SovereignLife Freedom Blog

A reader forwarded me some information on a piece of US legislation – boringly entitled the “Hiring Incentives to Restore Employment Act” (H.R.2487), or more commonly known as the HIRE act – which could have serious implications for US individuals seeking to open an offshore bank account.

I won’t repeat it all here, but suggest you have a read of the original blog post I was referred to.

My thinking on this is as follows: The primary intent of this bill is to force ‘offshore financial organisations’ to withhold funds and provide information on US clients. In other words, placing yet another burden on offshore banks etc. to comply with onerous regulations when it comes to their US clients.

The most likely consequence of this will be such banks and financial organisations simply refusing to open accounts for US citizens – as it won’t be worth their trouble.

Does this legislation represent to introduction of capital controls? Not in the strict sense – but more a clandestine way of discouraging the movement of funds offshore.

I’ve received a number of emails from concerned readers and members as to the likely effect of this and will say the following: first and foremost, this is just a continuation of totalitarian policy of the US government, which will likely get worse as economic conditions get worse.

Yes, as with Swiss banks right now, most overseas banks will want to stay clear of American clients. So what options remain?

I would imagine that there will still be certain offshore banks that will accept funds – as a result of seeing an opportunity created by other banks who refuse such clients. Of course this will not provide any financial privacy, but it will provide a location of funds outside the USA.

Another more useful option would be to move one’s funds out of the country by purchasing gold bullion. This type of account is currently non-reportable and sending funds overseas to buy such gold is perfectly legal (at present!)

So if I were an American, I’d be moving on this now, and getting my available cash out of the USA by purchasing gold for storage outside the US. Don’t forget, in the current economic climate gold is money.

Is offshore banking legal? This is a question often asked these days, as various nations seek to clamp down on offshore tax havens and offshore banking. And while such banking may raise eyebrows in certain quarters, or invite disapproving comments from politicians seeking to balance budgets and maximise tax revenue, the fact is banking offshore is perfectly legal.

However, it helps if one first clarifies the situation by defining the words “offshore” and “tax havens”.

Offshore simply means some place other than your home country. So if you’re in the USA, then having a bank account in the UK would be considered offshore. Or if you live in Australia and have a bank account in Singapore then that would be an offshore bank account. Neither of these places are known tax havens of course, but never-the-less they would be considered “offshore” if you banked there but didn’t live there.

So while an offshore account may very well be in a tax haven, it doesn’t have to be.

There are various negative associations with the term “tax haven”, as such countries are widely perceived to be places where unsavoury characters do shady business dealings or worse, engage in money laundering. But the truth is, a tax haven is simply a country where either no income tax is paid, or less tax compared with other countries.

The motivation for a country to become a low tax or no tax haven is usually to gain some competitive advantage. They do this by offering financial and incorporation services designed to attract foreign business – and boost the local economy. And this is usually the essence of the hostility towards such places. Most developed Western countries have a large socialist component to their economies, where high taxes are used to fund various social welfare programmes. So when some countries lower or eliminate their income tax it naturally attracts those who seek to pay less tax – both companies and individuals.

The fact is, any sovereign nation has the right to determine its own tax rules and the rate of tax they seek to impose. And it’s perfectly natural for there to be tax competition in the world. Without it, nations would find no barrier to raising taxes and would no doubt exploit all of us in the process. Low tax and no tax nations provide an important counterbalance to the high tax countries and the existence of such tax competition is healthy and should not be discouraged.

So if you see the advantage of banking in another country – offshore – then you are certainly free to do so. And provided you live in a country without currency exchange controls – which is most of the developed world – then transferring your funds to an overseas bank account is a simple matter, and like I said 100% legal. However, there can be complications – if you don’t know your own country’s rules and regulations.

Give you one example. If you’re a US citizen or resident, then you are obliged to report the existence of any offshore bank account with a balance of $10,000 or more – the existence of accounts where the aggregate balance is over $10,000. You’re allowed to have as much money as you like in the account – but are required to report it. Most other countries do not have this requirement.

Another example would be the existence of various funds transfer reporting requirements. These vary from country to country, but let’s say you wanted to transfer $50,000 from you domestic bank account to an offshore one – then it’s highly likely the transaction would be reportable by your bank, meaning they would have to notify the relevant authorities that it has been done.

Given these potential reporting requirements another obvious question would be, “So what are the advantages of banking offshore?”. And the potential answers are many. It could be to seek more security, more financial privacy, to diversify currencies, or that overseas business dealings make having such a bank account necessary.

Having access to foreign currencies is becoming increasingly useful, given the wild fluctuations between the value of such currencies. Right now, for example, the USD is on a long term downward trend, due to the negative economic fundamentals affecting the country. This means that anyone inside the USA, whose funds are exclusively in US dollars, is likely to see the value of their savings erode over time. Holding such savings in another, stronger currency would be a rational decision, and using an offshore bank to achieve this would be a sane financial strategy.

At the end of the day, given the increasing global nature of living and business, it’s perfectly natural for people to consider opening bank accounts in other countries if they can see any personal gain to be had from it. And as long as that demand exists there will always be ways to bank offshore.

One of the primary benefits of being a member of SovereignLife is that it puts into your hands ready-made solutions.

Today I just want to look at one such solution – the answer to the question: “In today’s economic environment how can I invest for a good, reliable monthly return?”

Let me introduce the Black Label Freedom Action Pack. This is an all-in-one solution to investing offshore which includes the following:

1. An offshore corporation and bank account
2. A corporate brokerage account
3. A corporate passive income

The passive income is generated by reliable, long term managed forex accounts – showing monthly average returns in the region of 5% to 10% … and more.

What does it cost to get started?

To get your offshore structure fully set up it will cost you in the region of $1,600 to $1,950 – depending on the jurisdiction the company is registered in (Seychelles, BVI, Panama, Belize, St Kitts or Dominica). Add a further $300 for a full nominee package and a Swiss corporate bank account.

You will also need investment capital – a minimum of $20,000.

As a SovereignLife member you are also entitled to a free ‘hand-holding” mentorship valued at $799 – to get you through the entire process.
This complete package is now available to our Gold and Platinum members.

If you’re already a member, simply login and click on the Freedom Action Packs link to download the complete PDF overview.

And if you want to become a member in order to access this package, then you need to join at the Gold or Platinum level from this link.


Recently I’ve been getting a lot of emails from Americans, the general gist of which is: “Seeing as the US tax authorities are aggressively going after Americans who have offshore bank accounts, does it not make acquiring such an account a waste of time, or worse a criminal offence?”

In order to answer that question I first need to clarify something. The US authorities are indeed going after those who have unreported offshore accounts – those who are seeking to hide funds in such accounts.

However, what is vitally important to understand is that offshore bank accounts are not illegal. It’s just that if you’re a US citizen or resident you need to report its existence – if the balance of funds in the account exceeds $10,000.

So if you report it, doesn’t that do away with any of the advantages? Fair question – but the answer is “no”.

Sure, being a US citizen/resident does put you into a class of your own (having to report the existence of offshore accounts), compared to citizens of other nations – but that’s all par for the course these days, as Americans are fast losing their freedoms.

However, there are still a couple of very good reasons why you should still open an offshore bank account – regardless of the requirement to report it.

1. An offshore bank account provides a “safe haven” for your funds – out of reach of the government. Provided you stay “legal” and report, you are perfectly entitled to move all your cash offshore if you want. And the advantage is it will be more secure.

2. With the slow-but-sure slide in value of the USD (a necessary situation given the USA’s indebtedness), you need to diversify out of the $US. And the best way to do this is to open an offshore bank account where you can easily hold funds in multiple foreign currencies. This gives you an opportunity to hedge against the falling dollar by moving your funds into a currency (or currencies) that is doing better.

3. Even though US citizens/residents have to report the existence of such accounts (if over $10K balance), this does not completely obliterate your financial privacy. Once you have funds in such an offshore account, you are able to move it around, pay for stuff, fund a brokerage account and do all sorts of things – without those transactions being known or reportable in your home country.

All in all, my advice to Americans is to take up this legal option – to move funds offshore and into an offshore bank account – while there is still time!

Given the state of the US economy, it’s not inconceivable that in the future moving such funds may become impossible.

And if your second question is “how do I find, choose and fund an offshore account”, then I refer you to my two reports:

The 10 Things You Really Need To Know Before Opening An Offshore Bank Account – an overview of offshore banking and the basics you need to know.

The Ideal Offshore Bank Account – my personal picks for offshore banks, based on my own considerable experience.

One of the often-overlooked advantages of having an offshore asset protection strategy is in how it can enhance your ability to protect what you have – by placing ownership of such assets in a jurisdiction other than your home country.

If you have a positive net worth or any valuables to protect, then you do need a good asset protection plan – something which will offer you peace of mind as well as effective protection for what you have worked hard to achieve.

In collaboration with APGI, S.A., SovereignLife has published a concise 10 page e-report entitled Asset Protection And YOU! – a primer on offshore asset protection and why you need it.

It provides an excellent introduction to this subject and is available for immediate download free of charge.

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.

This past couple of weeks I’ve received at least three emails from people saying they now believe offshore banking is illegal, and asking why am I still talking about it.

Of course it is not illegal. Never has been. And when you realise what offshore banking really is, you’ll also realise that expecting it to become “illegal” is incorrect.

An “offshore” bank is simply a bank in a country other than your own. If you live in the USA, then a bank account in Canada is considered “offshore” – to you.

The simple rule for defining offshore – as it relates to your own activities – is to consider any bank account in a country where you do not have residence to be offshore.

In order for offshore banking to become illegal it would be necessary to ban the opening of bank accounts by non-residents. This would cause serious inconvenience to many people and organisations.

To give you a typical example of how offshore banking works for those who are not even interested in “offshore” – consider this typical example: many young people go on long global holidays as backpackers. Many countries make this possible and easier by granting special visas for such a purpose.

One example is that between the UK and New Zealand – which have reciprocal arrangements to allow young people (under 30 I believe) to get 12 month holiday visas. Now, one of the things these young people want to do is to open a local bank account while they are there – which they do.

So here is a clear example of a non-resident opening an account in another country – “offshore” banking in other words. If such arrangements were illegal then the young people I’m talking about would be unable to open bank accounts in their temporary host countries.

In fact, when I was in NZ recently, I noticed how it was possible to have a bank account opened in the UK before even travelling there. Offshore banking again.

Another example of “offshore” banking would be where a foreign corporation sets up business in another country. Naturally such a company would want to open a local corporate bank account. If such banking arrangements were illegal, then it would but a severe restriction on the activities of such companies.

No, opening an offshore bank account is not illegal. But what gives that impression to some is the hot air emitting from the mouths of populist politicians – who find it in their interest to lambast offshore banks as a way of diverting attention from their own country’s economic shortcomings.

Much has been made recently of the USA’s demand that the Swiss hand over information on the 52,000 Americans who have Swiss bank accounts – and the imposition of a fine of $780 million last year, regarding account holders with UBS AG.

This, and ongoing efforts by the USA and EU to “stamp out” offshore tax havens, has lead the Swiss to implement defensive measures of their own – and to now refuse to open accounts for US citizens.

Who can blame them? The cost of doing business with Americans has simply been raised too high, and threatens to compromise the famed Swiss banking security and privacy.

Private banking is one of Switzerland’s unique contributions to the world (apart from fine chocolate and the famed watches), and it would appear they are not about to relinquish an essential feature and benefit of their “brand”.

Perhaps the Swiss have rediscovered their backbone – as this article gives cause for hope.

Every week I receive at least two or three emails from subscribers to my list, asking for my advice or opinion about some offshore bank or other that they have been asked to use in regard to the deposit of some excessively large amount of money – usually in the millions.

I immediately know the writer is the potential target of what is known as the advance fee scam. In essence this is a process whereby someone receives an email advising him or her that there is a large amount of money awaiting them – either a winning (lottery), an inheritance, or an offer of sharing in the proceeds of a major financial transaction – in which the writer mysteriously requires your assistance.

The more recent incarnations of this scam involve the use of bogus offshore banks – banks which sound legitimate, but which are but figments of the scammer’s imagination.

What usually happens is that the hapless “victim” is advised that say $10 million is awaiting him, and that he needs to open an account with this bank (online) in order to receive the money.

The scam target willingly complies, but becomes dismayed when asked to send funds in order to process the deposit. There are various explanations for these “advance” fees – usually to do with anti-money laundering compliance issues, or tax issues, or simply some outrageous processing fees that have never been heard of before. Whatever the fees are, it is never possible to have them paid out of the money you are supposed to be getting.

Either way, the target is being asked to send funds – perhaps $2,500 to start. Trouble is, once someone sends this lesser amount he digs himself deeper into an emotional commitment to the scam, and is ripe for being asked for more money down the track – which is always the case.

So each week it is my thankless task to advise such people that in reality there is no “winnings”, no “inheritance” and certainly no real money awaiting them.

You’d think most people would be grateful for the warning (especially if they have not yet sent any money), and most are. But recently I’ve also had the experience of receiving replies to my warnings from some individuals that show a stubborn unwillingness to believe what I’m saying – and an irrational belief and faith in the scam.

Bottom line is, scammers make money from gullible people or people in financial distress. They don’t show up with a gun and demand money (like the government) – they ask nicely and win your confidence. And unfortunately the world is full of potential victims – which is why this scam never dies.

Today a member of SovereignLife (a professional in the offshore services industry) posted a warning in our member forum regarding an apparently fraudulent offshore bank. Here is an excerpt …

“Last week a client who purchased an offshore company from my firm contacted me concerning First Oceanic Bank Ltd. In lieu of spending $350 for a proper introduction to a strong, recognized, compliant offshore bank with my company he used the services of this alleged Bank. the client was drawn in by the fact that the bank was offering a 9% return on investment account. Over the past several months this bank has been excessively promoting their services. Offering debit cards which are supposedly anonymous for a mere €50 as well as quick bank account opening services. The client forwarded €100,000 to his account with FOB. because the client never heard from the bank concerning his deposit, he contacted the sender bank. The sending bank verified that the deposit had been placed on the so-called master account of FOB. He then contacted the alleged bank and requested information on the deposit. He was told that the funds had never made it to their account, and hours later the website was down.”

I’ve heard of this “bank” before, and members have asked me about it. My response was always the same – do not use this bank. To me, the interest rate being offered, the Somalian banking license, and the lack of information as to who is behind the bank are warning enough.

However, it would appear that in this world, where financial privacy is under constant attack, there is a ready (and gullible) market for any “banking” service that pretends to offer such anonymity and privacy.

Take it from me. It’s not worth the risk. Stick with tried-and-true legitimate offshore banks. There are plenty of them. Do not risk your hard earned money on some desire for “privacy” and with any web-based, self-proclaimed “bank” that can turn out to be a scam.