How to Use Offshore Trusts for Film and Entertainment Assets

If you own film, TV, music, or gaming rights, you already know the creative work is only half the story. The other half is protecting, financing, and exploiting those rights across borders without losing control. Offshore trusts can be a powerful tool for this, but only if they’re set up with care. I’ve seen trusts save productions, preserve libraries, and simplify family transitions—and I’ve also seen rushed structures unravel under tax audits, lawsuits, or partner disputes. This guide walks you through how to use offshore trusts for entertainment assets in a practical, effective way.

What an Offshore Trust Actually Is

A trust is a legal relationship: a settlor transfers assets to a trustee to manage for beneficiaries under a trust deed. “Offshore” simply means the trust is established in a jurisdiction different from where you live or where the business operates, often in places with strong trust law and specialized courts.

Key players:

Settlor: whoever contributes assets (often a producer, talent, or corporate owner).

Trustee: a licensed professional fiduciary responsible for managing the assets per the deed.

Protector: an optional “referee” who can approve or veto certain trustee actions.

Beneficiaries: those who benefit—could be you, your family, a foundation, or partners.

Common trust types in entertainment:

Discretionary trusts: trustees decide when/how to distribute assets within set parameters—useful for asset protection and flexibility.

Purpose or STAR trusts (Cayman): designed for a purpose, not just named beneficiaries—handy for holding a franchise or long-lived library.

VISTA trusts (BVI): allow the trustee to hold a company without day-to-day interference—helpful when you want a management team to run the IP company.

Why the Entertainment Industry Uses Them

Why go through the trouble? Because entertainment assets are high-value, global, and lawsuit-prone. Offshore trusts help with:

Asset protection: ring-fencing IP from personal liabilities, divorces, or business failures. Courts look at timing and intent, so early planning matters.

Financing leverage: lenders prefer structured rights with clean chain-of-title. A trust with an underlying company can serve as a stable collateral platform.

Succession: smooth transfer of control without probate, especially across multiple countries and family branches.

Governance and continuity: clear decision-making rules, even if a key individual becomes incapacitated or relationships sour.

Tax efficiency: organize flows via treaty-friendly holding companies to minimize withholding, avoid double taxation, and manage timing—while complying with your home country’s rules.

Privacy and discretion: keep beneficiaries and transaction details off public registers in jurisdictions that allow it, while meeting KYC/AML standards.

What Assets Belong in the Trust

You can place almost any entertainment property or revenue right into, or under, a trust structure. Typical candidates:

Film and TV copyrights, remakes, sequels, characters, and franchise bibles

Music publishing rights, master recordings, neighboring rights, and catalog royalties

Talent image rights, brand endorsements, and merchandising

Podcast IP, game titles, engine/licensing rights, and in-app purchase revenue shares

Distribution contracts, pre-sales, and collection account rights

Profit participation points, residuals, and backend formulas

Trademarks and domains linked to rights libraries

The trick is to align what the trust holds with how money flows. For example, a trust might own a BVI company that owns the film IP, while a treaty-jurisdiction company (like Ireland or the Netherlands) licenses that IP to distributors for better withholding outcomes, with royalties flowing back up to the trust-owned group.

How Revenue Actually Flows in Entertainment

Understanding exploitation windows helps design the trust structure:

Film/TV: pre-sales, theatrical, transactional VOD, subscription streaming, free-to-air, airline/educational, pay TV, catalog library licensing.

Music: streaming, downloads, sync, performance rights (PROs), mechanical royalties (MLC), neighboring rights (SoundExchange), physical sales.

Games: direct sales, platform rev shares, DLC, subscriptions, microtransactions, licensing.

A typical waterfall for an independent film: 1) Gross revenues collected into a collection account (escrow) per a Collection Account Management Agreement (CAMA). 2) Distribution fees and expenses paid. 3) Recoupment of senior lenders and gap financiers. 4) Deferments and participations. 5) Net profits to the producer entity.

Placing the rights owner or participation holder inside a trust—via an underlying company—lets you receive each layer of income in a coherent, auditable way.

Jurisdiction Selection: Pick for Law, Not Just Tax

A few robust trust jurisdictions and their appeal:

Cayman Islands: STAR trusts for long-term IP stewardship; sophisticated courts; widely accepted by institutional lenders.

British Virgin Islands (BVI): VISTA trusts allow trustees to hold companies with lighter intervention; excellent for holding company structures.

Jersey/Guernsey: strong, creditor-tested trust regimes; conservative fiduciary industry; good for complex family governance.

Isle of Man: similar strengths, well-regarded for insurance and media-oriented structures.

Singapore: strong rule of law and banking; good for Asia-facing catalogs.

Tax treaties matter for royalty flows, but many classic offshore centers have few treaties. Solve this with a dual structure: the trust sits in an offshore jurisdiction, while it owns a mid- or onshore company in a treaty-friendly jurisdiction (Ireland, Netherlands, Luxembourg, UK, Canada) to receive royalties. Substance and management must match the tax story.

Three Structure Models That Work

1) Trust Holding IP Directly

Pros: fewer moving parts; strong asset protection; simple governance.

Cons: weaker treaty access; higher withholding in some source countries; trustees may be less comfortable managing operational IP.

Best for catalogs with limited new licensing, philanthropic/heritage goals, or where withholding is negligible.

2) Trust + Offshore IP Company (e.g., BVI/Cayman)

Pros: separates fiduciary from operations; familiar to lenders; enables financing and security packages.

Cons: still limited treaty relief; may face withholding on royalties from major markets (e.g., US).

Best for project slates and library management where lenders want an SPV borrower/pledger.

3) Trust + Treaty-Holding Company + IP Company

The trust sits in Jersey/BVI/Cayman and owns a mid- or onshore company in a treaty jurisdiction (e.g., Ireland) that licenses IP to distributors. The IP itself could be held at the treaty level or below, depending on legal advice.

Pros: better treaty access; cleaner banking; familiar to studios and platforms; can combine with local production incentives.

Cons: more compliance; needs real substance (board, office, staff, decision-making).

Best for cross-border exploitation and streaming-heavy revenue where withholding can materially erode returns.

Step-by-Step: Setting One Up

1) Objectives and inventory:

Define what you want: asset protection, financing readiness, family succession, or sale readiness.

Inventory all rights, claims, and contracts. Trace chain-of-title—assignments, option agreements, guild terms, music clearances, underlying rights.

2) Pick jurisdictions and advisors:

Choose a trust jurisdiction with experienced trustees and courts.

Choose a treaty jurisdiction (if needed) that aligns with your revenue sources.

Engage a trust company, tax counsel in your home country and the treaty/offshore jurisdictions, and an entertainment lawyer who understands collection accounts and participations.

3) Draft the trust deed and governance:

Discretionary with a protector is common.

Include reserved powers carefully (e.g., ability to appoint/remove investment advisor).

Set up an investment or IP committee to oversee licensing and financing deals.

4) Form underlying entities:

Incorporate an IP company and, if relevant, a treaty company with genuine substance (directors, board meetings, registered office, possibly staff).

Open bank accounts early; entertainment deals can be delayed by KYC if you leave this too late.

5) Assign IP and rights:

Assign copyrights, trademarks, and receivables to the appropriate company. Record assignments with the US Copyright Office, UK IPO, EUIPO, and relevant territories.

Notify distributors, PROs, the MLC, SoundExchange, and collection account managers of the new payee.

6) Build the revenue rails:

Put a CAMA in place for films and series with multiple financiers.

Where you expect US-source royalties, prepare W-8BEN-E forms, treaty disclosures, and 1042/1042-S compliance on the payer side if applicable.

7) Financing and security:

Lenders will take security over the IP company’s shares and IP; trustees may need to consent.

Use intercreditor agreements to organize senior/gap/MEZZ positions and waterfall.

8) Compliance and reporting:

FATCA/CRS reporting through the trustee or financial institutions.

Economic substance filings (e.g., in BVI, Cayman).

Local company filings, accounting, and audits where required.

9) Ongoing governance:

Minutes for key IP decisions.

Annual review of distributions vs. accumulation for tax efficiency.

Health-check chain-of-title annually—new seasons, spin-offs, remasters, and derivative works.

Timelines: 4–8 weeks to establish a basic trust and company stack if KYC is straightforward; 8–16 weeks if multiple jurisdictions and banking are involved.

Tax Considerations You Can’t Ignore

This isn’t about dodging taxes—it’s about eliminating friction and double taxation while staying compliant.

US persons:

Grantor trust rules can pull income back onto your personal return if you retain certain powers or are a beneficiary.

CFC/PFIC rules may apply to underlying companies; passive royalty income can be punitive if not structured right.

US withholding on US-source royalties (generally 30%) may be reduced by treaty if the payee is a treaty-resident entity with substance—and if the payments qualify as royalties under that treaty and aren’t ECI (effectively connected income).

SAG-AFTRA, DGA, WGA, and residual systems are separate from tax; don’t intermingle residual obligations with trust distributions.

UK persons:

Settlor-interested trust rules can tax the settlor on trust income.

Transfer of assets abroad rules and benefits charges require careful planning; advisers are essential.

The UK is overhauling non-dom rules from April 2025; don’t assume yesterday’s offshore benefits still apply.

EU/other:

GAAR and CFC rules look at substance and control; paper residency won’t survive scrutiny.

DAC6 may trigger cross-border reporting for certain arrangements.

Local withholding on royalties varies widely; treaty shopping without substance risks denial.

Practical tip from experience: map the top five revenue sources (US streamers, EU broadcasters, global music platforms, game platforms, sync houses) and run mock invoices through the structure to see withholding outcomes and filing obligations. You’ll catch 80% of headaches before they happen.

Economic Substance and Management

Tax authorities look at where real decisions happen. If your treaty company claims Irish residency, but all decisions are made in Los Angeles, you’re asking for dual-residency disputes.

Appoint resident directors who actually attend meetings.

Keep board minutes that demonstrate decision-making on licensing, budgets, and financing.

Maintain an office or outsource to a licensed corporate services provider with substance solutions.

Align banking, accounting, and legal services with the claimed jurisdiction.

Governance: Trustees, Protectors, and Power Balancing

Trustees are fiduciaries; they’ll err on caution. Your job is to set a governance framework they can implement:

Use a protector with limited, well‑defined powers (e.g., replace the trustee, veto distributions, approve sale of a library).

Establish an investment or IP advisory committee, especially for live projects or slate financing.

Create a clear letter of wishes that states your vision—franchise stewardship, philanthropic goals, or sale triggers.

If you’re a creative with strong views, consider a VISTA trust holding a company; you retain board-level control with the trustee in the background.

Documentation You Must Get Right

I rarely see structures fail because the trust deed was faulty. They fail because the paperwork around the IP was disorganized.

Chain-of-title: assignments, work-for-hire agreements, option and purchase agreements, reversion clauses, termination rights under US law (e.g., 17 U.S.C. §§ 203/304), and writer/director guild agreements.

Music: sync licenses, publishing splits, mechanical licenses, master use, and cue sheets for every production.

Registrations: copyright offices, trademark offices, PROs (ASCAP/BMI/PRS/SACEM), mechanical collections (MLC), neighboring rights (SoundExchange, PPL), and international codes (ISWC, ISRC, EIDR).

Collection accounts: CAMA agreements with reputable managers; consistent revenue reporting formats.

Tax and forms: W-8BEN-E, treaty statements, 1042-S matches, UK CT61 where relevant, VAT/GST registrations for digital supplies if applicable.

Security filings: UCC-1 in the US, UK Companies House charges, and notices to counter-parties.

Financing with an Offshore Trust

A well-built trust structure supports financing rather than complicating it.

Senior loans and gap finance: lenders want predictable waterfalls and enforceable security. A trust‑owned IP company is a standard borrower.

Royalty-backed lending and securitization: catalogs with stable cash flows (music, long-running series) can be pooled into notes. Investors care about historic volatility and platform concentration risk.

Completion bonds: typically 2–3% of budget; ensure the beneficiary rights align with the security package.

Tax credits and incentives: pair the trust with local production SPVs in incentive jurisdictions (Canada, UK, Eastern Europe, certain US states). Keep subsidy receipts and cast/crew spend evidence clean for audits.

Using Trusts in Co-Productions and Pre-Sales

Co-pro deals thrive on clear ownership. Position the trust-owned company as:

The IP owner licensing to production SPVs under controlled terms.

The residual rights owner post-exploitation window.

A neutral platform for multiple equity participants—distributions per an agreed waterfall administered by a collection account manager.

Pre-sales become smoother when buyers see: (1) a trust-owned rights entity with clean title, (2) a CAMA in place, and (3) a reputable trustee who will honor delivery, E&O insurance, and security interests.

Succession Planning for Talent and Producers

Entertainment assets often outlive their creators. A trust solves for:

Avoiding probate across countries—vital when royalties flow from dozens of territories.

Preparing for forced heirship in civil-law jurisdictions: many offshore trust laws can accommodate anti-forced-heirship provisions, but this is highly jurisdiction-specific.

Dividing control vs. economics: children with different skills can receive distributions while a professional board runs the IP company.

Long-term stewardship: STAR or purpose trusts can protect characters and franchises from impulsive sales.

A thoughtful letter of wishes is worth its weight in gold. Write out your priorities: cultural legacy, charitable licensing windows, vote thresholds for selling the library, preferred creative teams, and ethics around the brand.

Privacy and Reputation

Public registers in some countries make it easy to trace ownership. A trust adds a privacy layer when structured lawfully. Still, expect:

KYC/AML disclosure to banks, platforms, and collection societies.

FATCA/CRS reporting in aggregate terms.

Confidentiality preserved in most jurisdictions, with exceptions for court orders or international information exchange.

For high-profile talent, route endorsement revenues and likeness rights through an image-rights company held by the trust, with brand guidelines embedded in licensing templates to control reputational risk.

Insurance and Legal Risk Mitigation

Trusts don’t replace basic risk management:

E&O insurance with reputable carriers; keep your clearance bible pristine to avoid claims.

IP infringement defense and cyber cover if you hold digital assets.

Indemnities in distribution agreements capped sensibly; don’t give away unlimited liability.

Litigation hold procedures—ensure your trustee and companies know how to preserve documents across borders.

Costs and Timelines: Plan Budget Realistically

Typical ranges I’ve seen (very rough, varies by jurisdiction/complexity):

Trust setup: $7,500–$25,000

Annual trustee/admin: $5,000–$20,000

Underlying company setup: $1,500–$5,000 per entity; annual $1,000–$4,000

Economic substance services: $5,000–$25,000 annually if using managed office/directors

CAMA setup: $7,500–$20,000; annual fees or percentage of receipts

Legal for IP assignments and diligence: $10,000–$75,000 per project or catalog

Banking and KYC: time cost more than fees—start early

From first call to go-live: 1–3 months if straightforward; 4–6 months for multi-jurisdiction structures, bank onboarding, and IP re-papering.

Three Quick Case Studies

1) Independent producer with a growing slate:

Problem: A producer had scattered SPVs, personal guarantees, and messy rights chains. Investors balked.

Solution: A Jersey discretionary trust with a BVI IP company holding all library IP. An Irish company licensed the IP, collecting global royalties. A CAMA handled waterfall distributions.

Outcome: Senior lender provided a revolving credit facility secured over the IP company; pre-sales improved. Annual withholding dropped on EU royalties; US flows were structured to minimize leakage where treaty benefits applied.

2) Songwriter catalog with US and EU revenues:

Problem: High US withholding on performances and mechanicals; complex estate structure.

Solution: Guernsey trust owning an Irish publishing company with real substance. The Irish entity registered with PROs/MLC and managed sub-publishing.

Outcome: Smoother global collections, estate simplified, and better negotiation leverage on syncs. Family received distributions per a tax‑aware schedule.

3) Actor’s image and brand rights:

Problem: Risk of lawsuits from endorsements, plus divorce concerns.

Solution: Cayman STAR trust with a BVI image-rights company. Contracts required pre-approval by a brand ethics committee (advisory to the trustee).

Outcome: Clean separation from personal assets; insurers offered better terms due to governance and approvals.

Common Mistakes and How to Avoid Them

Treating the trust like a piggy bank:

Fix: Keep distributions documented; avoid mixing personal expenses with company accounts.

Picking jurisdictions just for low tax:

Fix: Choose strong trust law and reliable courts first; then add treaty jurisdictions with substance.

Weak chain-of-title:

Fix: Audit and cure every gap before moving assets—underlying rights, music cues, talent agreements, and guild obligations.

Ignoring economic substance:

Fix: Appoint resident directors, hold real meetings, and keep records of decision-making where the company claims residency.

Over-reserving powers to the settlor:

Fix: Balance control with fiduciary independence to avoid grantor or settlor-interested tax issues and asset protection weaknesses.

Bank and platform onboarding left to the end:

Fix: Start KYC early; trustees can help navigate enhanced due diligence.

Misclassifying royalties:

Fix: Get tax opinions on how film rentals, streaming payments, and hybrid licenses are characterized under treaties.

No plan for US termination rights:

Fix: Analyze whether transfers are subject to 35-year termination; set aside reserves or alternative licensing strategies.

When Not to Use an Offshore Trust

If you’re mid-litigation or facing creditor claims and the timing would look like a fraudulent transfer.

When your main revenues are strictly domestic with minimal lawsuit risk and you already have a simple, tax-efficient onshore setup.

If you can’t maintain substance or governance—paper structures can create more risk than they remove.

When the beneficiaries’ home-country rules will simply tax all trust income at high rates regardless; sometimes simpler is better.

Practical Playbook and Checklist

Strategy:

Define goals: protection, financing, succession, tax efficiency.

Map revenue sources by country and platform; model withholding.

Team:

Offshore trustee with entertainment experience.

Home-country tax counsel, international tax counsel.

Entertainment attorney for chain-of-title and CAMAs.

Corporate services provider for substance and directors.

Structure:

Choose trust jurisdiction (e.g., Cayman, Jersey, BVI).

Choose treaty jurisdiction company if needed (e.g., Ireland).

Draft trust deed, select protector, write a detailed letter of wishes.

Assets and flows:

Assign IP to the appropriate entity; register assignments.

Notify PROs, MLC, SoundExchange, distributors, and CAMAs.

Open bank accounts; set up invoicing and tax forms.

Compliance:

FATCA/CRS, economic substance filings.

Accounting and audit calendar.

KYC updates with banks and platforms.

Financing:

Security package and intercreditor agreements.

E&O and completion bond alignment.

Operations:

Board calendar, minutes, and decision logs.

Annual rights and metadata audit.

Review distribution agreements and renegotiate weak terms.

A Few Data Points to Ground Decisions

Global box office recovered to the mid-$30 billion range in 2023–2024, while subscription streaming revenues continue to grow but have become more concentrated among a handful of platforms. Concentration risk should be in your financing model.

Music industry revenue topped the high-$20 billions in 2023, with streaming the dominant share; catalogs with diversified platform exposure command better multiples.

Completion bonds typically cost 2–3% of budget; senior lenders to independents still expect CAMAs and strong E&O.

Numbers shift year to year, but the trend is steady: stable rights with clean data and governance draw cheaper capital and better distribution terms.

Personal Insights From the Trenches

Put governance on rails: I’ve seen trustees freeze at the wrong moment because they didn’t have a clear mandate for approving licensing deals or cash calls. An IP committee charter prevents friction.

Don’t underestimate metadata: Rights conflicts often trace back to incomplete cue sheets, missing ISRC/ISWC codes, or unregistered splits. Catalog value hinges on metadata quality.

Letters of wishes matter: Families and partners operate better with narrative context—why you built the structure, what to preserve, what to sell, what to avoid. It’s not legally binding, but trustees take it seriously.

Build in sale readiness: Even if you don’t plan to sell, run your library like a future sale is possible—audited statements, standard contracts, and consistent dashboards. Buyers pay for clarity.

Taking the Next Step

Start with a 90-minute strategy session with your entertainment counsel and a trust company. Bring your rights inventory, major contracts, and a revenue map by country.

Run a withholding/treaty analysis for your top payors; choose your treaty jurisdiction accordingly.

Draft a one-page governance blueprint: who makes IP decisions, who oversees financing, and how distributions should work.

Set up a pilot: move one revenue stream or a small catalog into the structure, iron out banking and tax forms, and scale from there.

Used well, offshore trusts aren’t about complexity for its own sake. They’re about turning a patchwork of contracts, rights, and payments into a coherent, bankable, and durable platform—one that protects the creative work and the people behind it, long after the final credits roll.