The choice of a place to set up any company should be conscious and carefully analyzed. If the co-founder of the company makes a mistake, he will miss out on profits and his project will take longer to pay off. Each form of ownership is created to solve certain business problems. If co-founders are interested in the issue of asset preservation, there is no better option than a trust. Luxembourg is one of the most popular places to create one.
Creating trust in Luxembourg is a bit more complicated than in other regions. However, it is a great place to register it. This country has many privileges, and its favorable location in Europe is one of the advantages of opening this type of corporation.
Why open a trust in Luxembourg
Before you open a trust company in Luxembourg, you should carefully study the advantages of working in this particular state. There are many dividends for owners of such companies that are not always available in other regions. In addition to the extremely convenient location, also many highlights:
- the high reputation of local officials and the transparency of the work of business structures;
- favorable tax system;
- stability of the legal framework;
- many companies that provide trustee services for trusts.
As you can see, it is possible and necessary to work in this country. The main thing is to understand the process of creating trusts and how they function on the territory of this country.
Procedure for creating a trust
The incorporation of a trust company in Luxembourg was created by signing a special arrangement between the settlor and the trustee. According to this arrangement, all acquisitions of the trust are transferred into the possession of the settlor, and he can not only own but also manage them. At the same time, a third party will receive dividends from the income, which the co-founder also specifies in the agreement.
In addition, the contract stipulates the prerequisites underneath which the manager must give all or part of the acquisitions to the beneficiary. Luxembourg has a special law on trusts, which has been in force for 20 years. It specifies all the rights and obligations of the parties, as well as the requirements for each of them. For example, a trustee can only be a legal entity that has been approved to provide such services by the local regulator.
Requirements for co-founders
Registration of a trust in Luxembourg is only possible if the corporation fully complies with the requirements of the local regulator. In particular, co-founders need to:
- define in advance the founders, managers, and inheritors;
- set out the terms of the trust in special docs to be signed by the co-founder and the trustee. The trust document should contain the data of the signatories, the purpose of creating such a legal entity, etc. It is especially important to spell out the rights and obligations of each party regarding the regulation and use of assets;
- spell out the right of assignment of assets, specifying the means of payment (money, securities, real estate, or other types of property). All of them must be identifiable and can be transferred to trustees for further preservation;
- specify in the doc the term of the trust (according to local law, such agreements can be drawn up to 100 years).
In addition to the above requirements, it is a good idea to hire qualified accountants for the trust to help evaluate the actions of the trustees to ensure the effective structure of the legal entity.
As you can see, setting up a trust is much easier than incorporating a company. However, this does not mean that everyone who tries to set up a trust on their own is successful the first time around
Who will help with the enrollment
Trusts in Luxembourg are practically never refused. However, quite often there are mistakes in the contracts, which were made by the co-founders of such a legal entity when trying to execute the documents on their own. Therefore, such work is most properly left to lawyers.
Our company is ready to help in formalizing a trust company. Our employees are a team of true professionals, where everyone knows his profile, but is ready to back up colleagues at any time. We will be able to check the draft of your agreement, spot any errors in it and promptly correct them before you sign it. With our assistance, you will be able to assemble a trust the first time and the trustee will be able to deal with the issue of accumulating funds for the beneficiary more fast.
If you ought any legal-assistance in opening a trust, you can reach our staff in any convenient way and we will be able to help you solve such problems faster.