What is Escrow and how does it work?

Have you ever wondered what an Escrow is and what it entails? it is not important to know just what the word means, but the technicalities involved are also important.

Today, to avoid the risk of creditors becoming insolvent for especially international commercial transactions, this is a common and daily word in our day.

An Escrow is therefore a financial agreement in which TFE services holds and regulates the payment of the funds required for two other commercial parties involved in a given transaction. Eescrow makes transactions secure by keeping payment in a escrow account that is only released when all terms of the business agreement are met as supervised by lawyers and auditors by our company.

Escrow is very useful in the event that large amounts of money are involved in a transaction and a number of obligations must be fulfilled before a payment is released.

Here are some non-exhaustive examples:

1) in the case of a design service where the buyer may wish to confirm the quality of work done before making a full payment and the designer does not wish to carry out a large amount of work without any guarantee that he will receive the payment.

2) in the case of purchase of aircraft and boats, where the buyer wishes to carry out maintenance inspections before making a full payment and the seller does not wish to have these inspections carried out with an evident stop of the vehicle without any guarantee that if the inspections will be successful however the seller will receive the payment.

3) the escrow can also be used to guarantee the payment of goods that must be produced with strong personalization or when in the country of the buyer or seller there is no legal system or bank payment systems capable of guaranteeing a good economic result of the commercial transaction.

USES OF THE TRUST

the assets are held on behalf of the Trustee trustee, thus keeping the identity and interests of the settlor and beneficiaries confidential.

Trusts allow you to more flexibly determine exactly how inheritance is distributed. For example, trusts are often established in wills to allow a second spouse to benefit from property while she is alive, but ensuring that children of a previous marriage receive ownership when the second spouse dies.

a way to place activities all over the world in a single vehicle to simplify the management of activities and centralized financial reporting.
In addition to establishing participatory structures for wealth protection, growth and transition, a family trust can be a tool for implementing broader succession, leadership and governance plans. Trusts can also be used to protect assets from future creditors.

The Trust can also be used to reduce tax liabilities in some circumstances. For example, since trust-regulated activities are not part of the beneficiary’s assets until the beneficiary receives the benefits, the personal income taxes can be reduced and planned over the medium to long term.

Trusts can take care of the assets until the beneficiary minors are mature enough to manage their finances wisely protect the children from checking too much money too early, while the trustees can, based on their desire of the settlor, use the money for their education, care and other needs.

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Why should we then use Escrow payment?

With dozens of other payment options available you may be wondering why so many businesses and individuals use this new payment method. Indeed, older payment methods are tried, tested and much more convenient for some people. However, payment via Escrow offers exclusive advantages over other payment options.

When you pay or expect to receive a payment with the use of an Escrow account, the chances of insolvency are null and the contractual disputes are remitted within 15 days to the arbitration judgment of the company TFE services acting as Escrow, any arbitration decision is remitted to the judgment of auditors and lawyers experienced in international contracts at no additional cost.

Instead, try to imagine what would happen in the dispute phase if you were to claim to ordinary international justice!

Here we have experience in the incorporation of trusts and companies

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