Creating offshore trusts and offshore funds in Gibraltar

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The following describes what constitutes trust in Gibraltar and a foundation in Gibraltar, as well as what advantages they provide to the trust manager, the founder of the foundation and the beneficiary. Together we will explore how to create trust and fund in Gibraltar and what requirements must be met in order to establish an offshore trust or fund.

Creating offshore trusts in Gibraltar

The information below contains a definition of a trust in Gibraltar and explains why people want to create a trust here. It also analyzes the clear advantages of creating a trust in the jurisdiction of Gibraltar and describes how the Gibraltar Trust operates.

The legal structure of the Gibraltar Trust includes the obligatory presence of the “Founder of trust management”, which transfers or allocates assets. The “Trustee” must be an adult person in his right mind, responsible for managing the assets in the interests of the person or group of persons referred to as the “Beneficiaries”. The Guarantor monitors the activities of the trust, ensuring that it complies with the provisions of the Trust Declaration and that the trust is managed in a satisfactory manner.

When deciding which country to set up your offshore trust, it is necessary that you fully understand the specific benefits offered to you in that country, and how well these advantages correspond to your specific needs.

A strategically advantageous geographical position becomes even more effective if the country participates in international trade – this is most attractive for those who want to establish a fund in this country.

Why create an offshore trust in Gibraltar?

Gibraltar joined the EU in 1973 and is the jurisdiction of a common law court. The legal provisions for the creation and management of trusts are based on the UK Trustee Governors Act of 1893. Unlike other jurisdictions, Gibraltar built its legal framework on the basis of English law (hence the trusts), therefore it is better to understand how to meet the needs of the founder of trust management.

In 1990, a new law was adopted in Gibraltar aimed at improving the protection of trusts and promoting the development of new type of trusts. Despite the fact that Gibraltar has always strictly fulfilled its obligations in connection with the creation of offshore trusts, this law even more contributed to the growth of the number of trusts in the country. In addition, Gibraltar has its own legal system, similar to the United Kingdom’s law system (the Gibraltar Companies Act is based on the Companies Act in England of 1929) and provides for zero taxation, which attracts potential founders.

Purpose of an offshore trust in Gibraltar

– withdrawal of assets intended for the benefit of another person, registering them in such a way that the founder’s identity remains unknown

– protection of personal assets and wealth

– property inheritance and management agreements for future generations

– charity

– protection of assets from political and financial instability in their own country.

Types of offshore trusts in Gibraltar

In Gibraltar, there are two types of offshore trusts: trusts, which generate interest income from ownership and discretionary trusts. Interest income Gibraltar trusts are used when the beneficiary is entitled to income from the trust, and discretionary trust is a trust in which capital gains and income are accumulated over a long period of time. Discretionary trusts are more widely recommended by offshore business consultants.

Although trusts are usually established by wealthy people in order to manage their assets and ensure future generations, a company can also transfer its assets to a trust, acting for caution.

Existing offshore trusts:

– Trusts for asset protection

– Trusts for employees

– Pension Trusts.

In Gibraltar, asset protection trusts are widely known as the best form of protection for your wealth, while employee benefit trusts are used to reduce taxes paid by employees or contractors working for or for your company. Finally, pension trusts are created in the interests of workers who have already retired.

The advantages of offshore trusts in Gibraltar

The legal infrastructure of Gibraltar is built in such a way that it is as convenient as possible to create trusts. Current provisions for the protection of trusts and the elimination of asset taxation make Gibraltar an attractive place to create offshore trusts.

– Avoidance of inheritance tax

– Avoidance of capital gains tax

– No need to register with a government agency

– All trusts in Gibraltar are 100% private

– Gibraltar has the excellent financial and political infrastructure.

– The attractive fiscal regime, and

– Lack of currency regulation.

Creating an offshore fund in Gibraltar

The creation of a fund in Gibraltar is similar to the creation of a trust, but it requires the following infrastructure: the “founder”, the “guarantor”, the “beneficiary” and the “council members”. The trustee in the fund is missing.

The foundation is recognized in jurisdictions with both civil law and common law, which makes the foundation very accessible for the creation of an organization.

After creating the fund in Gibraltar, it acquires the rights of a new legal entity, and the fund becomes the owner of the fund’s assets. However, there is no requirement for trustees, participants or shareholders in the fund.

Benefits of funds in Gibraltar

– Benefits in avoiding double capital gains taxation

– Efficient and structured management system for the purpose of state distribution and management

– Reduced Inheritance Tax

– Payment of reasonable compensation for the services you provide to the fund

– Contributions to the fund are not taxable.

Purpose of offshore funds in Gibraltar

– Personal status protection

– inheritance planning

– Asset Tax Planning

– Avoidance of the right to an obligatory share in the hereditary mass

– High level of corporate control

– Employee participation in profits, pension schemes, and pension funds

– Charity

– The ability of organizations to assist employees in profit, pension schemes, options, and insurance.