It's only prudent to take move some of your wealth outside your home country.
By doing so, you can reduce the vulnerability of that wealth to lawsuits and other legal threats. You may also obtain greater privacy, access to investment opportunities not available in your own country, along with other benefits.
It's important, though, to choose the right offshore jurisdiction. Some of the jurisdictions I recommend include Austria, Switzerland, and Nevis. All these countries have a substantial legal framework for protecting wealth.
More importantly, this legal framework is consistent with the way things actually operate in the country. The laws don't say one thing, while the government actually pursues a very different course.
Unfortunately, the same can't be said for some competing jurisdictions. A case in point is Antigua, a former U.K. colony that's been independent since 1981.
Officially known as Antigua & Barbuda, the nation comprises two separate islands forming one country. Located in the Eastern Caribbean, Antigua has struggled since independence to achieve financial self-sufficiency.
Tourism is by far the largest source of revenue, but like many of its Caribbean neighbors, Antigua has developed itself into an offshore center. Recently, the lower chamber of the Antiguan Parliament enacted enabling or revised legislation for offshore trusts, offshore foundations, and offshore LLCs. The laws are said to create "the world's most secure and confidential environment for international asset protection, wealth preservation and tax minimization."
That may well be the case. But unfortunately, Antigua's reputation as an asset haven doesn't live up to its "black letter law."
In a previous blog entry, I described how the government of Antigua confiscated the Half Moon Bay Resort from its rightful owners, without paying compensation. I also described how in 2001, the government tried to seize US$76 million in assets recovered from the liquidation of Eurofed Bank, Ltd. This was despite the fact that the vast majority of these assets belonged to legitimate depositors.
Enacting stringent asset protection and privacy laws means little if a culture of plunder permeates the jurisdiction where they're passed. Unfortunately, that appears to be the situation in Antigua. Until the government demonstrates that it intends to protect the rights of property owners, how can anyone take Antigua's asset protection laws seriously?
Copyright © 2007 by Mark Nestmann, LL.M.
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