Asset Protection

Asset Ownership

Any asset registered in your own name is at risk. Let that sink in for a moment.

It is at risk with insolvency, it is constantly at the hands of creditors, the government and even your spouse in the instance of a divorce. 

A solution is to own nothing, yet control everything. 

Layering

In order to protect your assets, one goal is to put as much distance between the ownership of the asset and yourself.

You should have an understanding on Holding Companies, their Subsidiaries and the role of Trusts and where you fit in.

If one have to explain it to a five year old. Company A will be the owner of an asset, which it will lease to Company B which in turn will use the asset to create an income. Should Company B run into financial difficulty, there is no assets to claim during insolvency. This example establish one layer of protection.


Wealth Management

The generation of wealth happens over time and takes blood, sweat and tears and can be lost in the blink of an eye. It starts small and takes a lifetime to accumulate and we don't want to appear at the end just to find ways to protect it but rather be there from the beginning to guide you to accumulate, structure and manage it to provide a passive income for generations to come.

Education & Knowledge 

Every Tom, Dick & Harry has a Private Company but still runs it like it is a Sole Proprietor which defeats the purpose of having it in the first place for it renders very little protection or tax benefits. Don't be to hard on yourself for our education system is not set up in order to protect you but rather to make you the model employee.

Understand the following

  • Income vs Equity : Income is taxable, equity is not. Use it correctly and save.
  • Diversification of Asset Classes : Real Estate, Private Equity, Stocks, Crypto's and Income generating businesses.
  • Assets vs Liabilities : It might sound simple, but many people spend their money on stuff and not on assets which will create a passive income which in turn will buy them stuff. 
  • Controlled Salaries : With the correct structure, your income will be controlled and not a pay as you go system whereby you are over taxed without even knowing it. Capital gains vs salary is a perfect example for Capital gains for companies are effectively taxed at 21.6% vs salaries which can be taxed up to 45%.
  • Asset Management : With the correct structure in place, your assets will be held in various entities and leased in such a manner to be protected and generating an income.
  • Depreciation : Use depreciation correctly not only to wipe out income and thus saving on taxes but also to manage capital gains tax in the event where you dispose of an asset. 
  • Compliance : Taxes is a part of life and it is important to comply but you don't have to over pay. The same goes for laws and legislation with regards to companies, their management and the benefits it offers within the framework of the law.
  • Location : Your companies don't have to be in one jurisdiction. Some of your companies can be offshore and still do business in South Africa. Structure your portfolio in such a manner that you are valued and respected and appreciated as a taxpayer and not abused as one. You don't have to rely on one country's rules. For example the Company Tax in Ireland is 12.5% vs the Company Tax in South Africa which is 27%.
  • Bilateral Investment Treaties : Get yourself in the know of the power of Bilateral Investment Treaties signed between countries in order to protect your assets. South Africa signed about 40 of these treaties during the reign of Nelson Mandela and most of these treaties have a sunset clause of 20 years.
  • Shareholding : Understand shareholding and the responsibilities and benefits. We deal with a lot of clients whom are the sole shareholder and director of a company without the knowledge of the implications thereof.
  • In-house Company Structure : Understand the structure of a company and all the roles from the shareholders, the board, the directors, the management team and the systems and procedures that needs to be in place to function properly. 
  • Build Business Credit : Credit used correctly can be one of your biggest assets. It is using other peoples money to create income and it can be used to save on taxes.

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