Portfolio Investment

Offshore companies are frequently used by private investors to consolidate ownership of portfolio investments. These may be either diverse investments or units in one particular fund. The main advantages of using offshore companies in this context are tax neutrality and confidentiality.

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In the ownership of portfolio investments or investment in a particular fund, offshore companies can be "stand-alone" ownership vehicles or corporate trustees, or corporate partners of partnerships or limited partnerships (e.g. collective investment schemes) 

The advantages of such arrangements are:


  • Legal confidentiality.
  • Administrative convenience.
  • Potential protection from inheritance taxation.
  • Regulation (the principal offshore jurisdictions are very strictly and capably regulated in favour of investors).

The offshore vehicle most commonly used for such private arrangements is the British Virgin Islands Business Company (BVI company) because of the "light touch" regulation and annual administrative requirements applicable to such companies.

Depending on the country of residence and domicile of the private investor and the legal situs of the investments the use of a BVI company may be sufficient to provide IHT protection, and shelter from other forms of taxation e.g. income taxation.

However for many clients, further offshore planning will often be required, in the form of an offshore trust or foundation to own the shares of the offshore company.





Depending on the location of the ultimate beneficial owner, an offshore trust or foundation can be set up to own the BVI or other offshore company's shares, thus separating ownership and control of the BVI company's shares from the legal and taxable estate of the private investor.

The private investor will become a potential beneficiary of the trust or foundation but this is not equivalent to outright legal ownership. Therefore the use of a foundation or trust can provide significant succession planning and tax benefits.

If you want advice on the best jurisdiction for your company formation or initial guidance on your case, you can speak to one of our experts. One of our Corporate & Trust Planning Consultants will be in touch with you shortly to give you all the information you need.

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