 In
its simplest terms, going offshore means nothing
more than putting your money in foreign banks.
This is simply done to enhance its safety through
privacy protection and/or to get a tax free status.
Who is the audience
for this FAQ?
This FAQ is
designed for investors who are curious about how
to protect & grow their assets offshore.
What is asset protection?
Conventional
asset protection is not hiding assets, defrauding
creditors or evading income taxes. Asset protection
is the positioning of assets to make them unattractive
and legally unreachable by creditors, but available
for financial goals and needs.
Sound asset protection
does not encourage nor necessitate illegal acts
such as perjury or concealment of assets in violation
of law. The law itself recognises asset protection
as exampled by numerous provisions defining permitted
and prohibited strategies. It is certainly possible
to affect an asset protection plan legally. There
is no need to violate any law or regulation.
Even those with ethical
objections can still adopt an asset protection
plan and then if a rightful claim later arises,
surrender their assets.
What is the meaning
of offshore?
There are
two common meanings for the word offshore. Literally,
offshore means off or away from the shore. The Channel
Islands are offshore from England and France; while
Vanuatu is offshore from Australia. Offshore is also
used to mean "foreign." Swiss banks are offshore
relative to Americans; whereas Panamanian banks are
offshore relative to Swiss.
What is offshore
banking?
If a bank
is located in a foreign country does not make it
an offshore bank. An offshore bank must be specifically
licenced as such under appropriate offshore banking
legislation. Regular onshore banking is subject to
the tax rules, foreign exchange rules and charges
of whatever country the account is in. They are also
subject to foreign exchange regulations and are not
covered by the offshore banking confidentiality and
asset protection legislation. By the contrary, offshore
banking is tax free, there are no foreign exchange
regulations, and all account information is confidential.
Why offshore investing?
Offshore investors
obtain greater freedom than is possible onshore.
European & North American nations suffocate individuals
and institutions alike with complex regulations.
Thus, the likes of Barclays Bank and Bank of America
go offshore to reduce red-tape. Others go offshore
to simplify international trade. Thus, a German jewellery
might establish an offshore subsidiary to buy gold.
Still other persons and businesses seek privacy.
They want bank accounts in jurisdictions where it
is a felony for a banker to reveal that they even
have an account! By contrast, there is zero financial
privacy in Europe and America. In addition, many
go offshore for tax benefits. Some locales have zero
income tax, zero inheritance tax, and zero corporate
tax.
Do criminals hide
assets offshore?
Yes, they
do. Blackmailers, extortionists, drug dealers, and
corrupt politicians operate onshore everywhere, both
within and outside mainstream institutions. Criminals
hide their activities everywhere they can, including
offshore.
 Why
do law abiding people go offshore?
There are
many reasons:
- to increase personal
privacy
- to protect yourself
from invasive bureaucracy
- to protect against
frivolous lawsuits
- to protect your assets
from seizure
- to assist estate
planning
- to preserve your
assets for your heirs
- to protect a percentage
of your income from income taxes
- to protect a percentage
of your profits from capital taxes
- to protect capital
gains from capital gains taxes
- to delay any taxation
- to increase investment
diversification
Is going offshore
only for wealthy investors?
Going offshore
is like taking a vacation. Years ago only the very
affluent did. At the entry level, you can open an
offshore bank account in a pro-privacy locale with
about US$1,000 initial deposit. The cost to open
and pay annual maintenance fees for an offshore trust
or corporation is roughly the same as its onshore
counterpart. Of course, high net worth investors
have many advantages offshore and onshore which are
unavailable to persons with few assets.
Is it safe to go
offshore?
The world's
major companies and wealthiest investors think so.
A conservative investor can put money in foreign
banks that have top-rate credit ratings. More American
banks and savings & loans collapsed due to corruption
in the 1980s than in any other country. I live by
the maxim, "Investigate before you invest." Investing
offshore is as safe as walking across the street,
if you look in both directions first.
Who discourages investors
to go offshore?
Many persons
and institutions interested in your ignorance, including:
1) the national banking system, which is afraid you'll
transfer funds to foreign banks that offer better
services, 2) onshore accountants and money managers,
who are afraid to lose you as a customer, 3) credit
bureaus and database firms, which make money selling
data about you, and 4) onshore attorneys, who are
afraid they will be unable to confiscate your life
savings if your money is safely overseas.
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