EU asset protection

[adriatique]

Hi everyone,

I have a company in the EU which is currently owned by me personally and I'm looking for the most cost effective way to protect my ownership from creditors, lawsuits, etc. The country in question has civil law.

Based on the data I've seen, most people in my country use a Panama foundation or a Liechtenstein trust (although I've seen a foundation being used as well).

I've also heard that a Cook Islands trust is absolutely the best and most secure asset protection solution in existence.

Please let me know your thoughts on this. Thanks in advance.

 

[Martin Everson]

Who will⁠ be facing creditors/lawsuits you or the company?

 

[adriatique]

Both I guess.

 

[JohnLocke]

Lawsuits because of what? What is the activity of the company?

 

[adriatique]

enterprise software development‌ & real estate holding. I assume it would be in my best interest to split‍ this into two limited companies.

I want to avoid the following:
1) someone suing my⁠ company and getting ahold of my real estate which is on the company books at⁤ the moment
2) #metoo bulls**t (living with someone for 3 years or more counts as⁣ marriage)
3) someone suing me personally and confiscating my company shares

 

[Martin Everson]

Then you want to setup a Dutch STAK Foundation and let it be the shareholder‌ of the company and problem solved.

Read more about it here

Dutch Stak Structure –‍ TBA & Associates

 

[andres33]

@martin, do you consider better‍ a dutch stak than a Liechenstein foundation? Do you know if stak structure need substance?⁠

 

[Martin Everson]

Depends if you want to stick with an EU or non-EU solution.

Every structure needs‌ substance in 2020.

 

[JohnLocke]

What do you guys define as "substance" in 2020? just for all the guys around‌ here who don't know what you mean 😀

 

[Martin Everson]

Basically no letter‍ box company.

In Netherlands for example for a company to be considered tax resident it⁠ would need to meet at least the following. You can't just setup a Netherlands company⁤ while living in i.e France and call the company a Dutch company for tax purposes⁣ if it does not meet the following at the very least. The company without the⁢ following would be tax resident in France and they will inform the other tax authority︀ of this...lol.

• At least 50% of the members of the board of directors, with a︁ right to make decisions, live or factually reside in the Netherlands;
  
• The directors residing in︂ the Netherlands have sufficient knowledge to perform their activities in their capacity as a director︃ of the Dutch company. The company has the adequate personnel (either of its own or︄ from third parties) for the adequate execution and registration of the transactions;
  
• The (most important)︅ board decisions are made in the Netherlands;
  
• The (main) bank account of the Dutch company︆ is in the Netherlands;
  
• The bookkeeping of the Dutch company takes place in the Netherlands;︇
  
• The Dutch company has (at least up to and including the moment of filing the︈ APA/ATR complied with all its tax obligations;
  
• The Dutch company has its registered address in︉ the Netherlands, while the company is, according to its best knowledge, not (also) a resident︊ of another jurisdiction for tax purposes;
  
• The Dutch company’s minimum equity is adequate in relation︋ to the functions performed (taking into account the risks assumed and assets used).
  

 

[John Andrews]

Well those rules don't seem so harsh, especially if the BV is just used as‌ a holding. It's not like you will have employees in the Netherlands

 

[JohnLocke]

Thank you @Martin Everson it's a pleasure to have you here to contribute with your‌ knowledge thu&¤#

 

[Martin Everson]

Your welcome

 

[andres33]

Thank you @Martin

 

[Gediminas]

Hi,

Jurisdiction is important however even more important is how asset holding/protection vehicle is structured.‌ In any case asset protection (from potential creditors) works only you don’t have any claim‍ at the moment you contribute assets to the structure. Otherwise, in most countries such transactions⁠ would be considered as artificial (actio Pauliana claim).

In my opinion, a properly structured irrevocable⁤ discretionary foundation in Liechtenstein is the best asset protection vehicle, but it depends on many⁣ factors. Also, unit-linked life insurance solutions in Switzerland are extremely solid asset protection vehicle (if⁢ you are not US citizen since they try to avoid working with US citizens).

 

[hernanday]

Avoid Liechtenstein, it is a grossly corrupt jurisdiction probably the worse one, run by a dictatorship︀ and the courts have defended trustees who stole from the beneficiaries of a billionaire and︁ locked them out of their own money, your assets are not safe there.

 

[Jerry1911]

What kind of rights does the founder usually‍ reserve when it comes to such foundations?