“Going offshore” is a good solution for companies that do a lot of international business, and for people who want to protect their assets. Offshore banking in combination with having an offshore company guarantees maximum privacy and maximum flexibility.

What to do when you want that extra security for your business or wealth? The first thing to do is to start a company in a tax haven country. The most common form of such a company is an I.B.C, an International Business Company. The IBC is perfectly private. The owner of the company can appoint the employees and directors of the IBC while at the same time keeping their identities a secret. Shareholders are not obliged to reveal their identities, either. 

In case the owner of the company does not want to reveal his ownership to his home countries’ jurisdiction, a foundation may be created that will take over ownership from the person and in this way disconnects the offshore company from the person in question.

 The second step is to create an offshore bank account to make it possible for the IBC to conduct business and transfer money. It is highly recommended to open the offshore bank account in another financial center than the one in which the offshore company is founded. Separating the offshore bank account from the offshore company guarantees high levels of security and privacy. What is more, spreading the risks is usually considered a smart option in international business.

 Most offshore banks offer credit and debit cards that you can use from any location in the world. However, only use the ATM for rightful and publicly acceptable transactions, or else the credit or debit card may undo all the built-up protection of assets and privacy.

Step three, when the IBC is ready to rumble and the international bank accounts are set up, is to create a mailing address for the offshore company. An offshore mailing address is often referred to as a “maildrop”. Whenever the offshore company receives mail from the offshore bank or other entities, the “maildrop service” will forward the mail to any given address. The maildrop service makes sure that the mail is unrecognizably put in a white envelope, and thus you can have it sent to a mailbox close to your home or even to your home address.

We hope you can benefit from this information, good luck!

The main source for this information was www.offshorexplorer.com

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Andorra is not just another Offshore centre. In the first place, Andorrs is landlocked and in the second place, Andorra does not have an “offshore jurisdiction”. It does not have special tax regulations for banking or investment funds, it does not offer classical offshore products such as trusts. The reason it doesn’t offer these services, is becaues Andorra does not levy any taxes at all. No individual taxes, no company taxes, just some custom duties and local property taxes.

Because the Andorra jurisdiction states that all business and trading activities should be majority-owned by an Andorran citizen, the foreign investment is very low.

Investors can take advantage of the low tax climate in Andorra in two ways:

Although, in 2004, Andorra had to accept the EU’s Savings Tax Directive, the Andorran banks are still characterized by a very high level of secrecy. Banking business details are highly protected in Andorra. Numbered accounts are said to be known only to “the customer, the banker and God”. A withholding tax of 15% is imposed on returns on savings of EU citizens as of July 2005, of which 75% is channelled to the EU citizen’s country of domicile.

The Andorran jurisdiction, prescribing a majority of Andorran ownership in any business, does not make Andorra a good place for international trading. However, because of the absence of taxation, the liberal business environment and the high level of secrecy make it a perfect place to collect the proceeds of international business, especially if the entity that ultimately benefits is living in Andorra. A common structure is the triangular:

When operating from the basis of a high-tax country: the trading, licensing and investment operations are being carried out in a typical beneficial tax-climate of an offshore center such as Malta. The proceeds are then transferred to an Andorran company, which does not pay any tax at all. Thousands of Andorran companies have been formed in this way and with the purpose of benefiting maximally from offshore possibilities.

Read more about the Andorran jurisdiction at Offshore Legal and Tax Regime.

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Bankers often speak to the imagination of us, the average Joes, and offshore bankers do so even more. What is the typical profile of an offshore banker? Well, an example of a famous offshore banker is the Dutchman John Deuss.
John Deuss is a banker and oil trader who was born in the Netherlands but has since long been living primarily at Bermuda. Deuss is founder and owner of the offshore bank First Curacao International Bank (FCIB) at Curacao (Netherlands Antilles).
In 2006, Deuss was arrested because of allegations of massive fraud concerning the British Tax Office. Hundreds of British traders would have used his Curacao bank to evade taxes in the UK. The traders made it seem like they were selling chips and mobile phones so that they could get a return on their taxes from the British government.
Deuss is not only known in Western Europe, though. The Russians are also very familiar with and interested in the bankers, since he used to be good friends with Stephen Curtis, the man who was the owner of Russian oil company Yukos in 2004. The Russians also know Deuss from back in the 1970s, when he traded Russian oil to South Africa.
In January, John Deuss was released by the Dutch authorities. It is not evident why he was released. He had to pay a 2.5 million bail, which really isn’t much taking into consideration that his assets are an estimated 1,1 billion euro.

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Costa Rica, the Southern-most country in Central-America, has 4 million citizens. Costa Rica, besides having one of the world’s largest areas of protected rainforest, is developing as an offshore financial centre.
Until 1995, Costa Rica’s banking industry was a state business, but since the banks have been privatized, slowly but surely the positive tax climate in Costa Rica is attracting the world’s investors and rich & famous. Costa Rica cannot be called a tax haven, yet, but it is developing in that direction.
Low prices for Costa Rica’s traditional export products coffee and bananas have pushed the country to develop a fiscally attractive jurisdiction to attract foreign investors. With this goal in mind, Costa Rica developed so-called “free zones”, where taxes are extremely low to nothing. Big electronics companies- among others- have positioned themselves in these zones. Also, in 2003 fifteen software companies worked out a strategy to build out the role of Costa Rica in the IT sector.
The development of high-quality internet-infrastructure in Costa Rica has led several American companies to organize online gambling in Costa Rica. Thanks to a maze in the American legal system, the costs for setting up an online gambling company are relatively low. Therefore, the country is taking an increasingly important position in the online wagering industry. In 2000, a bookmaker bought a Costa Rican gambling site for 15 million British pounds. However, due to pressure from the United States, Costa Rica plans to increase the taxes on online gambling.
Although Costa Rica cannot be called an offshore financial centre yet, the free zones that were established in the country are attracting a lot of business and industries. Offshore banking, though, is still in the beginning stages and insurances are still not privatized. The amount of banks is growing and the prospects are that this trend keeps on going.
Costa Rica is a promising financial hub, so be sure to keep updated on the developments of this green paradise in Central America.

Source: www.bespaarbelastingen.be

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The IMF, the world’s monitor of the financial industry, has recognized the need to assess Offshore Financial Centres (OFCs) more closely. The main reason is that, according to the IMF, OFCs make up a significant part of global financial flows and because they have ties with other financial centres they can be very influential in many countries’ economies.

In July 2000, the IMF set up a plan to incorporate OFCs in the global assessments of the financial sector. The aim is to strengthen the financial supervision of OFCs and thus to ensure that OFCs comply with international rules and agreements.

The assessments and reports on the OFCs can be read at the IMF website.

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Investing beyond the borders of your jurisdiction, which is also referred to as offshore investing, has quite some advantages. We will name a few here, together with some of the disadvantages of investing abroad.

Offshore investing makes up more than half of the world’s financial investments and is therefore quite significant. Offshore investing has the following advantages:

Confidentiality. Many wealthy persons investing in stocks and companies are not happy with publicity with regard to their moves. Other people might take advantage of their exposed knowledge, thus making it less interesting for the person in question to make a certain investment.
Confidentiality is not just important for unethical business, money laundering or drug trafficking. It is simply an important aspect of life to many people.

Asset protection. Offshore investment centres are popular places to redistribute income. Assets can be transferred to funds and family, without having to pay extra taxes or follwing complicated legal rules in the home country.

Tax reduction. Many of the popular jurisdictions to invest in offer significant tax reductions to foreign investors. However, the US as well as the EU jurisdictions are well aware of the tax reductions that are applicable to their richer citizens, and are therefore trying their best to prevent citizens from investing offshore, accusing them of tax evasion and considering tax evasion illegal.

Diversification of Investment. Offshore investment centers in general offer much more than the national banks and financial institutions. An offshore bank or investment centre has access to the world market and givs you the opportunity to trade in whichever currency you prefer. Any stockmarket is open for yur investments.

There are some disadvantages to offshore investing:

Cost. Investing offshore is pretty costly. Most banks require a minimum investment of between $100.000 and $1 million. In addition, there are rules in certain offshore centres that require proof of residence in the jurisdiction, which means that you would have to invest in property as well. In other cases, setting up an offshore corporation might be compulsory, leading to high investment fees for just the initial stages of investing your money.

Tightening Tax Laws. Many jurisdictions are now trying to prevent their citizens from offshore investing. The main reason is that they are losing on income, as taxes did not apply to foreign investments. Since 2004, however, the US has significantly reduced the possibility of tax evasion, by making it possible to collect taxes on worldwide assets of American citizens. The Internal Revenue Code (2004) has also made it much more difficult to profit from tax reductions in offshore centers.

Safety. Like in any business, offshore investing carries a certain risk. Be sure to do some research and to invest in a reliable and well-recognized company. Hire a professional to give you advice, but count on steep prices for these people. Also include the costs of travelling for you and your money and advisors, commission fees and professional fees.

Read more on Offshore Investing at www.investopedia.com

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Monaco is still among the tax havens that are named “un-cooperative tax havens”. In 2002, Andorra, Liberia, Liechtenstein, the Marshall Islands, Monaco, Nauru and Vanuatu were on the list of un-cooperative tax havens. Most countries managed to get themselves off the list, but Monaco stayed on the list, together with Liechtenstein and Andorra.
Being on this black list, Monaco feels stigmatized. Jean paul Proust, Minister of State, says: “It is not fair. We want to shake off the image of a tax haven. It is not really a tax haven. Companies pay taxes in Monaco.” He adds that Monaco will fully co-operate in criminal investigations involving tax “But we care about banking secrecy, if there is no penal offence.”

Monaco’s commitment to the banking secrecy is not motivated by the unwillingnes of the wealthy to pay taxes, but rather by the fear of extremely rich people that their financial information can fall into the wrong hands, meaning unsafety and higher chances of kidnapping and robbery.
Read more about the state of Monaco at the website of the Financial Times.

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Professor Dr. Hans Geiger is Professor of Finance at the Swiss University of Zürich. He is head of the Swiss Banking Institute at this university. Prof. Dr. Geiger is a member of various renowned organizations in Europe that are all related to finance or banking. In the video below, Professor Geiger describes the essence of private banking and the competitiveness of the Swiss banking center.

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Take back what we said in September. This week’s nauseous lurch by UBS highlights the fact that, no matter how cosy they look, even the the big Swiss banks are not immune from globalisation. Credit Suisse are none too happy either, also reporting “adverse results” though nothing as as spectacular as UBS’s hiccup.
The rot began some weeks and months ago with the US subprime mortgage crisis, and the knock-on effects manifested themselves over the pond at the UK’s Northern Rock; the long queues that formed outside its branches were an uncomfortable echo of the 1929 crash.
It wouldn’t be long before the credit crisis spread. On Monday, UBS announced a third quarter loss of 600-80o million Fr - that’s around half a billion dollars - news that sent investors scurrying in panic.
Overall, it was being forced to write off $3.4bn dollars. That’s about the GDP of Laos or Moldova. To be fair, the bank was swift to act, CEO Marcel Rohner immediately slashing jobs and implementing a management shake-up:

Our first quarterly loss in nine years is an unsatisfactory result, especially after such a strong first half. I have therefore taken decisive action to be as transparent as possible. I have also made appropriate senior management changes, and will accelerate already-planned changes to the firm.

Shares have also rallied since Monday, assuaging investors’ initial worries. Some commentators, such as Forbes, even see events in a positive light, suggesting that following the clean-up, now is a great time to buy into UBS. But how the news will affect longer-term confidence remains to be seen.
The whole point of offshore banking, other than the tax savings and high interest rates, is to steer clear of economic tremors in one’s own country. Switzerland may well have a reputation for being insulated from the world outside by impassable mountains and equally inviolable political neutrality, but these losses at UBS are a sharp reminder that no offshore bank can completely hide away from today’s global economy.
Reuters reports here.

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The Bahamas is an island group just east of Florida. The Bahamas were a leading offshore financial centre until the late 1970s, when its popularity started to decline due to accusations of money laundering practices and allegations of unfair tax competition. The Bahamas are more popular among Europeans than among Americans, because American citizens cannot benefit from tax advantages in the Bahamas because it is American soil. Americans are taxed on the basis of citizenship and not on the basis of residency.

In addition, the Bahamas’ jurisdiction did not sign the European Union withholding tax and exchange of information Directive. This means that the Bahamas offer European citizens more tax advantages and secrecy than other offshore banking jurisdictions that did sign the EU tax withholding directive.

Recently, the Bahamas made legislative changes that make it easier for banks to set up investment funds and foundations. These changes will probably lead to a rise in popularity of the Bahamas as a tax-haven and offshore banking centre. Find offshore banks at the Bahamas at www.qualisteam.com

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