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12 Offshore Banking Myths Busted |
By:
Doug Snarder |
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12 Offshore Banking Myths Busted
by Doug Snarder
Offshore bank accounts are only for spies and criminals and money launderers -- Although no-one can claim that criminals don't use offshore bank accounts, their uses in this regard have been severely limited due to the MLAT treaty. In fact, many fortune 500 companies now bank offshore to protect their assets and to gain competitive tax advantages.
Offshore banking is too complicated for the average Joe -- This is actually true if the average Joe were to do all the legal work himself. Typically an offshore bank account is created in conjunction with an offshore corporation due to many governments taxing worldwide income of individuals. This sounds complicated but a good lawyer will have the entire package done in less than a week.
Its not worth going offshore unless you are wealthy -- Since it costs less than $2000 USD for an offshore bank account and a bearer share corporation with all the trimmings, offshore banking is within most people's reach. It is a very strong vehicle to protect your assets from lawsuits. Every business owner should have an offshore bank account and offshore company. In today's lawsuit happy world this is just good business practice.
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 have to visit the offshore jurisdiction where the bank is located. -- This is not true. Everything can be done by phone, fax, email, and courier by an offshore banking professional.
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 information is shared between most countries now -- It is true that many countries have entered into tax treaties, but other more reputable offshore jurisdictions have not. Panama, for example, has no tax treaties with anyone.
The authorities will know if I use an offshore bank account -- That is simply not true. E-commerce and banking all over the internet today rely on secure online encrypted communications. The largest banks in the world use it and it is completely secure. It is impossible for anyone to see what you are doing. Companies like findnot.com can add a second layer of security for those who feel they need it.
Offshore banking doesn't protect me from a lawsuit because the judge will just order me to bring the money back. -- If you were to open a personal bank account offshore this would be true. However, an offshore bank account is typically owned by a bearer share corporation and or a foundation. In the example of a foundation, if you donated money to the foundation you cannot get the money back. The foundation can only give money to the purposes set in its governing documents. That does not include giving money to you. Basically the money is out of your control legally speaking and so you can't bring the money back.
If I move money offshore, someone will be able to track down where it went -- If you were to wire the money to its final destination directly that would be true. Clients concerned with this usually move the money to a intermediary bank in another offshore banking haven. For example, they will wire the money to an bank in the Cayman Islands, and then rewire the funds to Panama. Someone coming after the money would have to break the Cayman Island's bank secrey to find out the money is now in Panama. This is not likely to happen and you would likely have plenty of time to move the money to a third or fourth jurisdiction. Because authorities know that, tracing money is only done is high profile cases.
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)
It is illegal to use an offshore bank account -- There is no doubt that you could use an offshore bank account to do something illegal, but opening up an offshore company and bank account is 100% legal. In fact many fortune 500 companies keep much of their assets safe in offshore countries.
If you have a business or have assets that you don't want to lose to an angry spouse or a legal battle consider reading more of Doug Snarder's teaching on the Offshore Banking Account and Offshore Asset Protection This article is available as a unique content article with free reprint rights.
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Article Source: http://www.statssheet.com/articles/article54533.html |
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