Managing Offshore Investments Through an Asset Manager

A useful choice for offshore investments is an asset manager located in an offshore jurisdiction. The need for such an individual or company can arise as a result of the successful choice of offshore vehicles in tax advantaged jurisdictions. Individuals and corporations commonly use offshore banking in one jurisdiction, an offshore company in another, and a holding vehicle such as an offshore trust or a Panama Private Interest Foundation in a third. An individual may, in fact, live in a country separate from any of these. An individual may choose to set up an offshore trust or foundation for the benefit of his or her heirs. Upon his death the appropriate paperwork will be accomplished and the designated heirs will become beneficiaries of the trust or foundation. However, these individuals will probably still live in their country of birth or, perhaps, another offshore location. Then who manages the assets?

This is a common situation in many countries where an individual sets up a trust for children and grand children who may have no practical experience in managing wealth and investing for its growth. Commonly a bank will act as a trustee in such situations. When the individual has chosen an offshore asset protection and privacy solution his wishes will typically not be to return the assets to a bank in his country of origin.

Here is where an offshore asset manager comes in. Such an individual or company may well be an offshore bank or an offshore business specifically designed to protect and grow offshore wealth. An offshore asset manager will be appointed by a written contract between the person directing the investment program an international business corporation, exempt company, offshore trust, or offshore foundation.

The terms of the agreement with the asset manager are flexible and totally dependent upon a negotiated agreement. Payments can be based upon performance, commissions for each action taken, or a set fee based upon a percentage of assets managed.

An offshore asset manager may be associated with an offshore bank where a trust has an account for one of its international business corporations. As such, all paperwork will likely be kept “in house.” This is typically the wish of anyone who has gone to the trouble to set up a comprehensive offshore solution for asset protection and privacy. Integrating the asset manager arm of the offshore solution into the whole is more likely not to disrupt the original purpose than if an outside investment management solution is sought.

There are many offshore jurisdictions offering banking, company incorporation, foundations, and trusts. Many of these will also offer trustworthy and competent investment management as well. The best time to include an investment manager or asset manager will be when the entire offshore solution is envisioned. When the principal is alive he or she can certainly be directly involved in investments. However, having an asset manager in place before the individual dies or becomes disabled by age or infirmity is a good offshore solution.

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