How to compare offshore jurisdictions

Today many unscrupulous firms are offering corporations and bank accounts in many different jurisdictions with a shopping list of countries available, almost all of them are no good anymore, many are located on Caribbean islands and are deceiving customers by making them to think that they are true offshore jurisdictions with privacy benefits. Mistaken!!!

Let’s discuss some things to consider when purchasing an offshore jurisdiction.

Bank Secret – Without this we are not interested. We want the bank to not be able to disclose any information about the bank account, even if the bank account exists or not, unless there is an order from a competent court in the country where the bank is located. More secret than this does not exist anywhere today. The numbered beads are gone. All the Sparbuch accounts in Austria are gone, yes I know people offer them for sale on websites but they are long gone and closed. Bank secrecy laws must be written into the law of the country in question. Belize has no such bank secrecy laws written into their laws, people seem to trust them even though there would be no legal penalty on them for disclosing bank information if they see fit. We want bank secrecy laws to require prison and civil penalties for any violations, as well as allow a lawsuit to be filed against the bank for the violations. Panama meets this test.

MLAT – Mutual Legal Assistance Treaty. Many nations have entered into these agreements. For a list of countries that have signed these agreements with the US, courtesy of the US government.

It is shocking how many countries are in these types of agreements. Even Panama is in such an agreement, but it is quite limited in scope, see below:

Essentially, Panama will cooperate in a multinational case related to narcotics and money laundering (these crimes must be related to narcotics). They will also get involved in cases involving child pornography and actual terrorism. If you are not a narcotics dealer and you are not a money launderer (money launderers generally handle many millions of dollars), or a child pornographer, or a terrorist, you should not worry about this. The MLAT requires that a criminal prosecution case be filed in the requesting government’s criminal courts first (meaning no fishing expeditions), then through diplomatic channels involving embassies, information requests are made , then they are reviewed by Panamanian officials and either a compliance decision is made or more information is requested in order to reach a determination. These cases can take months and even years to complete. Sometimes the country where the bank is located, once alerted to the problem, first conducts its own investigation and this usually requires them to seize the relevant records and documents, which can stall the process for a long time, even years. from his justice. systems generally move quite slowly and statutes of limitation can run out, please do not interpret this to mean that Panama does this routinely, it is just something that happens from time to time around the world. The MLAT does not apply to civil cases such as divorce, bankruptcy, civil lawsuits, commercial litigation, any type of civil litigation, civil tax matters, etc. Tax matters of any kind are not covered by this as far as Panama is concerned. Income tax evasion is a civil (not criminal) offense in Panama. Switzerland cooperates in income tax cases if the return is filed falsely, such as not reporting all income, omitting things, or so the complaining government says. Panama does not have extradition treaties. Panama passes this test.

Tax treaties: Many of the so-called offshore jurisdictions are in tax treaties. For a list of countries with tax treaties with the US, click here. Panama does NOT have a tax treaty with any country. Even Switzerland and Belize are in tax treaties as are most so-called offshore jurisdictions. Click here for a full list of countries in tax treaties with links allowing you to read the actual treaties, a real eye opener, click here:

http://panamalaw.org/countries_with_tax_treaties.html

Banking License Type – Many of these offshore banks have offshore banking licenses instead of regular banking licences. Let me explain. These island jurisdictions usually have different classes of banking licences: one class allows the bank to do business only with residents of the country, the other class usually found is the offshore license which allows the bank to ONLY do business with non-residents of the country. , and generally have a third class license that allows the bank to do business with both residents and non-residents. It is a natural conclusion that a bank with an exclusive license abroad is a risky proposition at best, since the government will not allow them to do business with the citizens of their country. The banks we use in Panama are open to Panamanian citizens and are never just offshore banks. Most of the bank accounts offered by various website companies are with banks that only have an offshore license.

Corporate Privacy – This is an important point. I see many websites selling offshore corporations from dozens of countries. The only type of corporation worth anything when it comes to privacy is a bearer share corporation. What is meant by this is that the ownership of the corporation remains with the person who has the physical stock certificates of the corporation. The property does not need to be reported or registered anywhere. A sale of the corporation does not need to be reported. This is what is called a non-transparent corporation and it is extremely disgusting to many governments who think that people have no right to privacy. In Panama, an SA Corporation or a bearer share company has no ownership information or registration requirements. One simply hires professional directors (which we provide) who appear as directors in hundreds of corporations and that’s it. Directors are made public but you don’t have to be your own director, we provide professional nominee directors complete with letters of resignation and general power of attorney. Corporate privacy is especially important as governments have begun monitoring bank transfers, including recently the Swift System scandal showing the US was monitoring Swift transfers and we don’t know to what extent and for exactly how long , but it is better to assume the worst. If one uses an anonymous Panamanian corporation with bearer shares, there is a lack of transparency in the sense that no one knows the ownership behind the corporation, they only know that the corporation received or sent a wire and the other side of the transaction. This serves to preserve your privacy to a great extent. Imagine how silly it is to use an offshore corporation where ownership is made public and can be computerized, so one could know in seconds who is the person behind the corporation receiving or sending the funds. This is what is being sold on the internet as an offshore corporation tricking people into thinking their privacy is protected. Once again Panama passes the test.

Tax Free – The offshore jurisdiction must be tax free in the sense that income derived from abroad is not taxed by the country where the corporation is domiciled. Panama meets this test like many other countries. Panama also has no capital gains tax for stock market investors and there is no inheritance or inheritance tax. Panama passes this test.

Weather Considerations: Many of these offshore jurisdictions are located on islands and are subject to hurricane power outages. You also have to look for the risk of volcanoes, tsunamis and earthquakes. Just what you don’t need is a power outage due to a storm preventing you from getting your money out when you need it. The reason the Panama Canal was built where it is is because there is no risk of hurricanes, tsunamis, volcanoes and earthquakes. Panama passes the test.

Infrastructure: Power generators, telephone system, and Internet must be considered when evaluating an offshore jurisdiction. You don’t want to have to wait days or weeks before you can use your online banking or be able to talk to your bank over the phone. Panama was basically built by the Americans who just left it in the year 2000. It has telephones, electricity, roads, etc. American style. Cell phones and Internet in Panama are as good as those in Canada or the United States. Panama passes the test again.

Government Stability: The last thing you need is to bank in some tax haven in an offshore jurisdiction and find out that a revolution has taken place and you can kiss your money goodbye. Another possibility is like what happened in Grenada when there was rampant bank fraud causing offshore banks to be closed and liquidated with people losing their savings. Panama is a stable democracy. Panama is a UN neutral country, so a war is highly unlikely. Panama has a treaty with the US regarding the Panama Canal which was granted to them by the US in 2000. If the canal is threatened, the US has the right to intervene to protect the Panama Canal. This means that if there were to be a revolution (somewhat unlikely given that Panama is a very stable democracy), the US would have fighter jets there within an hour or two and the next day you could expect to see a carrier group of the Armed in the Bay of Panama with an expeditionary force of marines. Next up would be an airlift, paratroopers, helicopters, nuclear submarines and you get the idea. Forget about an invasion, attack or revolution in Panama, pass the test.

Currency – Panama uses the US dollar as its currency. Banks are in US dollars and ATMs dispense US dollars, they even use US coins. This means a stable coin. I know some of you will say that you like the euro better, but when I say stable, compare it to the Bahamian dollar or the Grand Cayman dollar. No currency conversion costs in Panama if you use dollars. Panama passes the test again.

Ties with the EU: Panama has no ties that could erode privacy again by passing the test. No income statement for EU residents and no withholding collection. Tax identification numbers from your country of origin are not required to open a bank account in Panama, own a corporation, buy real estate, etc. Panama passes the test again.

For more information please visit:

http://www.panamalaw.org

http://www.panamalaw.org/compare_offshore_jurisdictions.html

http://www.panamalaw.org/asset_protection.html