Banking single member offshore LLC’s

Today, I’m going to be talking briefly about offshore single member LLCs. What are they used for? How do you form them? What does an agreement look like? I’m going to keep it simple and straightforward right now.

What is a single member LLC?

Offshore single member LLCs are normally disregarded entities. You need to be very careful to make sure that if you want it to be a disregarded entity, you take care in your formation steps and there’s a whole video on that. I encourage you to watch it. Don’t try to do this on your own.

Make sure you have a CPA who really knows the rules helping you. But anyway, an offshore single member LLC properly formed, disregarded properly formed to be disregarded for tax purposes is a hugely helpful tool. Why is it helpful? Because many banks don’t want to do business with trust’s. They also don’t want to do business with U.S. people.

So, if you go to them with a U.S. person settling an offshore asset protection trust, you have a 50-50 chance that they’re going to say fine. I want your deposit and we will not worry about your offshore trust being a U.S. person. We will treat it as a non-U.S. person and that allows the bank to comfortably take you as a client because they don’t want anything to do with the IRS. They don’t want anything to do with the SEC. They don’t want anything to do with the Department of Justice in any way but they do want your money.

So, they invent these unique little caricatures that an offshore asset protection trust is not a U.S. person. We all know that’s false but it let’s them take your money so what do you care.

But a lot of times banks that are formed in jurisdictions that are based upon German law that would be basically the whole civil law world, a lot of those banks don’t know what a trust is and they’re not comfortable with it. So, they don’t want a trust account.

What they’ll often ask you to do is have your offshore asset protection trust form an offshore entity, usually a disregarded single member LLC. It does not cost you any more taxes and it is acceptable to the bank. Therefore, they don’t have to review a trust agreement.

So, I find it very helpful with banking, I want to encourage you, don’t do this on your own. This is something you need a real professional to implement. You do not want to make mistakes. You do not want to file – or worst case fail to file your tax returns disclosing the existence of any offshore accounts et cetera. That is a game you never want to play, you never want to get in the middle of that. You will end up living with Bubba. It’s not worth it. But you may end up wanting an offshore LLC. And I wanted to show you briefly what they look like. I’m going to close this now.

Nevis single member LLC operating agreement explained

The link above is a Nevis single member LLC operating agreement. It’s available for you to download below and I’m not going to go through it in detail. You have it to download. It’s the same as almost every other single member LLC in the world. What I want you to know though is don’t get hosed if you have to form one. These don’t cost tens of thousands or even $2,000 or $3,000 in most cases.

With this type of agreement and a good company representing you, you should expect no more than $1,000, maybe $1,500, they’ll always ask for more but I don’t think you should ever have to pay more for just the simple formation process of an offshore LLC. And Nevis is a great jurisdiction for this. I don’t usually use them for trust work but I love them for a company formation and they’re not very expensive to do business in.

Here we have a simple agreement. You should flip through it. It’s got all the same provisions of any other onshore or offshore LLC. Nevis is special though because they copied the Delaware statute. So, it’s very familiar to people who are used to doing business in Delaware and it works just fine.

I’m not going to talk about it anymore in this particular video except to say, you know, use it, print it, give it to your advisors. It’ll help you. What I did want you to note is that the signature provisions require the offshore trust to sign and this one is actually done for a kinetic asset protection trust because it has a U.S. co-trustee. You may or may not want to do that. You’ll have to watch the videos on kinetic asset protection trust. Usually you will not want to do a kinetic asset protection trust unless you’re represented by somebody who really knows what they’re doing.

Anyway, this is just my introduction letting you have a taste of this, giving you the form and warning you to be careful. Do not get one, ripped off or two, get sloppy. Make sure you report your accounts and make sure you do all the work so that your accountant looks you in the eyes and says okay my friend, here is your disregarded offshore single member LLC. Go to work. Thank you very much.

Posted in ENTITIES (Trusts, FLP's, LLC's and Corporations) and tagged , , .