The Top 12 Offshore Banking Myths Debunked |
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| By: Doug Snarder | ||||
Banking offshore is just too much trouble for the average guy -- If you tried to setup your offshore banking structure yourself without the aid of an offshore professional this would certainly be true. Today, however, an offshore bank account owned by an offshore company is commonly done and only takes about 5 days. Since governments around the world have been moving to tax individuals on their world wide income, an offshore bank account is usually setup with a bearer share corporation and/or a foundation. Only a rich person can afford an offshore asset protection setup -- This is totally false. The basic package, which is adequate for 90% of clients, costs less than $2000 US. The basic package includes an offshore bank account and a Panama bearer share corporation. It has proven time and again to be a very solid protection mechanism for our clients and is very useful for tax planning as well. Because of 9/11 bank secrecy has been eroded severely -- It is true that the MLAT treaty has been adopted all the offshore jurisdictions pretty much, BUT what most people don't understand is that this treaty only allows for co-operation in crimes. The issue under investigation must be a crime in both countries and the requesting country must produce evidence that they have a strong case against you. Also the activity must be a crime in in BOTH countries. Tax evasion is not a crime in Panama for example, and as such the Panama government would not co-operate with an MLAT requests under those circumstances. You must visit the offshore jurisdiction to open a bank account -- This is the case with some Swiss banks. Without an introduction in some offshore jurisdictions you can't get a bank account. Many banks in Panama work in this way. Fortunately, your offshore professional can provide the introduction necessary. Most clients don't even realize this is taking place in the background. They simply place their order and in a matter of a week or so they have an offshore corporation and bank account. The MLAT treaty has ruined the effectiveness of offshore jurisdictions -- This is true for any major criminals. Requests made through the MLAT treaty must be a crime in both countries (Tax evasion is not a crime in Panama for example.) The requesting country must show that it has strong evidence and is not on a fishing expedition. There is a great deal of flexibility in the treaty. The requesting country cannot force co-operation. If a country like Panama doesn't think the case has merit, they can keep asking for more documentation, or simply deny the request. Panama, for example, doesn't like co-operating on minor crimes. Tax treaties now allow most governments to share information freely -- Sadly this is true for many countries, but it is not true of serious offshore jurisdictions like Panama. Panama has NO TAX TREATIES WITH ANYONE! Someone will find out about my offshore bank account -- Not if you don't tell them. Most offshore accounts are managed over the internet using secure encryption. This is the same encryption used by banks and e-commerce sites around the world. It is secure, trusted, and well tested. Offshore banking won't protect me in a lawsuit because the court will order that I bring the funds back. -- If you setup your asset protection plan before you get sued you are well protected. Once you donate your money to an offshore foundation, for example, they money is not legally yours to get back. The judge cannot order anything illegal. If legal proceedings are already under way and you move the funds you might be charged with fraudulent conveyance. There are ways to avoid this, but it is beyond the scope of this article. Someone will be able to track the money to its offshore destination -- It is true that if you send a wire to an offshore bank their will be a trail. This is avoided by first wiring the money to another offshore bank usually in another offshore haven. For example, the money is wired to a bank account located in Belize and then wired again from Belize to Panama. Now someone would have to break Belize bank secrecy to even know what country the money is now in. This is very strong security. I can use my offshore bank account to do everything I currently do with my onshore account. -- There is one thing you can't do with an offshore bank account. You can't pay bills online. This is the only feature lacking from most offshore accounts. This is easily rectified by an good offshore asset protection plan by making a portion of the money available in your onshore account. This also brings up another feature that deserves mentioning. Most offshore bank accounts come with a cash card that can be used to withdraw funds anywhere in the world. The card only traces to the corporation which is often a bearer share corporation (meaning the ownership of it is anonymous) Americans, Canadians, and Europeans can't own an offshore account legally -- This is totally false. This mis perception is based on the fact that these jurisdictions now require an individual to report his/her worldwide income. Offshore bank accounts almost always come with a bearer share corporation or a foundation, which means the individual does not legally own the money. When the money is paid from the corporation to the individual then it becomes taxable income. |
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| Article Source: http://yourfinance.co.za | ||||
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