This document discusses offshore business structures and strategies to minimize taxes. It presents several multi-jurisdictional structures that employ offshore companies and trusts in places like the British Virgin Islands, Belize, Barbados, Luxembourg, Cyprus and Canada to benefit from low or no taxes and confidentiality. It also highlights strategies to avoid anti-avoidance legislation and maximize benefits from international tax treaties.

1. CITITRUST
INTERNATIONAL INC.
The New Offshore Business Model
INTAX Forum – Moscow – September 2013

3. Little or no tax
information
exchange
British Virgin
Islands
Company +
Swiss bank
account
British Virgin
Islands/Belize
Company
+Russia
+Cyprus
Little to no
international
co-operation
The “pure”
offshore
approach

4. Swiss Banking SecrecyAutomatic Information Exchange
The OECD
Multilateral Convention for Automatic Exchange
The United States
Foreign Account Tax Compliance Act
The British Virgin IslandsCyprus
Austria and Luxembourg EU
The New Savings Directive

5. New transfer
pricing rules
Introduction of
restrictions into the
Luxembourg,
Cyprus and
Netherlands
treaties among
others
New thin
capitalization
pricing rules

6. The implications of non-compliance
European Union legislation
Money laundering legislation

7.  Increased real estate taxes
 Increased information exchange
 Considered in the UK Non-domicile
 Has implemented FATCA
 Reintroduced the inheritance tax
 Increased compliance requirements
 Banking secrecy
 The Switzerland-Russia treaty
 The Cyprus-Russia treaty

9. Avoiding triggering anti-avoidance legislationEmploying tax treaty positionsConfidentialityLegally compliant offshore structuresThe new Corporate Services Delivery Mechanism

10. Cost-benefit
considerations
Standing up to
reviews from tax
authorities
Avoiding anti-
avoidance
legislation
Maximising
treaties to
reduce taxes

11. Confidentiality
- do you really
have it?
Legal
Professional
Privilege (LPP)
Belize Offshore Trusts
can be used to provide
confidentiality

12.  Low tax jurisdictions
 Both countries have double tax
treaties
 Both countries host Canadian
banks – Canadian Imperial Bank
of Commerce (CIBC) & Royal
Bank of Canada (RBC)
 Westminster style constitutions
 Canadian and English common
law persuasive

13. Luxembourg withholding tax on dividend payments to the British
Virgin Islands and other offshore companies: 15%
Under the Luxembourg Barbados Double Tax Treaty withholding
taxes paid to Barbados company in Luxembourg are: 0%
Dividends - 0%
Interest – Withholding Tax 0%
Royalties – Withholding Tax 0%

15.  A Belize International Business
Company (IBC) forms a Barbados
Company
 The Barbados company acquires shares
in a Luxembourg company
Belize IBC
Barbados Company
Luxembourg Company
Russia
Luxembourg
 Full dividends and capital gains
exemption under Luxembourg
participation exemption regime
 No Withholding Tax on dividend
payments to Barbados from
Luxembourg
Barbados
 Full dividends exemption under
Barbados participation
exemption regime
 Exemption of capital gains on
the sale of shares of Lux Co.
 No WHT on the dividend
payments to Belize IBC.
The Model

16. 5
Non-US
Beneficiary
US Domestic Trust
Belize Offshore
Variable Insurance
Belize IBCs
US
Beneficiary
 A US company forms a tax compliant US
domestic trust
 The trust acquires Belize offshore life
insurance
 The domestic US trust is US tax
compliant
 The structure works for US and
non- US citizens
 The US domestic trust has
access to US double tax
treaties
 Asset protection of US courts
 The wealth under the offshore
insurance contract can be held
using a zero tax vehicle like
Belize IBC
 Wealth is accumulated and
protected in a zero tax
environment
 Tax-free distributions possible
The Model

17. 5
 Belize IBC is zero tax vehicle
 Barbados IBC is a low taxed vehicle
 Barbados IBC is used to access the
Luxembourg-Barbados treaty
 Luxembourg company is used to access
the Luxembourg-Russia treaty
The Model
UK Company
Luxembourg Company
Barbados Branch
Operating Company
 The Mandatorily
Redeemable Preference
Shares (MRPS), if properly
drafted, is treated as debt
for Luxembourg tax
purposes and treated as
equity in Barbados.
 Dividends are treated as
interest expense
 Dividends are tax-free in a
Barbados IBC
 Treaty benefits from Russia
to Luxembourg apply

18.  A Luxembourg company forms a branch
in Barbados
 The UK company contributes cash or
receivables to Luxembourg company for
shares which allocates such assets to
the Barbados branch
 Barbados branch lends to the group of
companies
UK Company
Luxembourg Company
Barbados Branch
Operating Company
 Double Taxation Treaty
Barbados/Luxembourg exempts
income attributable to the
Barbados branch.
 In addition, assets attributable
to the Barbados branch are
exempt from net worth tax in
Luxembourg
 Secured by an advance
clearance letter
 Interest income will be taxed in
Barbados branch when paid. No
taxation if interest income is
accrued
The Model

19. 5
 A Russia company forms a Commercial
Trust in Canada
 The Barbados branch then manages the
assets of the Canadian Trust
Canadian Trust
Barbados Branch
Assets
Russian
Company
Russian
Company
 Double Taxation Treaty
Barbados/Canada exempts
income attributable to the
Barbados branch
 In addition, assets attributable
to the Barbados branch are
exempt from tax in Canada
 Canadian banks in Barbados are
used to custody assets in
Canada
 There is no capital gains tax in
Barbados
 Assets are protected under
Canadian law
The Model

21. CITITRUST
INTERNATIOAL INC.
Belize City, Belize
+(501) 223 3738
joy@cititrustintl.biz
www.cititrust.biz