Offshore news !
|Vanuatu To Join The World’s Optical Fibre Internet Backbone|
As part of the Government Vanuatu’s commitment to encourage the development of e-business and IT infra- structure, the Vanuatu Government has thrown it’s full support behind the current Joint Venture project between Interchange Limited, a Vanuatu local IT company and Alcatel-Lucent, the giant French telecommunications company to deploy Vanuatu’s first international submarine cable system linking Port Vila, the capital of Vanuatu, to Suva, Fiji.
Scheduled for completion in mid 2012, this new system will deliver faster, more efficient and cost-effective Internet connectivity to the pacific island nation, while removing the current dependence on satellite and strengthening Vanuatu’s competitive position as an e-business hub.
What is a Trust?
There are many definitions. However the one that has received judicial approval in England is taken from Underhill and Hayton, Law Relating to Trusts and Trustees 15th Edition, which states as follows:-
“A Trust is a an equitable obligation, binding a person (or, in the offshore world, a licensed trust company. Ed), who is called a trustee to deal with property over which he has control (which is called the trust property), for the benefit of persons (who are called the beneficiaries), of whom he may be himself one, and any one of whom may enforce the obligation.”
There are 3 parties to a Trust.
1. The Settlor, the person who entrusts this obligation to the Trustee by way of assets which can be cash, property etc to hold and administer according to the terms of the Trust Deed. Once this property is transferred to the Trustee, the Settlor no longer has any legal ownership. It becomes the Trust property and separate and insulated from the Settlor’s or the Trustee’s personal property and cannot be attached by creditors of the Trustee or Settlor.
2. The Trustee holds legal title to the Trust property subject to the terms of the Trust. He has no equitable rights over the Trust property and owes fiduciary duties to the beneficiaries of the Trust. He is accountable to the Beneficiaries. He is NOT accountable to the original Settlor and owes him no fiduciary obligations.
3. The Beneficiaries of the Trust have no legal rights to the Trust assets but have equitable rights to the Trust property to enjoy the benefits of the Trust assets according to the Trust Deed. Any act or neglect on the part of the Trustee not authorized or excused by the terms of the trust or by law is called a Breach of Trust. The beneficiaries NOT the Settlor have the legal right to enforce the Trust or take legal action against the Trustee for breach of Trust and subsequent losses.
Trust property can be cash, property, assets etc. Shares in companies can be considered as assets. A popular use of Trust structures in the offshore world is for the Trust structure to hold or manage an offshore corporation engaged in international activities. A Settlor may wish to maintain control over trust assets indirectly after having passed legal ownership of assets to a Trustee. The Settor can be appointed as the director of the international company, to manage the affairs of the company. In many cases this is useful, as in a family business built up over the years by the Settlor. The Settlor would be the best qualified person to continue running and managing the company successfully.
A Trust can also hold assets obtained by international corporations engaged in multinational trading. Stocks, bonds and cash investment products gained during international operations may be held in offshore trusts for tax planning purposes.
High net worth individual living and having assets in politically unstable regions where there are risks of Governments expropriating assets or impose harsh exchange controls may use an offshore Trust to protect their assets for the benefit of the family and future generations.
The legal uses of a Trust is only limited by the imagination.
As you can see, the KEY benefit is separation of legal ownership of the trust property from the Settlor to the Trustee has become very popular in the offshore world for asset protection and estate planning.
You need a Trustee with many years of experience in the international arena to assist you to set up the right structure for your tax and estate planning and to ensure assets are protected for your family’s future benefit.
Our associate company, Transpacific Trust Limited, a trust company was incorporated on the 30th March 1994 and has been offering trustee services to a wide range of clients from all over the world since.