Mr. Gillian Luciano owns two companies in UK, which is also his country of residency. He also owns two real estate properties which consist of a Real Estate property in UK, worth £2.5 Million and a property in Italy, worth £ 2.0 Million.
A few years ago, Mr. Luciano had taken several personal loans. Lately, due to economic crisis and market upheavals, the operational results of the two business entities were worse than expected and for this reason he has not been able to meet his loan repayment obligations and is currently at risk of defaulting. Also, due to the property market downturn, selling one of the properties is not a conducive solution.
Mr. Luciano, owing to these loan defaults and business losses, is currently at risk of facing enforcement proceedings. Consequently it is likely that he would have to forgo all his property; which may have an effect on the activities of his other businesses also.
Mr. Luciano needs to protect his assets and his businesses from enforcement procedures. When the property market revives he should be able to sell one of the properties at the correct market price and thus cover all his financing obligations.
In this situation, the structure illustrated below could be recommended to Mr. Luciano as an efficient offshore structure (with minimum risk and costs) to protect his wealth against litigation and claims.
Under this structure the properties currently owned in the name of Mr. Luciano are transferred to individual offshore companies. An offshore company will be set up for the two local companies, in order to reduce or eliminate the tax and protect it from any possible litigation. An individual offshore company for each of his properties will be set up in order to protect assets and to optimize tax.
On top of these offshore companies, this structure will also have an Offshore Foundation. Offshore Foundations are key tax exempt asset protection structures. Foundation can be used as offshore companies to maximize privacy, business confidentiality and to protect assets, accumulate and manage wealth.
When the real estate market recovers Mr. Luciano could sell one of the properties at a corrected market price. Under this proposed structure, he will be selling one of the offshore companies owning the property, thus optimizing all transaction tax costs and cover all his debt.
Also having a Foundation as the owner of an Offshore Company enables the profits of the Company to be regularly transferred to the Foundation; however should a bankruptcy of the corporation occur, it would not affect the Foundation at all.
This structure will provide Mr. Luciano the following benefits:
This structure will not give Mr. Luciano direct ownership of the offshore companies; thus it provides him with an extra layer of protection and make him less vulnerable to liabilities.
Mr. Luciano will be the Protector of the Foundation. The Foundation constitutes a separate legal estate from that of the Founder and its assets are protected from future claims against him.
Also Mr. Luciano will be the sole beneficial owner of the Foundation and thus can legally transfer all assets to his family or another third party, appointing them as secondary beneficiaries.