Posted by offshorepedia on Feb 22, 2011 in Dictionary | 0 comments
A Letter of Wishes is a document that has no ‘real’ legal status. A Letter of Wishes is often used in connection with offshore trusts in order to transmit the wishes of the creator or the alleged owner of the trust to the trustee. It is a separate document and not a part of the trust instrument. Letters of wishes are generally used by the beneficial owner of the trust assets to retain some control over the trust assets. A Letter of Wishes enables a trustee to exercise his or her discretion having in mind the wishes of the grantor. The trustee may consider the letter but is not bound or otherwise accountable by its terms. In reality the letter of wishes will be honored as if it were a binding legal document.
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Posted by offshorepedia on Feb 22, 2011 in Dictionary | 0 comments
A PIC, or Personal Investment Corporation, is a term used in the banking industry to refer to an International Business Company (IBC). PICs are generally created for the private bank’s client in order to hold the client’s investment assets.
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Posted by offshorepedia on Feb 22, 2011 in Dictionary | 0 comments
Beneficial Ownership refers to the true owner of an offshore company or any other entity or asset, or transaction no matter what is stated in documents, public records etc. The beneficial owner is the one that receives or has the right to receive proceeds or other advantages as a result of the ownership. It is common practice when creating offshore solutions to interpose entities, individuals, or both as stated owners. The beneficial or true owner is contractually acknowledged in side agreements, statements or by other devises.
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Posted by offshorepedia on Feb 21, 2011 in Dictionary | 0 comments
Tax evasion is the general term for efforts to not pay taxes by illegal means. This in contrast to the term tax avoidance which is used to describe actions that are within the law in order to minimize or avoid taxes. Tax evasion is in most jurisdictions regarded as a criminal behavior.
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Posted by offshorepedia on Feb 21, 2011 in Dictionary | 0 comments
Tax avoidance is the use of the tax regime to one’s own advantage within the rules of the law, to reduce the amount of tax that is payable. This is contrast to tax evasion which is a term used in order to describe a behavior to not pay taxes by illegal means.
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Posted by offshorepedia on Feb 21, 2011 in Dictionary | 0 comments
The term tax haven is not clearly defined and there is some discussion as to how the term should be defined. For being regarding as a tax haven it is not sufficient that a jurisdiction offers low taxes. The OECD has stated that the following factors should be decisive if a jurisdiction should be regarded as a tax haven:
- No or nominal taxes.
- Lack of transparency.
- Laws or administrative practices that prevent the effective exchange of information for tax purposes with other governments on taxpayers benefiting from the no or nominal taxation.
- Absence of a requirement that the activity be substantial.
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