An offshore corporation - like a domestic corporation
- has a distinct legal personality. It can sue and be
sued in its own name, and the shareholders' personal
assets are separate and distinct from the assets of
the company. It is, in effect, an artificial person
that protects the principals behind the company through
the concept of limited liability.
The corporation is often used to hold bank accounts
and credit cards, purchase goods and services, enter
into contracts, hold property, trade securities, and
perform any other financial transaction in its own name
rather than through the name of its owners. Thus, the
principle benefit of an offshore corporation is similar
to that of an onshore corporation, that being a layer
of legal separation between a company, the people behind
it and the business it conducts.
When used in conjunction with an offshore trust, corporations
add a layer of confidentiality, control and versatility
to an overall financial strategy. The offshore corporation
acts as a conduit through which trust assets may be
invested and/or distributed. Remember,
the trust owns all the shares in the company. Trust
assets may flow to the bank, brokerage and insurance accounts
held by the company, and the client may “manage” those
assets by virtue of his position as Corporate Manager.
The company also serves to add another layer of confidentiality
to the structure.