B y Q W e a l t h L t d
Table of Contents
UNTOUCHABLE WEALTH .................................................................................... 3
GOVERNMENT AND THE JUIDICIAL SYSTEM OUT OF CONTROL ............................................. LITIGIOUS PLAINTIFFS AND RECKLESS GOVERNMENTS....................................................... IS ASSET PROTECTION COMPLICATED? ............................................................................. THE BEST AND SIMPLEST WAY TO PROTECT YOUR ASSETS .................................................. OFFSHORE ASSET PROTECTION JURISDICTIONS ................................................................ OFFSHORE PROTECTION AGAINST FRAUDULENT TRANSFER CLAIMS ..................................... 3 4 5 5 6 7
SELECTING AN ASSET PROTECTION JURISDICTION .......................................... 8 THE NEVIS LLC: THE WORLD'S BEST ASSET PROTECTION VEHICLE? ................ 8
WRITE YOUR OWN CORPORATE LAW? ............................................................................... 9 WHY USE A NEVIS LLC?..................................................................................................10 REPORTING REQUIREMENTS FOR NEVIS LLCS ...................................................................12 THE LAST WORD FROM PETER MACFARLANE ..................................................................12 HOW Q WEALTH CAN HELP YOU ......................................................................................12 Q Wealth is here to help you: .......................................................................................12 Here's How Q Wealth can help:.....................................................................................13 If you fit in any of these categories, you need Q Wealth:..................................................13 Why You Need to Take Action To Create and Protect Your Wealth Now:..............................13 What is Q Wealth? ......................................................................................................14
quite straightforward for you to gain the upper hand against plaintiffs - even governments - by choosing in advance a legal forum that is more favorably inclined to protect your private property rights. Later onin this report we will zero in on Nevis, a small Caribbean island which is one of the best jurisdictions for those seeking secure asset protection today. First of all though, lets look at asset protection in more general terms
UNTOUCHABLE WEALTH
By Peter Macfarlane I know that the term Offshore Asset Protection may sound daunting. When do you need a plain old offshore bank account, and when do you need what we call offshore asset protection? What is the difference? Most importantly: How can you make your assets and savings untouchable? These questions and more will be answered in this free report. You might already have thought of opening an offshore bank account. That is a great first step that opens up a range of currency and investment options that you would not previously have had access to. However, theres more to it than that. Most people setting up offshore bank accounts these days will do so not as individuals, but in the name of an entity such as a company, trust or LLC. This affords, at relatively low cost, a far greater degree of privacy and wealth protection than you could normally achieve in your home country, while ensuring full compliance with your local laws if its done properly. This report looks at what we mean by asset protection, why it is important, and how it is really
The Judicial Branchare the lawyers who get involved where disputes arise about laws made by the Legislative branch. Their job is to interpret the sometimes complicated and ambiguous laws. Asset Protection www.QWealthReport.com 3
All three of these branches are supposed to act separately and independently from each other. They have clearly defined roles within the system. In theory, and if we look back in recent history to when life was generally simpler, this system is pretty good. The problem is that in practice, the system is simply no longer working in the way it was designed. That's a nice way of saying 'it's broken.' First, our elected representatives rarely even bother to read the laws they are voting on. Even if they did, they likely wouldn't understand them because the laws presented and proposed to them by the administrative branch are deliberately designed to be confusing. Important provisions slip through unseen, which is just what the bureaucrats want! A good example was the recent HIRE Act in the USA: ostensibly an act to stimulate employment, it also brought in by the back door the most sweeping extra-territorial legislation yet interfering with the financial affairs of foreign banks and Americans doing business overseas. The bureaucrats usually show little inclination to think for themselves, but they tend to take on the role of interpreting the law in a way that was never intended. Modern laws developed by the bureaucrats but rubber-stamped by legislators often encourage this, specifically covering only broad outlines whilst leaving interpretation and implementation to Whitehall or Washington, through bureaucratic diktats such as Statutory Instruments or decrees. The judiciary, meanwhile, has to a large extent been politicized and lost any common sense. In the USA, and other highly litigious countries like the UK, Canada and Australia, we see contingent-fee lawyers who act as predators. Judges and juries play along, in the role of Robin Hoods, apparently determined to redistribute wealth. Did you know that in the USA you are more likely to be sued than you are to have a hospital stay?
sarcastically, in the name of 'investor protection' for example, by insisting that pension funds invest in supposedly triple-A rated US government debt. (If youre American and interested in learning more about this, read the special report Are You Ready for the Coming Obama Retirement Trap? Its available free for download in our Members Area at http://www.QWealthReport.com ) It is for these reasons that any person of even moderate wealth needs to take asset protection into their own hands. It is a fallacy that asset protection is only for the extremely rich or for those in high risk professions like doctors and chiropractors. Conclusion: Having an asset protection strategy is a necessity today for anyone who has a pension plan, anyone who owns a business, and anyone who has a bank or brokerage account with some funds in it.
In reality, the whole idea stinks. It seems designed more than anything else to extract fees and line the lawyers' pockets. If, or should I say when, these asset protection plans are tested in court, the legal fees to defend them are astronomical. At that stage it really doesn't matter any more even if you win, you lose. Fortunately, there is a better way
demand a substantial payment up front, win or lose. For all but the very largest cases, it would never be worthwhile even trying. Sure, you might hear once every few years of a major lawsuit where offshore assets are targeted. But you will never hear about hundreds of thousands of cases that are thought of but never even filed because a good international asset protection structure is already in place. The general public has been programmed by the mainstream media to believe that offshore finance is only for the crooks, money launderers, and the super-rich. This is typically reinforced by wellmeaning onshore lawyers and accountants at home, who to be fair may have little idea about international asset protection. They might tell you it is too risky, too expensive, too bothersome or downright illegal. But that is simply not true. Owning a foreign corporation or LLC, for example, is certainly not illegal. It's business as usual. Can asset protection structures be used for money laundering? Sure but so can most things. Most of the world's money laundering is done in the United States and Europe. Because that's where drug money is made, that's where it has to be washed. And expensive? You can easily set up a watertight offshore asset protection structure, without leaving home, for under $5000 using a reputable and licensed provider. Compare that to what one of those high-flying asset protection lawyers at home will charge you!
what we will call, for purposes of this article, and Asset Protection Jurisdiction or APJ. There are a few of them around the world... places like Panama, Nevis and the Cook Islands. First, APJs wont recognize or enforce foreign civil judgements or administrative orders (such as those from tax authorities). Although of course criminal matters like fraud will be duly investigated in any respectable jurisdiction, civil and tax matters are quite a different issue altogether! Since APJs wont enforce a judgement from any court outside their country, the plaintiff is forced to re-litigate their case within that foreign jurisdiction. This is typically impractical, if not impossible. For example, the statute of limitations is typically much shorter in APJs, normally around two years. Or the APJ may not recognize the plaintiffs underlying liability claim. When it comes to enforcing claims, these countries are debtororiented. They try to protect their clients wealth because wealth protection is their business. These asset protection jurisdictions have deliberately passed special laws - usually drawn up by top flight British or American lawyers who are experts in the field - that allow you to form specially protective asset protection structures and entities. Offshore asset protection trusts, limited liability companies, limited partnerships, foundations, captive insurance companies, international business companies, and multiform foundations are examples. Each entity, in its own way, gives you far more protection than you could obtain through a comparable onshore entity. Asset protection jurisdictions are also great privacy havens. It is not possible to look up details of owners or directors of the offshore entities, so it is almost impossible to prove that the entity is linked to you. For anyone sick of the insipid invasions of privacy that have become commonplace in most major countries, doing your banking through a structure like this can offer a breath of fresh air huge advantages at low cost.
example, might hold a bank account in Panama or Switzerland and a brokerage account in Singapore. These barriers to recovery explain why, according to US research, fewer than 3 out of 100 judgement creditors even attempt to recover offshore assets. And these few cases are usually settled for pennieson-the-pound. Without offshore protection, these creditors would undoubtedly have recovered considerably more. About $10 trillion is now safeguarded in offshore asset protection jurisdictions. These countries feature the best and most attractive privacy, private banking and wealth management services, as well as - most importantly - the best and most powerful asset protection statutes. Note: nothing in this article should be construed as professional advice. There is no substitute for taking qualified expert advice regarding your personal circumstances. Peter Macfarlane is the founder and director of Peter Macfarlane & Associates. His firm has created offshore asset protection vehicles for hundreds of clients. We know of not one who has lost their offshore assets to any litigant. Not only are these individuals more financially secure; but they also enjoy far greater financial privacy, and they sleep sounder at night. As astute international investors, they also find more profitable investments. If you would like to get in contact with Peter, you can do so initially via the Q Wealth offices or via this link: http://www.petermacfarlane.info
What is the standard of proof on alleged fraudulent transfers? There should be a rigorous standard of proof required. Some APJs require that the creditor establish fraud on the balance of probabilities, while others want fraud to be proven beyond a reasonable doubt. This, of course, is a more difficult standard. Will they freeze your assets? You do not want an APJ that will allow your creditor to attach your assets before your creditor obtains judgement.
PROTECTION JURISDICTION
Many offshore jurisdictions can offer you excellent asset protection. So how do you choose? Here are the four most important factors you should look for when considering where to set up an LLC or Asset Protection Trust: Strong asset protection laws and an established policy of enforcing them A predictable and sound legal and political system look for indications that future governments will continue the policy. Financial services must be important to the economy. No taxes on offshore transactions nor restrictions on capital flows Financial privacy and confidentiality simply a must Other factors you should also look at or ask your professional adviser with particular regard to asset protection laws are: What is the statute of limitation? Your creditor should have the shortest time to challenge a transfer. APJ statutes of limitations range from one year in Nevis up to unlimited in some jurisdictions.
SELECTING AN ASSET
clients my firm often uses both the offshore trust and a foreign LLC as its subsidiary. LLCs are also particularly useful for US clients as they are transparent for tax purposes as explained below. The Nevis LLC has gained ground as well as an excellent reputation in recent years as a powerful wealth protection tool. It may give you more protection than the traditional asset protection trust, at a lower cost.
generally written with the small businesses or individual entrepreneur in mind. Thus, the LLC tends to be a more flexible and understandable business entity. While traditional corporations have directors, LLCs have managers. While a manager is typically also a member, under the LLC acts of most jurisdictions, a manager need not be a member. While a corporation generally is operated with two levels of decision-making (board of directors and officers), an LLC can be operated with only one level of decision-making.
The Federation of St Kitts and Nevis is a member of the British Commonwealth, a democracy based upon the British Parliamentary system. The largest expenditure by the government is for education and Nevis has achieved a literacy rate of 97%. The Federation St. Kitts and Nevis has also been consistently judged to be among the world's freest nations by Freedom House. Nevis is exceptionally stable politically. Both political parties are centrist and do not have substantial ideological differences. Both fully support the financial services sector on which the island's economy depends.
Nevis enacted strict confidentiality laws that forbid any disclosure of directors and shareholders of LLC's incorporated there except under court order. Whilst the LLC itself is registered, there is no public record of its members or managers. Furthermore, no annual or other reports by members need to be filed with the Financial Services Department of Nevis. The entity's records may be maintained anywhere in the world. A small island nation in the Leeward Islands that is part of the Federation of St Kitts (St Christopher) and Nevis, Nevis has gained an international reputation for financial privacy and asset protection because of its progressive and debtor-friendly laws. Much of this is due to its progressive LLC laws and other innovations, that differentiate it from the dozens of jurisdictions worldwide that offer traditional IBCs. (St Kitts and Nevis is also known as one only one of two nations in the world currently offering an economic citizenship or second passport program.For further details of second passports, see the Q Wealth Report site: http://www.QWealthReport.com Although US states and many other jurisdictions now have limited liability company statutes, the Nevis LLC incorporates innovative features that you wont find elsewhere. It combines the most protective features of the offshore trust and limited partnership, into one flexible corporate entity. Nevis LLCs do not require minute books, annual director or member meetings, or compliance with other typical corporate formalities. For the best asset protection your LLC should be controlled by a Nevis-based manager. A properly engineered Nevis LLC will delegate all important duties to this managing director, who acts in a similar capacity as a managing member. You contribute your chosen assets to the LLC and become the LLC member. Your rights are then very similar to owning any other business anywhere in the world. As a member you own, but do not manage, the LLC. Management rests with the
director. This transfer of control is crucial to protect the LLC's assets from foreign court orders. As an LLC member you no longer directly own the contributed assets. These assets are instead owned by the LLC. A non-Nevis court cannot order you to repatriate the LLC assets because the manager, not you, controls those assets. Moreover, a Nevis manager is subject to no foreign jurisdiction. If you were sued in the US, for example, your creditor would be limited to a charging order against your LLC interest. This would give your creditor only the right to claim profits or liquidation distributions due you from the LLC. Now this is where it gets interesting, and very different from what would happen if we were talking about shares you owned in a corporation... Because this is an LLC, your creditor cannot seize your membership interest. Nor can your creditor vote or exercise your other membership rights, such as the right to inspect books and records. A US court order to transfer or seize your LLC interest would be ignored by the manager who, under Nevis law, need only recognize a creditors charging order which can only be obtained through the Nevis courts. If the worst should happen, your Nevis manager would withhold profit distribution that could be seized by your charging order creditor. If you own a minority interest, and if withholding distributions would conflict with the interests of the other debtormembers, you can hold your LLC interest via another self-owned Nevis LLC. This would then safely receive your distributed profits. As you have seen with an American LLC or LP, a debtor-member of a Nevis LLC can access funds other than distributions of profits. The charging order would not apply to salaries (e.g. as investment advisor), loans, etc. made to you from the Nevis LLC. Under certain circumstances, Nevis law and tax regulations in the US and other countries, impose
income tax liability on a charging order creditor for LLC profits attributable to the debtor-member. This means your creditor could incur a tax liability at home even if he or she recovered no money or assets from the LLC. This is known as a 'poison pill' and is a major asset protection feature of the Nevis LLC. Typically, a Nevis LLC is setup to be managed by managers not by members. Your operating agreement can require a unanimous vote to change the manager. If, as an example, there were two member parties, they could have managers appointed in such a way that no one manager has more than 50% of the votes. Therefore, it cannot be concluded that there is control. As an example, if 50% of the managers board was being held by each of two parties, neither party can make changes to the company or recently setup arrangements. What if your conveyance? plaintiff alleges fraudulent
If a Nevis LLC member has an existing creditor, the Nevis LLC ordinance specifically permits the member to transfer his or her assets to the LLC without it constituting a fraudulent conveyance if the debtor-members interest is proportionate to the capital contributed. This transfer is classified as a fair value exchange and expressly exempt from the Nevis fraudulent transfer statutes. Under Nevis law a promise of a future investment by an existing or future member can be used to measure this proportionality. A debtor-member can then own a small interest in the LLC subject to the charging order, although this member originally contributed all or most of the LLCs assets. This dilution strategy lets you further discourage a creditor from obtaining a charging order. This is one of several features unique to the Nevis LLC. U.S. limited partnership and LLC laws are unclear on the issue of whether an existing creditor can recover assets that you transfer to an LLC, even when you receive in exchange for your contributed assets, a proportionate share. (Some courts have
ruled that impairing a creditor is sufficient for a transfer to be fraudulent.) On the other hand, in Nevis you will find no such ambiguity or uncertainty. Whatever money you invest in your Nevis LLC will not be a fraudulent transfer. For that reason, the Nevis LLC offers better protection than a foreign trust or, for Americans, domestic limited partnership or LLC. You can legally and ethically invest in the Nevis LLC regardless of your financial situation.
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