The following describes what constitutes trust in Dominica and a foundation in Dominica, as well as what advantages they provide to the trust manager, the founder of the foundation and the beneficiary. We will study together how to create a trust and foundation in Dominica, and what requirements must be met in order to establish an offshore trust or foundation.
Creating an offshore trust for asset protection in Dominica
The following describes what constitutes an offshore trust in Dominica and how you can create a trust here. The advantages and purpose of such trusts are described in detail and it is indicated why the jurisdiction of Dominica is attractive to offshore founders.
To create trust in Dominica, you must meet all the following conditions. The founder of the trust property must transfer its assets / personal fortune to the trust. It is necessary to appoint a trustee who is responsible for managing the trust and enforcing the provisions of the declaration of trust in the interests of the beneficiaries (a person or group of persons who benefit directly from the trust). The trustee must be an adult in his right mind and must conscientiously execute a trust declaration. The guarantor controls the activities of the trust, ensures compliance with its trust declaration (trust agreement) and ensures satisfactory management of the trust. The trustee manages the trust on behalf of the founder (who transferred his assets to the trust) in the interests of the designated beneficiaries.
The founders need to understand the main difference between a non-offshore and an offshore trust, namely: in an offshore trust, assets are stored in another country, and the trust is created under the laws of an offshore jurisdiction.
Why create an offshore trust in Dominica?
Dominica is a tax haven for creating trusts, with modern legislation and competent administration in place. After the enactment of the Law on Concessions for International Trusts in Dominica in 1997, the trusts received an exemption on all taxes on the income and stamp duty, or on all activities carried out by the trustee. In accordance with the legislation of Dominica, international trusts are also not subject to currency regulation.
An attractive feature of trusts in Dominica is also the fact that potential heirs cannot sue the trust, and the assets of the trust cannot be seized. The rule of compulsory share in the hereditary mass in the case of trust in Dominica does not apply, which allows the founder to freely choose whom and in what size to leave his fortune. Many people want to protect their assets, and as a founder, you can transfer any of your assets into a trust and legally declare that you do not own them. Another advantage of trust in Dominica is protection from creditors. If a lender intends to file a lawsuit against a trust, he must deposit $ 25,000 as a security in case of loss of the case. In addition, he must prove the actual existence of fraud in the creation and management of the trust.
What is an offshore trust in Dominica?
Trusts are mainly used by very rich people to protect their personal condition and to provide for their children or future generations.
To establish trust in Dominica requires compliance with the three main requirements. First, the beneficiaries of the trust must always be non-residents. Secondly, the property in the trust should not include land in Dominica. Third, at least one of the trustees must be registered in accordance with the Companies Act 1994 or the International Business Corporations Act 1996. Under the Dominica Trust Law, a trust is 100 years old except in the case of a charitable trust, the life of which is not limited. Trusts in Dominica are registered in the registry. To do this, you must submit an application for registration and pay the established fee, provide the name and registered address of the trust, and finally submit a letter from the lawyer confirming that the trust is international.
The types of property that may be in trust in Dominica include, but are not limited to:
– Dominica government securities
– Deposits in a licensed bank
– Securities and shares
Assigning Dominica Trusts
– Asset Protection
– inheritance planning
– Benefits for children
– Benefits for employees
– Charity and social assistance
The most commonly used trusts in Dominica
– Guard Trusts – provide for the possibility of removing or adding proxies
– Charitable trusts – should benefit the public
– Target trusts – can be created subject to the rules of morality, legality, and legality and not violate the law.
Advantages of offshore trusts in Dominica
– Protection of the desires of the testator by avoiding the right to an obligatory share in the public mass
– no requirement for a minimum amount of capital to create a trust
– a high degree of reliability and confidentiality, since the registrar has no right to disclose information about the trust
– no inheritance tax
– avoid proof of authenticity
– exemption from income tax and stamp duty
– lack of currency regulation
– high level of asset protection and condition management
– the possibility of the existence of a trust up to 100 years
– ease of creating a trust in Dominica
– Very flexible trust structure.
Offshore Fund in Dominica
What is a foundation in Dominica?
In order to create a foundation in Dominica, a founder who is the person/organization creating the fund is required, the guarantor is necessary to ensure the conformity of the fund management, as in the case of trusts, the beneficiary is the person or group of people who benefit from the fund, board members. There are no shareholder requirements.
After the foundation is created, it becomes a legal entity and, therefore, the owner of the fund’s assets. As a result, the fund does not have a specific owner and is created, as a rule, in the interests of the company’s offshore clients. Funds can own a wide variety of companies and assets and can issue instructions, which, as in the case of trusts, are binding. Requirements instructions are included in the registration document of the fund and its charter.
Types of funds in Dominica
– Public fund – created by families, groups of individuals, etc.
– Private fund – created by private individuals, usually private investment funds
– State Fund
– Mixed Fund – can be created by any of the above.
Assigning Funds to Dominica
– Asset Protection Tool
– Protecting personal status from financial and political instability in their jurisdiction
– Asset management for planning and asset allocation through a centralized management system
– Tax planning of inherited assets
– Availability of corporate control and management
– separation of voting and economic benefits
– Profit participation schemes for employees
– Charity groups
Types of assets that may be located in an offshore fund in Dominica
– Shares and securities of private and public companies
– Bank deposits
– Life insurance policies
– Investment portfolios
– Real Estate
– Objects of intellectual property.
Advantages of a fund in Dominica
– Corporate asset protection
– Persons contributing to the fund in Dominica have the right to exclude the deposited amount from income taxation
– Dominica offers “tax haven” for foreign investors
– Dominica legislation provides a high level of confidentiality
– The geographical position of Dominica contributes to international relations and access to other jurisdictions of the world.
– A foundation in Dominica provides the founder and its property with a high level of asset protection.
– Payment of reasonable compensation for your services to the fund
– the assets are owned by the fund, not the designated person
– Ability to own numerous companies and enter into agreements with third parties
– The possibility of implementing the prescribed instructions, as is the case with trusts