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Anguilla asset protection devices

By Eric Rein

Anguilla is a British Overseas Territory in the Eastern Carribbean. Anguilla's financial sector is well developed and its current trust and corporate laws were launched in 1994. Anguilla's legal system and trust law is based on that of England. Under The Trusts Act, a trust exists where a trustee holds property for the benefit of the beneficiary and the  settlor may also be a trustee, beneficiary or protector of the trust.

Other legal entities commonly used include International Business Companies (IBC). An IBC has the power to undertake business in or outside Anguilla, but is prohibited from carrying on business with residents of Anguilla, owning real property in Anguilla or carrying on insurance or trust business.

An IBC can have nominee shareholders and details of the directors or shareholders are not required to be made public. Another common entitiy is an Anguilla Business Company (ABC), which can be used for business in Anguilla or offshore.

If used offshore, an ABC is exempt form record-keeping. An ABC must, however, file an annual return containing shareholder and director details. ABCs are exempt from taxation, except if it owns land in Anguilla.

Lastly, Limited Liabilty Companies (LLC) are similar to those established in Delaware. The differences are that the LLC agreement need not be publicly filed, it cannot carry on banking, insurance or trust business and is exempt from taxation.

During 2004, new financial services legislation included a new insurance law and a new protected cell companies law. The Insurance Act 2004 provided for the licensing and regulation of both insurers doing domestic and "foreign insurance business".

The procedures for procuring a license are quick. The Protected Cell Companies Act 2004 (available in PDF format here) allows for a corporate entity to hold assets in one or more segregated cells. Therefore, a segregated cell is only available to satisfy creditors of that cell and creditors of other cells have no claim.

This kind of company was originally devised for the insurance and mutual fund industries to facilitate "captive insurers" and "umbrella funds". New diverse uses are now emerging and this will be a popular means of "protecting assets".

Full post as published by International Asset Recovery Law Blog on April 19, 2007 (boomark / email).