphic transfer charges will all appear high. What to do next? Talk to your lawyer, attorney, CPA or accountant. Look carefully at your situation regarding taxation and assets. How much do you stand to gain from the arrangement? What will it cost to set up and maintain? When your plan is complete, talk to ILS. Call us for a confidential conversation, e-mail us, visit us or ask us to arrange a videoconference. Our professional and personal service will establish your corporate structure and look after all the details - the documentation, the administration, statutory compliance and the annual renewal arrangements. Contact us for more information CONFERENCES From time to time ILS arrange and host conferences in various parts of the world aimed at updating professionals on the tax-efficient use of offshore and onshore structures. Contact us for more information CORPORATE STATIONERY Our Guernsey based associate company, ILS Products Limited, produces a range of integrated loose-leaf hard copy records for the administrators of companies and trusts worldwide including, registers, company kits, seals, minute books, share certificates, rubber stamps and company nameplates. Visit: ILS Products CORPORATE VERIFICATION SERVICE FOR BANKS In the new regulatory environment prevailing in the offshore islands, and particularly the Crown Dependencies, it is good practice for banks to make checks annually on client companies holding corporate accounts. Ascertaining whether they are in good standing should be a normal part of the due diligence procedure. This important function can be very time-consuming. As a leading specialist corporate service provider, with our own offices in 10 locations as well as Associates in all the world's offshore jurisdictions, ILS is well placed to help. We have on-line connections to many of the registries we work with and are able to provide the information you may require efficiently and at modest cost. Fees are negotiated depending on volume and jurisdiction, and may be as low as £25 per entity. An annual contract with ILS will remove a significant due diligence headache. Confidentiality is assured. We only need to know the name and the registration number of the subject company. Further protection is afforded by the fact that we are fully licensed in the Isle of Man and the British Virgin Islands. For more information please contact our sales team DIRECTORS & CORPORATE SECRETARY Subject to certain safeguards, we are able to provide directors and secretaries, either individual or corporate (as the jurisdiction permits), for client companies. The services of a qualified resident secretary are mandatory in the case of Isle of Man Exempt companies. If ILS provide individual directors for your company they will be directors or senior management members of ILS who have their own reputations to protect but are prepared to take the responsibility of acting as directors to reputable client companies subject to certain safeguards. These safeguards, in addition to the whole due diligence and 'know your client' procedure, include:
DOCUMENTARY SUPPORT Certificates of Good Standing, Certificates of Incumbency, certified extracts of documents. Call any ILS office. DOMICILIATION & OFFICERS We can provide the company's registered office as well as the company secretary, Directors and Nominee Shareholders. Conditions apply to the provision of officers. See also Incorporation. Contact us for more information DOMAIN NAME REGISTRATION We are now able to establish a domain name for clients, which will reside on our servers. Uniquely, clients have full control over their mail system where most existing arrangements involve recourse to an ISP for any changes. We have our own servers, maintained and protected to the highest standards by our own IT specialists, specifically dedicated to particular areas of our business and hosting our mail, our websites and databases. The service is very much bespoke and is designed to suit each client's needs. Fees are very reasonable since, once the system is established, there should be little need for any outside involvement. Clients have an e-mail address or a suite of e-mail addresses using their company's unique domain. The e-mail traffic can be routed direct to the client or handled by us as part of our administration service. Key features of the service are:
FILM ADMINISTRATION & CO-PRODUCTION The motion picture, theatre and musical industry is well known for its complexities and the international nature of its work. The inherent challenge this presents to the proper structuring of matters relating to taxation can sometimes be formidable. Working crews, extras and all other staff who contribute often have to be paid in locations outside of the UK. Equipment has to be moved around internationally and many actors and actresses, having different domiciles, are often forced to consider very complex personal taxation arrangements. In addition to the obvious logistical challenge this presents, these industries may also have financing in place, also derived from various locations globally, making taxation extremely challenging, as a whole. ILS Fiduciaries has a specialist and dedicated international Film Division, located in our Isle of Man office, which handles many of the complex issues unique to the industry. We manage to achieve this on a day-to-day basis by centralising the administration in the Isle of Man and by simplifying operations in the most tax efficient ways possible. From such a location, our clients feel fully supported at every level. The services we provide would normally range from full maintenance of statutory corporate records, to any day-to-day support necessary, whilst filming, acting or entertaining is actually in progress. ILS Fiduciaries is able to handle and process all types of payments associated with the running of such projects. For a typical client, such as a US Film Production Company, we deal with multi-currency payments and the supply of detailed accounting information for them on a daily basis. Most activities are very carefully structured in order to recognise the need to deliver such services on a time critical basis. An important part of a creative enterprise such as this is understanding how best to manage any intellectual property and the effective routing of royalties that would normally result. Our Film/Entertainment Division at ILS has gained considerable experience in this particular field and in so doing are able to provide proven highly tax-efficient solutions. ILS Fiduciaries has a wholly owned global network of offices worldwide. The Group’s head offices are situated in the sophisticated independent low-tax jurisdictions of the Isle of Man, with other offices important to the IP industry located in Switzerland, the British Virgin Islands, London, Dubai and Hong Kong. All are extremely well regulated and recognized for the high standard of services they are able to supply globally, but especially to the film, music and entertainment industries in particular. The Isle of Man also has its own Film Commission, which is fully endorsed by its Government, placing ILS Fiduciaries in an ideal position to assist any client who requires additional help before making their final decision to base activity in the Isle of Man. Angela Wilby is responsible for heading up the Film/Entertainment Division for ILS Fiduciaries and would be delighted to assist you with any enquiry which relates to the film, musical or entertainment industry. Please feel free to contact Angela for more information or on her direct line at +44 1624 682516 INHERITANCE PLANNING The protection of wealth, once created, and the ability for this wealth to be passed from generation to generation, requires the legitimate avoidance of inheritance taxes. Different countries approach inheritance taxes in different ways. Some encourage the passing of wealth to close family members by applying low rates of tax to such bequests, but much more punitive rates to remoter family or non-family members, whilst some other countries make an absolute requirement for certain property to be left to certain relations. Many clients wish to be masters of their own destiny and leave their wealth as they, rather than the State, wish. ILS have a number of wealth protection products which allow clients to dictate who their wealth is left to. Whilst Trusts, Foundations and Life Insurance products are the most popular of such products, the simple introduction of an offshore company can achieve remarkably successful solutions for some clients. Contact us for more information IN-HOUSE SEMINARS We bring our conferences to you. ILS have run many successful in-house seminars for major law firms and accountancy practices in the UK and Switzerland. These provide confidential training sessions for partners and staff on the latest developments offshore and onshore. A bespoke schedule is agreed in advance and no fee is charged. In many cases CPD points are awarded. For the UK please click here For Switzerland please click here INTELLECTUAL PROPERTY STRUCTURES The tax efficient exploitation of a client's intellectual property can yield startlingly beneficial results. The key to this success is identifying a piece of intellectual property before it has acquired any significant value. Whether the intellectual property is a patent, a copyright or an image right, the successful sale or assignment of this property to a corporate structure and the subsequent licensing structures used to take advantage of various double tax treaties allow ILS's clients to enjoy the maximum benefit possible from their creative abilities.  Contact us for more information INTERNATIONAL TRADE STRUCTURES Cross border trading often gives rise to tax planning opportunities. Substantial opportunities exist where goods are moving cross border, or across multiple borders, and the use of nominee and agency companies can provide significant taxation reductions. Once profit has been generated there is often the need to remit these profits to the ultimate low tax destination through the use of suitable holding, or tax transparent entities, often incorporated in what are otherwise regarded as high tax jurisdictions. Contact us for more information INVOICING & BOOK-KEEPING We can undertake offshore invoicing with a service as basic or comprehensive as required. We can also provide the entire administration and book-keeping for your company to Trial Balance stage, using a variety of software applicationsWe can undertake offshore invoicing with a service as basic or comprehensive as required. We can also provide the entire administration and book-keeping for your company to Trial Balance stage, using a variety of software applications. See also Client Accounting. LAWS & PUBLICATIONS Full texts of most offshore company and trust laws can be supplied for a nominal fee. Many are also now available for download from our website. Contact us for more information LEGALISATION & NOTARISATION We can offer a very professional service, with rapid turn around time and very competitive fees. All ILS offices are able to provide this service, but our London office, in particular, has built up close relationships with many of the Embassies, High Commissions and Consular offices in the City of London. Contact us for more information LETTERS OF CREDIT Many international trading operations require the establishment of Letters of Credit in order to ensure goods can be shipped from supplier to purchaser. ILS is able to arrange Letters of Credit in the Isle of Man or London in order to facilitate such international trade. Contact us for more information MAIL, PHONE, FAX & E-MAIL Where ILS provides administration facilities or a registered office for your company, it is an added benefit for an active company to facilitate contact by quoting telephone, fax and email numbers on all letters, invoices, etc. We do not accept communications on behalf of clients on our own main numbers. If you wish to quote numbers on your letterheads and other written communications we can provide use of shared client lines for a reasonable annual fee. These lines are simply answered with the number. Where your company is actively trading, you may find it useful to have dedicated numbers which are answered in the name of the company. Messages, faxes and e-mails can all be forwarded on by e-mail or other chosen method and personalised voicemail facilities are available for handling out-of- hours messages. A dedicated communications system tailored to your needs and answered in your name can also be arranged and will give additional credibility to your corporate presence. We provide mail forwarding and your messages can be forwarded by mail, telephone, fax or e-mail. Please contact any ILS office for more information and a fee guide. MARITIME REGISTRY TRANSCRIPTS Where claims arise in maritime cases it is often vital to ascertain where a vessel is flagged at any given time. ILS has considerable expertise in maritime matters and can provide transcripts from any shipping register quickly and for a reasonable fee. Contact us for more information OFFICES & BOARDROOM FACILITIES Most of our offices have fully equipped boardrooms which can be hired by the day or by the hour for important meetings. Video conferences can be arranged between most major cities of the world. Temporary office facilities can usually be made available. OFFSHORE COMPANIES & VAT The Isle of Man’s special position as an offshore centre within the EU customs area makes it possible to benefit from the use of an offshore company whilst satisfying the EU's VAT requirements. ILS has a wealth of expertise in this area and can establish and administer tax-efficient structures for those trading within the EU. See also VAT/TVA accounting. Contact us for more information POWERS OF ATTORNEY We are happy to draft and legalise limited Powers of Attorney, subject to certain restrictions. Where ILS is providing directors to the company, and we are asked to issue a Power of Attorney or appoint additional unknown third parties as directors, we require full due diligence in respect of the persons to be appointed. Please note that, where ILS provides directors to a client company, Powers of Attorney will only be issued for specific purposes and for a limited duration. Contact us for more information PROPERTY OWNERSHIP STRUCTURES The efficient holding of property can be enormously beneficial from a tax saving point of view. ILS has several specifically designed ownership structures for those owning property in Portugal, France, Greece and a number of other popular locations.
REDOMICILIATION Some of our clients are finding that a move to another jurisdiction will allow them greater flexibility in the operation of their company and in some cases allow a reduction in annual charges or taxes. Redomiciliation is the continuance in existence of a company whilst relocating its domicile. Some jurisdictions make it easy to redomicile in or out, some make it difficult and in some cases the law does not provide for redomiciliation at all. It is important to ensure that the name of your company is not already in use or reserved in the destination. The BVI, for instance, has so many names on its register that it is quite difficult to find a unique name. A cheaper and simpler alternative can sometimes be to form a new company with the same name in the destination jurisdiction and then to migrate the assets from the old company to the new company, finally letting the old company die. The redomiciliation process can be quite complex and requires a clear understanding of the laws of the countries involved and the correct procedures to be followed. ILS is happy to advise you on the feasibility of a redomiciliation for your company, and can estimate time and fees. We can then take over all aspects of the process on a time-cost basis, liaising with the client at all stages. Contact us for more information RESTORATION OF COMPANIES If your company hasn’t been kept completely up to date and in good order, you may have problems ahead, especially as new legislation appears in many countries. ILS can do all the work needed to bring your company up to current standards and ensure that all the legal and statutory requirements are met. One of the most important factors, of course, is that that any assets of the company are at risk if the company is in default. You need to consider whether:
Company searches, legal opinions and liaison with banks can all be undertaken. We can provide Certificates of Incumbency or Certificates of Good Standing. Where necessary a voluntary dissolution can be arranged. Having restructured and repaired your company we will, of course, be very happy to look after it on an ongoing basis. Contact us for more information ROYALTIES & INTELLECTUAL PROPERTY Ensuring the most tax efficient means of exploiting a client’s intellectual property offers numerous tax planning opportunities. The exact structure used will depend on where the intellectual property was originally domiciled, and where it is to be ultimately exploited. Such structures usually involve both onshore and offshore components to ensure efficient use of double tax treaties, whilst guaranteeing the client the best possible ultimate return. Contact us for more information SAFE CUSTODY The increase in ‘know-your-client’ requirements over the past decade or so has led to increased need for custodial facilities. ILS has been offering a cost-effective and efficient service for some time. Offshore finance centres have progressively been eliminating or immobilising bearer shares. Bahamas and Mauritius and the Isle of Man have eliminated their use. Belize and the BVI have immobilised them. It is the immobilisation in the BVI that has brought the issue of custodial facilities more sharply into focus. ILS offers a very cost-effective service for the secure custody of bearer shares (and other instruments) in a fire proof safe either on or off-site. We are approved by the BVI authorities as a custodian for BVI shares. Of course it is not just bearer shares that clients ask to be placed in safe custody. Registered share certificates, declarations of trust and wills, in fact any important document that needs to be secure and safe, and totally confidential, can be stored by us. Contact us for more information SEARCHES As the need for more information and greater transparency increases, so does the demand for company searches. ILS can arrange searches in any jurisdiction in the world, providing basic or detailed information as required. We have negotiated special rates for the most popular International Finance Centres. Several ILS offices are on-line to their registries and can respond rapidly. We are often asked to try to track down a company where the name is known but the jurisdiction of incorporation is only suspected. Certificates of Incumbency and Certificates of Good Standing can be obtained at the same time or as a separate exercise. Fees vary according to jurisdiction but start from as little as GBP75. For UK searches contact ILS Fiduciaries (UK) Limited For BVI ILS Fiduciary (BVI) Limited For all others contact ILS Fiduciaries (IOM) Limited SERVICE OF PROCESS AGENCY We accept appointments as Service of Process Agents. Full documentation and instant access to records means an efficient service, and we can respond by routing and notifying all parties appropriately. Contact us for more information SHIP REGISTRATION & FLAGSTATE CONSULTANCY Our London office has considerable experience in shipping and is in constant touch with key flag states and ship registries. We are thus able to provide an efficient consultancy service for clients seeking alternative flag states for their ships or fleets. We can advise on suitable locations, arrange registration, and provide corporate structures to own and operate the vessel or fleet. Contact us for more information TAX PLANNING ILS itself does not offer tax advice, but is able to provide this through a recommended specialist. We recommend that every client takes professional tax advice before establishing a structure. Contact us for more information TAX RESIDENCY CERTIFICATES When dealing with UK companies, some overseas fiscal authorities require what is known as a Tax Residency Certificate, issued by the tax authorities in the UK, indicating that the UK resident Company has paid its Corporation Tax in the UK. This is in order that the UK Company may legitimately avoid ‘Double Taxation’, provided an appropriate Double Tax Agreement is in place between the UK and respective country concerned. Many of our clients having an interest in UK companies appreciate how difficult it can sometimes be to obtain the necessary documents from the UK tax authorities and that obtaining Tax Residency Certification is by no means guaranteed upon application. Obtaining official written confirmation of Tax Residency for UK companies can often be a very time consuming process for our administrators. However ILS now have considerable experience regarding this process and have been very successful in obtaining Tax Residency Certification. Contact us for more information TRANSLATION SERVICES Using specialist and, where necessary, ‘authorised’ translators we can help arrange for the translation of documents into any language. Contact us for more information TRUSTS The use of offshore structures provides many opportunities for tax and estate planning. Corporations are one solution, but trusts provide a whole range of other opportunities. The trust is a concept becoming more and more widely known and used outside the traditional English speaking ‘common law’ countries, because of its considerable benefits in tax mitigation, asset protection and inheritance planning. Our Trust Division establishes and administers trusts, which can be used to hold a variety of assets, from a simple shareholding in an offshore company to a complete estate. Trusts may be established as stand-alone solutions or as part of a structure.
There are many forms of trusts. The defining factor of most is that a person (the settlor) transfers assets to the trustees, to be managed and controlled by them for the benefit of the beneficiary. When a settlor places assets in a trust he generally ceases to have any interest in them. The benefit passes to the beneficiaries or is held on their behalf: the terms of the trust dictate when income or capital or other property is handed to the beneficiary. Trustees may have partial or full discretion. The Settlor may have some influence on how the trust is administered through the terms of the Trust Deed and a letter of wishes. The Settlor must not control the assets. He can, however, also be a beneficiary. Under trust law the trustees are responsible to the beneficiaries for the proper administration of the trust and have a strict legal obligation always to act in their best interests. The legal ownership of the assets is vested in the trustee and the equitable or beneficial ownership is held for the beneficiary. It is important to note that a trust is a relationship established between the trustees and the beneficiaries, not a separate legal entity as is a company. Types of Trust Though there are several types of trust structure, ILS normally establishes discretionary trusts – those where the trustees have full discretion in the administration and disposal of assets – for its clients. Discretionary Trust A “discretionary” trust is a trust under which the trustees have discretion concerning distribution of the trust assets. The trust deed will generally specify a class of beneficiaries and, in a typical case, the trustees will periodically decide whether to distribute trust income to one or more of the class or to retain it and add it to the capital of the trust fund. The trustees’ discretion may also extend to the distribution of capital. In most cases, the settlor will provide a “Letter of Wishes” to the trustees indicating which of the beneficiaries he/she would most like to benefit (and how) during his/her lifetime and following his/her death. Whilst a Letter of Wishes can assist the trustees in deciding how to exercise their discretion, it cannot bind the trustees to act in accordance with its terms. The settlor can issue any number of such letters during the lifetime of the trust. ILS can provide discretionary trusts in the Isle of Man or UK. Interest in Possession Trust An “interest in possession” trust or “fixed interest” trust is one under which a particular beneficiary is entitled to the net income of the trust for a specified period. In most cases, the entitlement or “interest” will continue for the rest of the life of the beneficiary (a life interest) and on his/her death the trustees will have discretion to distribute the trust income amongst a class of discretionary beneficiaries or retain it and add it to capital. It is possible to provide a further life interest in favour of, for example, the beneficiary’s spouse to arise on the death of the beneficiary. A power to advance capital of the trust’s fund to the person holding the life interest can also be included. ILS can provide suitable structures in Isle of Man or UK. Purpose Trusts A purpose trust is a trust which does not have any beneficiaries, and exists for a specific purpose. Purpose trusts are not trusts in the true sense and are designed to be used as adjuncts to tax planning structures in various ways. They have several significant advantages over conventional trusts in certain situations. An important factor is that there is a clearly defined Trust Deed and strong modern legislation supporting the structure. Under Isle of Man law there must be two or more trustees to a purpose trust, at least one of whom must be a person in one of the categories specified by the Act. To enforce the trust there must be an ‘Enforcer’. Uses include off balance sheet transactions, corporate finance and asset financing, division of voting and economic benefit, ownership of trust companies, securitisation, social benefits and investment in family companies. Its use in segregating assets, in dealing with fixed term events like loan repayment, in providing a layer of confidentiality and its flexibility are its key advantages. BVI VISTA Trusts The Virgin Islands Special Trusts Act 2003 gives its name to the VISTA trust. It has the unique advantage of eliminating conflicts between trustees and the directors of underlying companies. Where there is an active business, the constraints on the trustees under the ‘prudent man of business’ rule may mean perhaps liquidating the company even though this is against the wishes of the settlor. The new VISTA trust provides a solution to these drawbacks. The trustee is no longer obliged to intervene, monitor and take management responsibilities for the underlying company, thereby eliminating the requirements of the ‘prudent man of business’ rule. Note that VISTA trusts may only hold shares in BVI IBCs or domestic companies. The trustee must be a licensed company. ILS Fiduciary (BVI) Limited holds a full Trust Licence. Uses and advantages of a trust Confidentiality No public records exist of a trust in the Isle of Man. Client confidentiality is a key part of ILS's service. Tax mitigation The settled assets of the Trust are subject to the taxes in the country of residence of the Trustees. The Settlor, who no longer owns the assets, will therefore not be liable for any capital gains taxes or inheritance taxes on an Isle of Man Trust. Continuity Assets in an anonymously held bank account may be lost on the death of the account holder. If the account is held by a Trust, continuity beyond death is assured and it will not be necessary to prove ownership. The use of a corporate trustee prevents problems should an individual trustee die. Asset protection Once assets have been properly transferred into a suitable trust, those assets are fully protected from attack by future creditors. Special forms of trust exist designed specifically to protect assets from attack and such trusts provide extremely effective and robust protection. Trusts are excellent asset protection vehicles and are thus valuable devices in times of political and economic instability. Inheritance planning The assets of the trust are not included in the Settlor's Will as they are not legally his property. This gives the opportunity to make specific transfers of assets to Beneficiaries outside the rules applied in some countries as to who may inherit. ("Forced heirship") Probate - The normal means of dealing with a will. It takes time and may involve public knowledge of the deceased's assets, including, perhaps, their offshore arrangements. A trust allows distributions to be made to Beneficiaries simply, quickly and confidentially. It is possible to make specific provisions in the event of death as to children's education and income, life income for the widow, establishment of contingency funds, etc. A trust prevents the division of assets amongst heirs at the time of death so that the fund can be protected and accumulated. Assets may be preserved for later generations. A trust may also prevent the forced sale of a family business. Payments may be made but continuity is assured. Provision can also be made for a fund for disabled or disadvantaged members of the family. Assets can be protected for children until they reach the age of majority. Commercial uses A trust may be used for commercial purposes as, for instance, in unit trusts, where the assets are held by trustees and managed by the fund managers for the benefit of the investors. Certain types of trust can be used to keep high risk / value items away from the parent company’s balance sheet and offer protection to lenders. Trust as owner of an offshore company Where the assets of the trust are actively trading or constantly moving a trust may be a cumbersome means of operation. In this case it may well be beneficial to have the assets held in a company where day-to-day operation can be effected by the directors, whilst having the ownership in the trust. The use of a Trust removes any questions about beneficial ownership of companies and the location of the ownership and control for tax purposes. Where to establish the trust Apart from the BVI VISTA Trust mentioned above, we favour the use of the Isle of Man as the premier trust jurisdiction. The Isle of Man is a politically and economically stable British Crown Dependency only 31 miles from the coast of England. As a major international finance centre it has excellent resources available in terms of professional and financial services, legal and accountancy advice, as well as sophisticated investment and banking facilities. A modern trust law regulates the actions of trustees and there are criminal penalties for abuse of trust. The existence of an Isle of Man trust is not a matter of public record. An Isle of Man trust is not subject to income tax, capital gains tax or inheritance tax in the Isle of Man, provided beneficiaries are not resident in the Island. In certain circumstances a UK trust may provide the right solution for the client. Why ILS? ILS has extensive offshore experience in both corporate and trust work throughout the world and our highly trained senior personnel administer trusts through ILS Trustees Limited. ILS is a respected offshore corporate services Group established for 30 years and with offices in BVI, China, Dubai, Hong Kong, Isle of Man, London, Portugal, Switzerland, Turkey and Uruguay. Group companies are licensed by the authorities in the Isle of Man, Dubai and the BVI. Our experience and integrity are your safeguard of secure and confidential handling of your affairs. How ILS can help
We charge an initial fixed fee to establish and structure the trust, including the drafting and settling of the Trust Deed. A fixed annual fee is charged for basic maintenance of the trust. Administration fees are charged for extra work on a time basis according to the amount of work involved. We shall be happy to estimate costs. Information on trust fees is available from any ILS office. The next step Please contact our Trust Division for a confidential discussion about your needs and we will be happy to explain the mechanisms and procedures involved.
VAT/TVA SERVICES Trading structures operating within the European Union will require VAT registration in order to account properly for their purchases and sales, and in order to prevent them suffering VAT which they are unable to recover. ILS can arrange VAT registration in the following countries.
Value Added Tax (VAT) was introduced in the UK on 1 April 1973 shortly after the UK joined Europe. VAT is the common tax of the EU and is expected eventually to apply in the same manner in each Member State. On January 1, 1993, major changes took place affecting the charging and collection of VAT throughout the Community. For VAT purposes, the boundaries between Member States disappeared, leaving the Community as effectively one nation. Before the changes, goods could be sold between Member States without liability to account for or collect VAT. After the changes, this was no longer the case and companies involved in such trading fell within the VAT "net" for the first time. Offshore companies and VAT Offshore companies have long been used to minimise tax on international transactions. In order to comply with the EU rules, offshore companies trading within the EU have to register for VAT so that transactions between Member States using an intermediary offshore company can be zero-rated for VAT. Where to register offshore? Where to register for VAT is a key decision. It is important that the tax benefits of the offshore company are not lost, and it may not be desirable to register in certain Member States. This could imply residence of the offshore company in the Member State and could create a future tax liability there. As long as the offshore company is registered for VAT somewhere within the EU, and is undertaking 'triangular' trading (see diagram), it does not have to register for VAT elsewhere, irrespective of where the trading takes place. The territory in which the registration occurs is immaterial. Of the traditional European offshore centres, Jersey, Guernsey and Gibraltar are not part of the VAT zone, making VAT registration there impossible. Other schemes, using the Netherlands and the UK, for instance, are possible, but are not strictly offshore solutions. The Isle of Man is unique in that it has offshore status but is treated as part of the EU Common Customs Area - the 'VAT zone'. We recommend the Isle of Man as the most effective way to protect the offshore company's tax position, and the only suitable English-speaking jurisdiction. How ILS's VAT solution works  The advantages of VAT registration in the Isle of Man are most apparent in triangular trading situations - where goods are sold from one Member State to another via an offshore company.This structure is appropriate for existing companies incorporated in almost any offshore jurisdiction. ESTABLISHING A VAT STRUCTURE Requirements of the Isle of Man authorities Setting up a new offshore structure Where the benefits of using the Isle of Man are sought, but no existing offshore company is in use, the procedure is simple. The first step is to form a new Isle of Man company. We will then register the company for VAT and a VAT number will be issued which can be validated by Customs officers throughout Europe. All Isle of Man companies which trade and have a turnover of £61,000 and above are required to register for VAT. Management and control of the company is provided by ILS. Registering an existing offshore company If not an Isle of Man registered company, an existing offshore company has first to be registered in the Isle of Man as a "Foreign company with a place of business in the Isle of Man". We will then register the company for VAT and a VAT number will be issued which can be validated by Customs officers throughout Europe. All Isle of Man Companies who trade and have a turnover of £61,000 and above are required to register for VAT. Management and control of the company is provided by ILS. The VAT structure in practice Goods are invoiced by the supplier company to the Isle of Man company and the Isle of Man company invoices the ultimate customer in another EU country. The invoice values are set at rates which enable as much of the profit as possible in the transaction to arise offshore and be retained there at a low rate of corporate tax. Such rates must represent a fair 'arm's length' value in order not to breach transfer pricing legislation. Invoices are usually raised by ILS on the client's behalf and, provided the VAT number is shown, the goods can move directly from source to destination. All original purchase invoices will need to be sent to ILS so that the VAT accounts and the quarterly VAT return can be prepared. The company's bank account will receive all moneys and will need to be funded with sufficient to pay the VAT fees, etc. ILS is able to run the company's entire administration including raising invoices, paying suppliers, operating the bank account, keeping the VAT records and preparing the VAT returns. We charge time-based fees for administration and will be happy to provide an estimated annual cost for operating your company. The UK alternative ILS is also able to provide VAT registration in the UK, although this may not provide the same level of tax protection as the Isle of Man. The UK can provide VAT registration, and clients using our UK nominee company structure for EU trading may register in the UK for VAT, whereupon we can provide similar facilities as for the Isle of Man structure. ILS's VAT departments and fees ILS has established a specialist VAT Accounting Department with highly trained personnel and dedicated computer facilities. We are able to provide administration of your VAT registered company to meet the requirements of the authorities and to match any trading arrangements the client may require. This may include company formation and administration, provision of officers, nominee shareholders, bank account opening and operating. Our fee schedule for the provision of VAT services is available on request. An advance payment is required for the initial VAT registration, "F" registration of the company if required, and the provision of local directors and secretary. There is also a requirement to pay a Corporate Charge, which will cover the period from application to the following 5th April. Isle of Man VAT registration fees and the fees for the provision of directors and secretary, etc. are, in the first instance, calculated on a per calendar month basis until 31st March next. Thereafter, one invoice will be sent to you each year in February or March covering all responsibility fees for provision of officers, etc., and for disbursements paid to the Isle of Man authorities. Once initial registration has been completed, charges are made on a time basis. A standard hourly charge applies to all work involved in maintaining the company's VAT accounting records and administering the company in accordance with the client's wishes. Detailed time sheets are prepared for each company and presented on a quarterly basis in arrears. In addition to the time charges, there is a fixed fee for each quarterly VAT return prepared and filed. The next step If you would like more information on European VAT and the use of offshore companies please do not hesitate to contact Steven Windsor on +44 1624 682519 (direct line), fax +44 1624 628488 or E-Mail: steven.windsor@ils-world.com Our VAT registration application form and fee scale are available on request. Nothing in this document should be construed as tax advice. We recommend that clients take professional local tax advice before proceeding with any offshore structure. YACHT REGISTRATION ILS’s shipping specialists register yachts of all sizes in various jurisdictions. Corporate ownership is often required. We can also attend to details like the VHF licence, registering the EPIRBs, setting up MMSI and DSC with numbers and callsigns and local registration.
Updated: December 2006 |