“A U.S. citizen can start up a foreign corporation as long as it is lawful to do so in the country in which the corporation is established,” Chatzky explains. But, as with offshore trusts, income from the business must still be reported and is taxed in the United States. “The general rule is that if the foreign corporation is actively conducting its business in the country in which the corporation is formed, then the income from that corporation is not taxable in the United States until it is distributed to a U.S. owner, through, for example, dividends,” Chatzky says.

Local attorneys or trust advisors can assist in setting up an IBC quickly and easily. But Bauman warns that IBCs can be cumbersome. “The problem is that the American tax code has a very long and convoluted series of tests on whether or not an offshore corporation is controlled by a U.S. person, what percentage is American owned, whether it’s passive or active income, and so on,” he explains. “If it’s just investment that you want, then use a bank account.”

One offshoot of the IBC is the international limited liability company. LLCs first emerged as legal entities in the United States in the 1970s; some offshore asset refuges subsequently copied their structure. An LLC owner is not liable for any of the company’s debts. This adds an additional layer of protection from creditors on top of those provided by a traditional IBC. An LLC offers more flexibility than a trust. “I still have control of my assets in the foreign jurisdiction, and it appears that if I got sued, then a creditor would literally have to go to [the country where the LLC is registered] to get a judgment against me there,” Jacobs says.