Offshore Banking And The OECD
Earlier this year the OECD published a black list and grey list of non-compliant financial centres around the world. Non-compliant in the sense they were unwilling to share client information with other member states regarding tax reporting issues.
With Austria, Belgium, Luxembourg and Switzerland now having caved in to the new requirement to share client information for taxation reporting purposes, the pressure is on the remaining smaller “non-compliant” states to fall into line.
As a result of these recent moves I’m often asked how these changes affect the much-vaunted banking privacy that offshore banking provided.
In the “good old says” – pre 9/11 – one could definitely gain financial privacy by having an offshore bank account, and such was often guaranteed and enshrined by specific legislation to ensure such privacy (as in Switzerland).
Now that is all under fire, what are the advantages of having an offshore bank account, if financial privacy cannot be guaranteed?
It’s a good question. Fortunately an offshore bank account still offers considerable benefits – quite apart from financial privacy.
First, if you’re not liable for income tax (say you live in a tax haven with no such tax, or you are not a “resident for tax purposes”), then this latest rounds of intrusive legislation will not much affect you. If you don’t owe any income tax, then there is nothing to report.
Second, an offshore bank account still offers considerably more security than a domestic one. If you don’t know already, most governments can dip into your domestic bank account and withdraw funds without your consent – for all sorts of reasons. Leaving your funds on home turf is not the soundest of financial strategies in the modern world.
Third, an offshore bank account gives you much greater access to other currencies, and often enables you to hold multiple currencies in one account. This ensures you can hold your savings in currencies other than your home country – a very desirable goal if your own country’s currency is headed “south”. By diversifying your cash holdings into different (and stronger) currencies, you can go some way towards protecting what you have from the ravages for government instigated inflation (read currency debasement).
Fourth, an offshore bank will often be safer as well. Given that most offshore banks are not in the business of mortgage lending, their balance sheets may be more to your liking – and your funds ultimately more secure.
So while the OECD would definitely like to scare the pants off you in regards to banking offshore – and hopefully prevent you from doing so – there are many sound reasons why you should go ahead and do it anyway.
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Hi David,
Perhaps I’m overly cautious but…my concern about offshore accounts is about the reliability of the internet. If things got really shaky in the US I can imagine the internet and even phone service being unavailiable – perhaps for some time. What good does my money do me if I can’t get to it?
Well, there’s always the post
Every offshore bank will accept signed instructions by mail – so if you needed funds, you’d simply send a letter to request the same.
Things cant get shakier than they are in the USA right now. Your dollar is in a nosedive. Sir Robert Mugabe seems to be your presidential mentor, a single sheet of toilet tissue will be worth 10 dollars by 2010. Backtrack Obama is all pish and wind, he’d make a hash of running a public toilet. I see no way back.
Nixon magic saved the dollar by floating it to market. I see the reverse. The soviet system can’t work, without financial privacy keynesian money systems collapse rapidly. The IRS is knowingly doing just that, with OECD collaboration they’re collapsing the dollar intentionally.
Medications I sold for $25 at a profit, sell for $75 to break even in 6yrs.
A Zimbabwe clone is the future you’ve chosen for your beautiful country. I wish Americans the very best of luck, but see on gloom and doom with this regime of commies and bleeding hearts. May providence save you from the lunatics running the joint. Best of luck, maybe he’ll quit.
Do gooders and missionaries of the world.
Dear David,So if we do not have a residency, which bank is the best for us to put money into? Carribean or Lichenstein or ????
Lynn, first you most definitely need a residency of some sort to open an offshore bank account. Part of the account opening procedure is to require both photo ID and proof of residency. This proof is usually required in the form of a utility bill (like phone or electricity) in your own name, and showing the address under which you are applying for the account.
As to the best place to bank. My own thinking and strategy is that Asia is the place to be – as I don’t believe they’ll “bend over” as much as Caribbean or European banks.
Hi David,
Wealthy I am not. If I were – or had just enough savings to want to put them at arm’s length I would be doing so. My point is (crazy as it may seem to many) I more angry with government control and interference than I am worried about my savings, if that makes sense. My chief motive would be to get away from them all. I have long held the belief that Seychelles is the place to get an IBC or one of their land-based company registrations. Is this one “on” or “off” your list of good ones, and have you written about the prospects there?
Regards,
Dave
Dave, the Seychelles is definitely a jurisdiction worth considering – and our recommended offshore services provider sas some good value packages (IBC and related bank account) available – with additional and worthwhile discounts for SovereignLife members. For more information click HERE.
Should you have your pension and or social security electronicly deposited in an off shore account? What off shore banks are the safest? Which country have no taxes on bank accounts? How do you get started?
David, you recommended Asian banks. Is there a particular bank(s) you recommend. Also, my experience (US) is that you need to be present to open an account.
Generally you need to be present to open a corporate account, but not a personal account. However, if opening a corporate account this visit can often be avoided by using an agent with a good relationship to the bank. For some suggestions on corporate banking, where no personal visit is required, you can take a look HERE. My own recommendations for a personal offshore account are contained in my report – The Ideal Offshore Bank Account.
You will not be able to get a pension or social security payment made to an offshore bank. Please see my other comment regarding my personal recommendations for an offshore bank account.
I can only approve what Dave said. Going offshore is more a way to get government off your back as to save taxes. The OECD war on offshore and privacy could produce the opposite effect as expected. if (personal) offshore accounts are no longer safe from the taxman, people will simply buy physical gold instead of holding cash. This is practically untracable and inflation safe. Or they will switch to the B Plan: expatriation. This is in fact the easy way to escape government control and confiscatory taxes. Even for US citizen. Fighting the system doesn’t make sense. As David said in a previous post: they have the guns.
In my opinion, the difficult part of opening a corporate offshore account is to get a “letter of reference” from your bank. All banks require such a letter to open an account. At the same time, many of them are refusing to issue reference letters to their customers. Or you have to name the recipient bank. Has somebody a solution to this problem? Can you recommend banks that don’t require a bank reference for a corporate account?
I also am looking into gaining a personal account as well as an IBC account but when I inquired for a form to fill out , I was totally lost with names and information that I know nothing about such as directors, and the like. The form was downloaded from your September 14 Letter but my question is can you break down some of the terms on the form that I will have to fill out to open a personal privacy account or a lifetime member asset protection account.
Regards,
RUGGED HARLEY
Rugged Harley, if you’re talking about any forms associated with APGI, Inc. – as per this page – then I suggest you contact them directly for clarification.