Debunking 12 Offshore Banking Myths

Offshore banking is predominately for spies and criminals -- This is misinformation spread by those who don't want you to take your money out of there control. Today, with the MLAT treaty in place, criminals and spies can't make much use of offshore bank accounts. Today most of the offshore money is actually deposited by fortune 500 companies protecting their assets and planning their operations for maximum tax benefit.

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.

Offshore bank accounts are only for rich people. -- A typical offshore package is less than $2000USD to setup. Once in place an offshore bank account and offshore company are the basis for a rock solid asset protection and tax plan.

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.

To open an offshore bank account you need to visit the country in question -- This is a falsehood. We open bank accounts regularly for our clients without ever seeing them. Everything is done by fedex, phone and fax.

Bank secrecy is useless now that all the offshore jurisdictions are in the MLAT (Mutual Legal Assistance Treaty). -- If you are a criminal there is some merit to this statement. If you are not a criminal, but just someone trying to protect your money this statement is false. For an MLAT request to be honored, it must be based on a crime in BOTH countries. If the offshore country doesn't consider the activity a crime, they will NOT comply with the request. A great example is tax evasion. This is a crime in countries like the USA and Canada but in countries like Panama for instance it is not a crime. MLAT requests for tax evasion are simply denied.

All the countries share tax information now. -- Many tax treaties have been put in place but offshore countries like Panama do NOT have a tax treaty with anyone. In fact they have bank secrecy laws on their books to prevent this kind of information sharing.

Its hard to manage a bank account offshore secretly. -- Today all the major banks allow you to do your banking online using encrypted communications. Offshore banks are no exception. Online banking a common feature of an offshore bank account. In fact, you can even send a bank wire using your offshore bank account. This is a service many onshore banks don't have.

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.

It's impossible to move money offshore without someone being able to track down where it went. -- Moving money to a secret offshore bank account is done by passing the money through a second offshore jurisdiction. For example, if the money is wired to a bank the Cayman Islands and the money is wired again from the Cayman Islands to Panama, it is impossible for anyone to know the money is in Panama.

Offshore bank accounts can be used to do all the same activities as an onshore account -- This is almost true. The only exception is online bill payment. This popular feature doesn't make sense offshore and to my knowledge no offshore banks offer it. Typically, the money held offshore is not used onshore anyway. Having said that, most offshore banking clients have a bank card that allows them to withdraw funds anywhere in the world. The card only leads back to the corporation which owns the bank account (and would require breaking bank secrecy even to find that out). The corporation is usually a bearer share corporation which means that it's ownership is anonymous anyway.

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.

Article Source: http://www.articlemonk.com

If you have a business or have money that you don't want to be taken by an angry spouse or a legal battle consider reading more of Doug Snarder's work on the Offshore Banking Account and Offshore Asset Protection
This article is available as a unique content article with free reprint rights.

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated