Asset Segregation: LLC, Trust or Holding in 2026

In offshore asset segregation, each tool isolates a different risk: the LLC separates business risk, the trust separates ownership of the assets, and the holding company concentrates equity interests. None shields assets from an existing debt: the Civil Code (art. 158) and the Code of Civil Procedure (CPC, art. 792) allow the transfer to be undone.

Law No. 14,754/2023 (Lei 14.754/2023) also keeps taxing you.

This article compares the three tools side by side, with Brazilian law and foreign laws taken from the official text. For an overview of the topic, read the guide to offshore asset protection and what the law allows. For the case of a specific jurisdiction, see the article on offshore in the BVI.

What does each tool segregate, and what does it not segregate?

The tax row surprises those who expect "offshore structure" to mean "out of reach." Legal segregation and taxation are separate questions.

Does the LLC protect personal assets?

It protects personal assets from the LLC's business debts, as long as you respect the separation between the two. The Brazilian Civil Code follows the same logic: a legal entity is not the same as its members (art. 49-A), and asset autonomy is "a lawful instrument for allocating and segregating risks" (sole paragraph).

Protection against the member's personal creditors depends on state law. In Florida, for example, art. 605.0503 of the LLC law says that the charging order (a lien on the distribution rights) is the only means for a member's creditor to satisfy the claim against the LLC interest. But item (4) of the same article creates an exception for the LLC with a single member: if the creditor shows the court that distributions will not pay the debt within a reasonable time, the judge may order the interest to be sold at auction. The single-member LLC is precisely the one with the weakest protection. Each U.S. state has its own rule, and Florida serves here only as an example with an official text.

Three tax precautions:

• •Privileged tax regime. Cosit Consultation Ruling 56/2026 (Solução de Consulta Cosit 56/2026) states, in its summary, that LLCs with a non-resident participant in the U.S., treated as transparent by U.S. tax law, are a privileged tax regime under art. 2, VII, of RFB Normative Instruction 1,037/2010 (IN RFB 1.037/2010).
• •Annual taxation. Under art. 5 of Law 14,754, the profits of a foreign controlled entity that benefits from a privileged tax regime (§ 5º, I) are taxed on December 31 of each year, at 15% (art. 2, § 1º), even without distribution.
• •U.S. filing. The foreign-owned LLC, treated as a disregarded entity, files Form 5472. The IRS instructions provide a penalty of US$ 25,000.00 for failure to file on time.

Does the trust protect against creditors?

It depends on when and how the assets went in. Some U.S. states have specific laws. Delaware provides, in § 3572 of Title 12, that the creditor may only attack the transfer to the trust in the cases of fraud under state law, that a creditor whose claim arose after the transfer must prove actual intent to defraud and act within 4 years, and that the burden of proof is on the creditor, by "clear and convincing" evidence. The law also provides exceptions, such as child support debt.

That text applies in Delaware. It does not guarantee what a Brazilian judge will do with the assets of a debtor resident in Brazil, and it does not displace Brazilian law on the subject.

For income tax, Law 14,754 does not treat the trust as a shield:

• •The trust's assets and rights remain under the settlor's ownership after the trust is created, and pass to the beneficiary on distribution or on the settlor's death, whichever occurs first (art. 10, I and II).
• •The change of ownership is a gratuitous transfer: a gift, if during life, or a transfer causa mortis (art. 10, § 2º).
• •Income and gains are considered the owner's (art. 10, § 3º), and a controlled entity of the trust is treated as held directly by the owner (§ 4º).
• •If the trustee does not provide the information, this does not relieve the duty to comply with tax obligations (§ 8º).

The practical conclusion: the trust can organize succession and administration, but it does not reduce tax or, by itself, create protection against a Brazilian creditor.

Does the holding protect assets from each company's debts?

Yes, as long as there is real separation. The holding keeps the equity interests in one company and the assets in another, and the debt of an operating company does not reach the others merely because the group exists: art. 50, § 4º, of the Civil Code says that the mere existence of an economic group does not authorize disregard of legal personality.

The limit is in the same article. The judge may disregard legal personality in cases of abuse, which art. 50 defines as misuse of purpose (using the legal entity to harm creditors or commit unlawful acts, § 1º) or commingling of assets (§ 2º). The law gives examples of commingling of assets:

• •a company that repeatedly pays debts of the member, or the reverse;
• •the transfer of assets or liabilities without effective consideration, except for proportionally insignificant value.

A holding without its own accounting, which pays the owner's personal expenses, is the classic example.

For tax purposes, the foreign holding you control falls under art. 5 of Law 14,754. An entity is considered controlled when you hold, alone or with related parties, more than 50% of the capital, or rights that ensure you a majority in decisions (§ 1º). The annual taxation rule reaches controlled entities located in a favorable-tax country or privileged tax regime, or that have their own active income below 60% of total income (§ 5º). A holding that only receives dividends and interest hardly passes this test, because dividends, equity interests, interest and financial investments do not count as active income (§ 6º, I).

When does segregation become fraud against creditors?

When the transfer happens while the debtor is already insolvent, or makes the debtor insolvent. It is the biggest source of problems, and it applies to all three tools.

• •Fraud against creditors (Civil Code). Art. 158 allows unsecured creditors to annul a gratuitous transfer of assets made by a debtor who is already insolvent or reduced to insolvency by it, even if the debtor is unaware. Art. 159 also reaches onerous contracts when the insolvency is notorious or the other party had reason to know of it. The action may be brought against third-party acquirers in bad faith (art. 161). The deadline to request annulment is four years, counted from the day the transaction was made (art. 178, II).
• •Fraud against enforcement (CPC). Art. 792, IV, considers fraudulent a disposal made when a lawsuit capable of reducing the debtor to insolvency was already pending. The effect is that the disposal is ineffective with respect to the enforcing creditor (§ 1º). If there is disregard of legal personality, fraud against enforcement is established from the service of process on the party whose personality is to be disregarded (§ 3º).

The practical rule: structure before the problem exists. Transferring assets after a notice, a lawsuit or an overdue debt you cannot pay is what the law targets. Structuring early, with a legitimate reason (succession, separation of business risk, governance) and fair value, is what it allows.

How do you choose between an LLC, a trust and a holding?

Start from the question you want to solve, not from the name of the structure:

1. •I want to separate the risk of a business or a property. Dedicated vehicle: an LLC or equivalent company, with its own accounting and bank account.
2. •I want to organize succession and administration for the family. The trust or the foundation solves this better, but remember that Law 14,754 keeps the tax on the settlor. For the foundation, see private interest foundation in Panama.
3. •I want to centralize several equity interests. The holding makes management easier, but it is the one that demands the most substance and accounting discipline to avoid falling into commingling of assets.
4. •I have a debt, litigation or imminent risk. None of them solves it. Talk to a lawyer before moving any asset.

In practice, structures are often combined, and each layer adds cost, filings and risk of error. See the corporate structures service and the succession planning service.

What do I need to report in Brazil?

Assets and equity interests abroad go on the Annual Adjustment Return (Declaração de Ajuste Anual). In addition, the Brazilian Capital Abroad report (CBE) is mandatory when, on December 31, the total of assets and amounts abroad is equal to or greater than US$ 1 million or the equivalent in other currencies. Add up everything you keep abroad and confirm in the CBE manual how to count equity interests in companies and trust assets.

Trusts existing before the law had to be reported on 12/31/2023 by their underlying assets and rights, at acquisition cost (art. 11 of Law 14,754). If you have a structure that predates the law, check how it was reported. For the obligations, see the compliance service.