Planting Business Flags

Structuring your business using a multiple flags strategy requires careful consideration of many different factors. Obviously a fundamental choice needs to made as to what jurisdiction you want your business structured in, but equally important is the type of off shore entity (or entities) you chose for your business structure.

Factors to consider in chosing a jurisdiction to structure your business in:

• Strong Asset protection laws and an established policy of enforcing them
• What is the statute of limitation for fraudulent conveyance ?
• What is the standard of proof on alleged fraudulent transfers ?
• Will they allow a creditor to attach your assets before obtaining a judgement ?
• Tax laws
• It makes sense to consider structuring your business in a low-tax country such as
  Hong Kong, Singapore or Bulgaria . . . or even a no-tax jurisdiction such as Panama, BVI or Labuan.
• Singapore really deserves special consideration, because there is so much transparency there; and even with its flat corporate tax of 17.5% (which is relatively low), it is still possible to avoid taxes entirely by banking in another jurisdiction such as Hong Kong (as long as you don't repatriate the funds back to Singapore).
• Secrecy laws
• Do they have TIEA (tax information exchange agreements)
• Do they have a MLAT (Mutual Legal Assistance Treaty)

• Type of Entities available
• Do they allow anonymous bearer share corporations ?
  (an anonymous owner gets to keep all of the share certificates and this control the corporation)
• Do they require a resident shareholder/members ? / Do they allow a nominee director ?
• What are the accounting, auditing, reporting or tax filing requiremnts ?

• Does it have a predictable and sound legal and political system
• Is it likely that future governments will continue the policy ?
• Are financial services important to their economy ?

Factors to consider in chosing an Off Shore Entity for your business

We will examine the following five types of off-shore entities: IBC's, LLC's, IAPT's, PIF's and PPLI's.

• IBC (International Business Corporation)

• An IBC is a legal entity incorporated in a tax haven, which is free from all local taxes (except small fixed annual fees). Typically the IBC cannot conduct business in the country of incorporation. IBC's most commonly use offshore banking to conduct international trade and investment activities.
• In most cases, an IBC's assets are extremely private. In some countries, the asset protection provisions of IBC's, are so strong that IBC ownership records are NOT available in ANY public record . . . furthermore, in some countries, it is a crime for a banker to reveal your association with a bank account to ANY individual outside of the bank. One of the strongest IBC asset protection laws found is on the Island of Nevis.
• Setting up an IBC is somewhat complex and typically requires professional help.
• There are many typess of IBC's. We will examine the following common variations:
  • Holding Companies
  A holding company by its very definition is a company whose business it is to hold shares in and to exercise management and control of other companies. Its uses include the collection of dividends from a subsidiary, which may in turn be reinvested, free of tax. In the event of the sale of the shares in the subsidiary to a third party, profits are maximized there being no taxes payable on such sale.
  • Investment Companies
  The business of this kind of Company is to invest in securities on behalf of its owners. Its major asset is usually a securities portfolio from which it will earn profits from trading and dividends in a low tax or no tax jurisdiction.
  • Import / Export Companies
  These types of companies are ideal for price transfering strategies. There are several variations to this type of arrangement, but as an example consider an onshore company, which would normally buy inventory from a wholesaler directly, but now instead the goods are first purchased by the offshore company, which in turn sells the goods to the onshore company at a premium for the service provided. The majority of the profit therefore remains in the offshore tax-free company, while the onshore company accrues loss chargeable income and may even become entitled to special tax concessions and/or government subsidies.
  • Professional Service Companies
  These companies allow professionals to secure their income offshore as professional fees are paid directly into the offshore corporation, which company will in turn pay the professional an agreed sum for tax reporting purposes.
  • Intellectual Property Holding Companies
  The use of this type of company is ideal for a developer or purchaser of intellectual property. The owner of a design or other intellectual property when sold naturally shall be entitled to royalties upon its reproduction. Those rights should be sold to the offshore company, which will in turn license onshore companies to distribute the same. The offshore company may then receive the royalties from the onshore companies direct and the moneys once paid are tax-free.
  • Finance Companies
  A common use of an offshore holding company is to fund a secondary company through loans in circumstances where the secondary company is located in a country that allows for the deduction of interest on such loans as a business expense. This strategy enables a group of companies to in effect lend money to itself and collect interest income in a zero or low tax jurisdiction while at the same time allowing the onshore company to subsidize interest earnings.

• Offshore LLC's

For many situations, an offshore LLC's is a good choice.To understand how an Offshore LLC operates, it is first necessary to understand LLC's in general.

An LLC (limited Liability Company) is a hybrid business entity having characteristics of both a corporation and a partnership (or sole proprietorship when there is just one owner).

The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation.

Because an LLC is neither a partnership nor a corporation, it's owners are called "members" rather than partners or shareholders. The members draw up an operating agreement (similar to a partnership agreement) by which they run the LLC. Unlike a corporation, an LLC can be made up of as many members as the company wishes to have and it does not require bylaws, meetings, or the recording of minutes.

In corporations, shareholders may transfer stock or their interest in ownership, while members of an LLC cannot. Transferring one's interest in the company may be dependent on the approval of other members. In addition, if a member of an LLC passes away, decides to leave, or goes bankrupt, the LLC is usually dissolved, while corporations are not limited by such restrictions.

• A United States LLC is not a regular tax-free company if the business is operating in the U.S.,
  . . . for full tax-free advantages the LLC has to be registered in an Offshore Financial Center.
• LLC's must file annual tax returns. Its members are individually liable to tax on their share of the profits if earned within the U.S. or if a member is a U.S. citizen or resident.
• If a U.S. registered LLC is owned and operated outside of the United States by U.S. non-resident aliens and have more than one member; there is no tax liability on its members.
• While an IBC cannot conduct business in the country of incorporation, there is no such restriction on an LLC.
• For U.S. citizens or residents, an offshore LLC provides a better vehicle than an IBC due to improved U.S. tax compliance.

• Offshore (international) Asset Protection Trusts (IAPT)

An offshore (international) asset protection trust is another way to protect one's assets. In order to understand how an IAPT works, one must first understand the overall concept of a trust.

A Trust is a legal entity that can hold title to property for the benefit of one or more other persons or entities. In other words . . . it is a means of separating legal and beneficial ownership of property. Trusts have traditionally been used as a method of sheltering or limiting the exposure of assets to taxes and other legal claims as well as for specifying the use of those assets in ways not otherwise recognized under the law.

• A basic Trust structure consists of three entities:
1. the Creator (also known as the Grantor, Trustor, Donor, or Settlor)
• the person who sets up the trust
2. the Trustee
• - the person who acts as custodian
• controls the Trust and is responsible for managing the Trust assets
• holds the legal title, but not the full title, to the property that is in the Trust.
• can only use the assets and proceeds from the Trust property for the benefit of the people the Trust is set up to benefit, never for his or her own profit.
3. the Beneficiary
• the person or persons who are intended to benefit from the Trust
• owns what is called the equitable title to the property held by the Trust.
• This means that they have a right to have the assets used for their benefit in the way directed by the Trust provisions
• The property that is transferred to a Trust becomes the Trust estate (also called the Trust corpus, Trust res, or Trust principal). A Trust estate consists of all of the property, rights, and obligations that are transferred to the Trust.
• The Trust estate is managed in accordance with the terms and conditions of the document creating the Trust, which is called the Trust agreement or declaration of Trust. This document sets out the purpose of the Trust, the identities and powers of the Trustees, the names of the Beneficiaries, how the Trust assets should be managed, and how they should be distributed to Beneficiaries.
• Trusts can be either living (inter vivos) or testamentary:
• A living trust is set up during the Grantor's lifetime, coming into being and functioning while the Grantor is still alive.
• A testamentary trust is set up by a Will and does not come into being or begin to function until after the death of the Grantor.
• Trusts can be either revocable or irrevocable:
• A revocable Trust can be revoked and the Grantor can reclaim the Trust assets.
• An irrevocable Trust can NOT be revoked and the Grantor can NOT reclaim Trust assets

• Trusts are also classified by their many various functions. Some of the most common types include:
  A/B Trusts, Asset Protection Trusts, By-Pass Trusts, Credit Shelter Trusts, Charitable Trusts, Constructive Trusts, Crummey Trusts, Dynasty Trusts, Generation Skipping Trusts, Grantor Trusts, Life Insurance Trusts, Resulting Trusts and Totten Trusts.
• We will be examining Asset Protection Trusts, Grantor Trusts and Life Insurance Trusts
• Asset Protection Trusts - Trusts designed to protect assets from the claims of creditors

  There are two types of Asset Protection Trusts:

  1. Domestic Asset Protection Trust (aka an "Onshore Trust" or "DAPT")
  2. Foreign (International) Asset Protection Trust (aka an "Offshore Trust" or "IAPT").

  • Both are always irrevocable living trusts and are also referred to as "Self-Settled Spendthrift Trusts."
  • Both have come under considerable scrutiny from federal and state governments of late, especially since the passage of the Bankruptcy Reform Act.

• Grantor Trusts - Trusts under which the grantor (or someone other than the grantor) is treated by the IRS as the "owner". As said owner, the grantor is required to report all income of the trust on his or her own income tax return each year and pay the income taxes on such income. A Grantor Trust however, does NOT file its own 1041 income tax return form.
  The IRS considers a US person an owner of the trust or Controlled Foreign Corp (CFC) if he or she retains certain interests and/or powers over the trust fund or corp, as set forth in Sections 671-679 of the Internal Revenue Code, including the following:
  • The right to a reversionary interest in either the entitie's assets or income.
  • The right to control the beneficial enjoyment of either the entitie's assets or income.
  • The power to make decisions respecting the entitie's property
  • The power to amend or revoke the trust and take back the trust assets.
  • Most revocable living trusts established for the purpose of avoiding probate or to provide for the management of assets in the event of incompetency are Grantor Trusts because the grantor generally retains the right to amend or revoke the trust. In addition, the grantor is often the sole trustee, which gives the grantor the right and power to make decisions respecting the trust property.
  • A Grantor Trust is most often a revocable living trust, but can be an irrevocable trust under some circumstances. It is never a testamentary trust.
  • There are 2 types of Grantor Trusts:
  1. Domestic Grantor Trusts (US Grantor Trust or DGT)
  • Typical structure for a DGT:
    • The trustee is a US citizen
    • The beneficiary is a living trust
  2. Foreign Grantor Trust (FGT)
  • Typical structure for a FGT:
    • The trustee is NOT a US citizen ????
    • The beneficiary is a NOT a US person or trust ????
  • a DGT and FGT have different characteristics but both
    can be used as an Asset Protection Trust.

  • The FGT can act as an IAPT and does offer better asset protection than a DGT . . .
    but also has consderably more reporting requirements.
  • For this reason, many who desire the asset protection of an IAPT, initially set up a US grantor trust and then . . . should an event of duress occurs (e.g. a lawsuit) . . . convert it to a FGT.
  • The trustee in the non-Event Of Duress country is given the power in his discretion to terminate the Trustee resident in the Event Of Duress country, Provided the Domestic Protector does not negate his decision.
  • The Domestic Protector has the right to veto the Foreign Trustee, therefore all Substantial Decisions are made in the U.S. By having U.S. people control, the Trust passes the "Court and Control Test" and for IRS reporting purposes the Trust is deemed a domestic trust.
  • If an Event of Duress occurs in the U.S. the Foreign Trustee fires the Domestic Trustee and if the U.S. Protector does not negate that action the trust is now foreign.
  • IAPT's are usually treated as "foreign trusts" by the IRS. This means that transfers of assets to the trust will be treated as a sale for tax purposes. To avoid the sale treatment on the funding of the trust, most foreign trusts are drafted as FGT. Being grantor trusts, they avoid sale treatment on funding, and remain tax neutral during their existence.
  • FGT's are set up so that you are not the Grantor, Trustee, Beneficiary or Protector. In other words, in legal terms (and as far as the IRS is concerned), you have nothing to do with the Trust . . . And you can truthfully sign to that effect on your tax return (unless you later engage in action that jeopardizes this). So, in addition to the asset protection benefit most trusts provide, a FGT also provides tax advantages due to the absence of any controling, beneficial or signatory relationship to the trust. Of course in reality, you would still have de facto control, but it is the trustee who actually has official control. This does beg the question: How can you trust the trustee ?
  • Trusting the Trustee
  • On a fundamental level one should chose a trustee (which should be an attorney or a trust company), who has an excellent reputation and track record of being trustworthy and acting in the interest of the beneficiary. More than likely, if you are using a reputable law firm to set up the trust, they can recommend such a trustee.
  • On another level . . . you can also choose to use a foreign protector, with whom you know and trust. Furthermore, a provision can be written into the trust stipulating that no disbursement can be made by the trustee without the protector's signature.

  • Life Insurance Trusts:
  • Many people are unaware that at their death, all proceeds from life insurance policies they own, will be included in their estate for estate tax purposes. This is because if the policy owner can withdraw the cash value and change the beneficiary, then the policy owner will be deemed (by the IRS and if applicable, state taxing authorities) to have incidents of ownership over the proceeds, thus subjecting said proceeds at death to estate tax. One way to avoid the taxing of life insurance proceeds at death is to establish an Irrevocable Life Insurance Trust, or ILIT for short.
  • An ILIT is a type of irrevocable living trust that is specifically designed to hold and own life insurance policies. Once the ILIT has been set up, you will transfer ownership of your life insurance policies to the Trustee of the ILIT. While you can't be a Trustee of the ILIT (otherwise you'll be deemed to have incidents of ownership in the life insurance) your spouse and/or children can be.
  • Once you've transferred ownership of the life insurance to the Trustee of the ILIT, you will have given up all of your incidents of ownership over the policies. By placing ownership of the policy with a trust NOT the insured . . . you will have effectively removed the death benefit from your estate so that said proceeds will not be subject to an estate tax. In other words . . . the trust will "own" your life insurance policy, will pay the premiums; and when you die . . . will give the death benefit to your beneficiaries, NOT your estate.
  • Who Are the Beneficiaries of an ILIT?
  • The ILIT will also be designated as the primary beneficiary of your life insurance policies. Thus, after you die, the insurance proceeds will be deposited into the ILIT and held in trust for the benefit of your spouse during his or her remaining lifetime, and then the balance will pass to your children or other beneficiaries.
  • Another benefit of the ILIT is that since the insurance proceeds will be held in trust for the benefit of your spouse instead of going directly to your spouse, the proceeds can't be taxed in your spouse's estate either.
  • And you can also take the ILIT one step further and set it up as a Dynasty Trust or Generation Skipping Trust for the benefit of your children and future generations.
  • Potential Drawbacks of an ILIT:
  • The trust is irrevocable, meaning it is permanent. Once you decide to put your life insurance into a trust, there's no turning back the clock. You cannot take the policy out of the trust, although you can lapse or surrender it.
  • You can't change the beneficiary of the policy. This could be particularly damaging to you if your family relationships change during the life of the policy.
  • The policy's death benefit is taxable for three years after transfer. If you transfer an existing life insurance policy to a trust but die within the next three years, the death benefit is still subject to estate taxes. To avoid this, you can have the trust purchase the policy from the start, so there is no transfer.
  • No borrowing against your policy. If you want to take out a loan against your policy, forget it. You can't borrow against the cash value in the policy because you're no longer the policy's owner. The trustee can take out a loan, but if the loan benefits the insured in some way, the beneficiary could sue the trustee.

• There are two problems with all trusts in general:
1. The trust, having originated in England, is a Common Law concept that does not exist in Civil Law. Consequently, there could be potetnital conflicts between the two legal systems in a case, where assets are located in a country that interprets trust law differently than does the country where the person who created the trust resides.
2. In recent court cases, judges have started to erode the centuries-old trust law altogether in favor of public policy decisions like supporting the governement or the IRS. Courts can now "pierce the trusts" formed in Common Law countries like the USA or Great Britain exposing sensitive financial matters.

Offshore Private Interest Foundations (PIF)

• A foundation is a legal entity which can be either charitable (non profit) or private (for profit).

  • A charitable foundation will typically either donate funds and support to other organizations,
    or provide the source of funding for its own charitable purposes.
  • A private foundation on the other hand, is typically endowed by an individual or family.

• An offshore PIF offers the best features of an IAPT combined with the best features of an IBC. It acts like a trust, but opperates like a company. Essentially, an offshore PIF is an offshore company with limited liability, but has beneficiaries instead of shareholders, The PIF is the owner of its own assets and functions in a codified legal system, which is less open to interpretation than a common law entitiy such as a trust.
• Since there are no shares in a foundation, there are no owners.
  So while the foundation cannot technically engage in business activites . . .
  it can own the shares of a company which is engaged in business activities.
• Whereas a trust is managed by trustees, the foundation is managed by a council . . .
  which acts more like a board of directors.
• One of the most commonly used foundations for the purpose of asset protection is
  the Panama PIF:
• A Panama PIF combines the best features of a corporation, a will and a trust together
  . . . but with greater versatility and anonymity than either entity by itself.
• A Panama PIF is a court tested asset protecting entity based on Panama statues modeled after the Lichtenstein "Stiftung".
  • The assets of the PIF cannot be used to satisfy the debts of the Founder or beneficiaries, such as divorce proceedings, lawsuits, bankruptcy or other liabilities. When assets have been transferred to the Foundation and out of the reach of creditors, any claims of fraudulent transfer to remove assets from the reach of creditors must be made within three years and it usually takes five years or more for court in Panama to hear such a claim.
  • The Panama PIF is a sophisticated and efficient substitute to wills, trusts etc. being a perfect vehicle for inter vivos or mortis causa estate planning, as it can be set up to remain in perpetuity in so far as the purposes of the Foundation continue to be met. This may prevent hereditary disputes, as well as avoiding forced heirship rules.

• If ever asked under oath about your ownership interest in foundation-owned corporation . . .
  • you could truthfuly say that you are not the owner of the corporation.
  • In the unlikely event that the Foundation's existence was discovered . . .
    you could truthfully say that you do not own that as well.

• According to Panama law, the assets of a Panama PIF are not considered to be subject to sequestration or embargos. This means that the assets can not be frozen as a protective measure before a trial has been completed. Of course it is prudent for the Foundation to never do anything that could lead to any litigation.
• The foundation can have secret instructions to dispose of assets in a specified way in the event of duress.
• a PIF can be used to provide estate planning according to your very explicit instructions.
• The Panama PIF is created by a charter
  and has a Founder, a Council, a Protector, and Beneficiaries.
• The charter is registered with the Public Registry in Panama, in the same way as a company. The terms of the foundation charter can be made as fluid or rigid as you wish. The charter is typically written in such a way that it's provisions can be easily altered to meet contingencies by means of "regulations".The charter is the only public document, and will typically include the names of nominees, who serve as the Foundation Council.
• The Founder is the person or entity that establishes the Foundation in the Public Registry of Panama. The Founder has no control of any sort over the Foundation and its affairs, and is only recognized as the individual who presented for filing the Foundation articles in the public registry when the foundation was originally registered. The Founder may be one or more natural or legal persons of any nationality. Panama law is silent on the transferability of the Founder's rights and obligations meaning that there is nothing to prevent the transfer of these rights and obligations from a nominee founder to the real founder by a private document, It is possible for the Founder to retain certain controls of the Foundation, although these should be set out clearly in the Foundation's Bylaws or a private letter of instructions.
• The Council is similar to the board of directors of a corporation. The council members are each recorded in the public registry. A Nominee Foundation Council can fill the council positions, just as a nominee director can for a corporation. Nominee council members have no control over the Foundation assets, can not go to the bank and take money out since they are not bank account signatories.
• The Protector is the person or entity who has the real control over the foundation and all of the foundation assets. The Protector is appointed by the Foundation Council at the time the Foundation is created. A protector is not mandatory, and could be a nominee protector as well.
• After the Protector is put into position, the Protector is free to remove and/or replace nominee council members, at any time without any further permission or further steps required.
• The Protectors appointment can be kept private through a notarized Private Protectorate Document, signed by the nominee foundation council members. This document is not registered or recorded anywhere, making the position of protector anonymous.
• It is possible to insert a clause into the foundation charter that in order for the nominee council members to actually exercise their powers, they be required to obtain written authorization from the foundation protector. This means if they tried to do something on behalf of the foundation, like enter into a contract for example, they would be unable to do so without presenting written permission from the protector as well as the document that names them as foundation council members.
• The Beneficiaries, who are not owners, but receive the PIF's benefits, are appointed by the Protector through either a simple private written set of instructions or a more formal set of Foundation By-Laws. Either way, their names are not in any registry or database, thus keeping their identities private and confidential, which can be important in protecting them from being a target of kidnapping, blackmail, extortion, identity theft, frivolous litigation etc.
• The Panama PIF may be set up so that the protector is the sole beneficiary of the foundation until death, at which time the foundation continues but its purpose alters for the benefit of the other beneficiaries as pre-designated by the protector.
• The protector could insert a clause into the instructions that stipulate for example if a certain beneficiary (say the surviving spouse) remarried, their benefits would then shift to another beneficiary (the children). Foundations can continue for 120 years. Panama Foundations restrict the ability for the beneficiaries to fight with each other over the estate and wind up not speaking to each other for the rest of their lives.

• Foundation By-Laws: There is a legal precedent that the By-Laws must follow. Their content can never be modified at the discretion of the protector. They can be held privately for anonymity, or can be registered publicly which is not suggested normally.
• Letter of Instructions: The Foundation does not need to have By-Laws, since a Letter of Instructions is legally sufficient for fulfilling the Protectors' requested testamentary instructions or wishes. There is no specific format for the Letter of Instructions, and it can be written or changed at any time after the Foundation is formed, per the Protectors wishes. The Letter of Instructions can be held privately with no filing requirement
• Restrictions - In general, PIF's may not engage in commercial activities, like a corporation can, but they are not precluded from owning corporations that are actively engaged in commercial business activities, as long as the profits of those activities are used for the purposes for which the Foundation exists. Accoordingly PIF's can engage in passive investments like the stock and bond markets, mutual funds, bank deposits bearing interest, Forex etc. as long as the proceeds are used for the purposes for which the Foundation exists.
• Tax Advantages: The assignment, transfer or donation of assets to the Foundation is not subject to any tax under Panamanian law, neither is the organization, modification or dissolution of the Foundation. Provided it meets general requirements; income generated by assets of the Foundation is not subject to taxes, contributions, rates or liens of any kind.

• There are no reporting requiremetns for foundations. All the more reason to not tell anyone in your home country. You might for example list your children as beneficiaries, but you do not need to tell them about it. Instead you should leave instructions in a sealed envelope with a trusted Swiss lawyer, for example, to be opened only in the event of your death.
• Just because the Panama Private Interest Foundation is incorporated in Panama, doesn't mean you have to bank there. In fact, It would be a much better idea to open an account where most of the Foundation's assets will be held . . . outside of Panama.

  Click here to see Panama Law 25 which governs how a Panama PIF works.

Off-Shore Private Placement Life Insurance (PPLI)

Though not really a business entity, per se, Private Placement Life Insurance (PPLI)
is an excellent asset protection vehicle . . . with some very unique tax minimization features:
• Assets inside the PPLI enjoy 100% Asset protection (exempt from creditor attachment).
• Assets inside the PPLI grow and compound tax free (not subject to capital gains tax).
• PPLI is a tax shelter for income (premiums are not subject to income tax).
• Death benefit is paid tax free (not subject to estate tax).
• Investor has the ability to borrow against the Cash Value of policy (tax free).
• IRS audit risks are minimized because there are not any presumed tax avoidance issues:
• Assets held inside a qualifying life insurance policy are not subject to income tax, or any reporting requirements (IRC section 72e5).
• Qualifying life insurance policies are granted an "angel exception" i.e., an IRS approved transaction (IRS Revenue Procedure 2004-65, 2004-66, 2004-67, 2004-68).

In order to understand how PPLI works . . .
it is important to first understand some other insurance concepts:

• Variable life insurance (VLI) is a form of life insurance that has cash value linked to the performance of one or more investment accounts within the policy. Because of its investment features, insurance carriers in the United States typically register offerings of variable life insurance with federal and state securities regulators.
• The "variable" component in the name refers to the ability to invest in separate accounts whose values vary, because they are invested in stock and/or bond markets (for example).

• Variable Universal Life Insurance (VUL) is a special type of VLI.
• The "universal" component in the name refers to the flexibility the owner has in making premium payments. The premiums can vary from nothing in a given month, up to maximums defined by the Internal Revenue Code for life insurance. This flexibility is in contrast to whole life insurance that has fixed premium payments that typically cannot be missed without lapsing the policy.
• PPLI is a form of VUL that is offered privately, rather than through a public offering.
• Being a VLI, PPLI has cash value that is dependent on the performance of one or more investment accounts in the policy.
• With PPLI you or your advisor directly negotiate with the insurance company . . .
  resulting in much lower fees than if you went through an insurance agent.
• PPLI policies have funds which are held in segregated accounts, protecting the funds against the claims of the carrier's creditors, in contrast to standard whole and universal life insurance policies, which comingle policy funds with the insurer's general fund.
• Off-shore PPLI has advantages over On-shore PPLI
• Off-shore PPLI premiums are typically much lower than their On-shore counterparts
  AND are not subject to premium taxes, as are domestic life insurance premiums.
• Investment flexibility is much greater with off shore PPLI
  due to the absence of SEC and state insurance security regulations . . .
  making it possible for US persons to invest in foreign securities
• Off-shore PPLI Policy minimum amount (typically 1 -2 million) is much smaller
  than their On-shore counterparts (typically 5-10 million).
• Domestic life insurance carriers require premium to be paid in cash,
  while Offshore PPLI carriers allow premium to be paid "in kind."
• Loans from Offshore PPLI are tax free, and unlike with On-shore PPLI

• PPLI restrictions:
• In order for PPLI to be treated by the IRS as a Life Insurance Policy . . .
  it must comply with IRC Section 7702.
• The beneficiary can not control investment of the policy assets,
  but can designate an investment manager
• The death benefit must meet a minimum requirement

Keep in mind that PPLI is NOT typically purchased for it's insurance benefits.
Rather it IS primarily purchased for tax planning and asset protection purposes . . .
The objective being to maximize cash deposits (investments) into the policy,
while complying with the IRS requirements of relinquished investment control
and meeting their minimum death beneft requirement so that your PPLI
will qualify for and be treated by the IRS as life insurance.