Financial Services

What is Offshore?
In its simplest terms, going offshore means nothing more than putting your money in foreign banks. This is simply done to enhance its safety through privacy protection and/or to get a tax free status.

See PTClub's Comprehensive List Of Confidential Bank Accounts HERE!

Who is the audience for this FAQ?
This FAQ is designed for investors who are curious about how to protect & grow their assets offshore.

What is asset protection?
Conventional asset protection is not hiding assets, defrauding creditors or evading income taxes. Asset protection is the positioning of assets to make them unattractive and legally unreachable by creditors, but available for financial goals and needs.

Sound asset protection does not encourage nor necessitate illegal acts such as perjury or concealment of assets in violation of law. The law itself recognises asset protection as exampled by numerous provisions defining permitted and prohibited strategies. It is certainly possible to affect an asset protection plan legally. There is no need to violate any law or regulation.

Even those with ethical objections can still adopt an asset protection plan and then if a rightful claim later arises, surrender their assets.

Offshore banking has become increasingly difficult of late, especially for Americans due to FATCA, which comes into full force in the next few months, as well as other arcane filing and reporting requirements. Many offshore banks canceled account for all their American customers and many, nearly 90% of offshore banks, no longer welcome nor accept Americans as customers for account opening purposes.

Then to make matters worse for most nationalities, you have the "SIGNATORIES OF THE MULTILATERAL COMPETENT AUTHORITY AGREEMENT". Click Here to download our PDF list of countries signed up for this intrusive agreement.

Fortunately PTClub comes to the rescue for Americans and most other nationalities for account opening purposes. PTClub's Comprehensive List Of Confidential Bank Accounts can sort, meet and exceed your requirements in most cases.

What is the meaning of offshore?

There are two common meanings for the word offshore. Literally, offshore means off or away from the shore. The Channel Islands are offshore from England and France; while Vanuatu is offshore from Australia. Offshore is also used to mean "foreign." Swiss banks are offshore relative to Americans; whereas Panamanian banks are offshore relative to Swiss.

What is offshore banking?
Because a bank is located in a foreign country does does not make it an offshore bank. An offshore bank must be specifically licenced as such under appropriate offshore banking legislation. Regular onshore banking is subject to the tax rules, foreign exchange rules and charges of whatever country the account is in. They are also subject to foreign exchange regulations and are not covered by the offshore banking confidentiality and asset protection legislation. By the contrary, offshore banking is tax free, there are no foreign exchange regulations, and all account information is confidential.

Why offshore investing?
Offshore investors obtain greater freedom than is possible onshore. European & North American nations suffocate individuals and institutions alike with complex regulations. Thus, the likes of Barclays Bank and Bank of America go offshore to reduce red-tape. Others go offshore to simplify international trade. Thus, a German Jewry might establish an offshore subsidiary to buy gold. Still other persons and businesses seek privacy. They want bank accounts in jurisdictions where it is a felony for a banker to reveal that they even have an account! By contrast, there is zero financial privacy in Europe and America. In addition, many go offshore for tax benefits. Some locales have zero income tax, zero inheritance tax, and zero corporate tax.

Do criminals hide assets offshore?
Yes, they do. Blackmailers, extortionists, rapists, and corrupt politicians operate onshore everywhere, both within and outside mainstream institutions. Criminals hide their activities everywhere they can, including offshore.

Why do law abiding people go offshore?
There are many reasons:

  • to increase personal privacy
  • to protect yourself from invasive bureaucracy
  • to protect against frivolous lawsuits
  • to protect your assets from seizure
  • to assist estate planning
  • to preserve your assets for your heirs
  • to protect a percentage of your income from income taxes
  • to protect a percentage of your profits from capital taxes
  • to protect capital gains from capital gains taxes
  • to delay any taxation
  • to increase investment diversification..

Is going offshore only for wealthy investors?
Going offshore is like taking a vacation. Years ago only the very affluent did. At the entry level, you can open an offshore bank account in a pro-privacy locale with about US$1,000 initial deposit. The cost to open and pay annual maintenance fees for an offshore trust or corporation is roughly the same as its onshore counterpart. Of course, high net worth investors have many advantages offshore and onshore which are unavailable to persons with few assets.

Is it safe to go offshore?

The world's major companies and wealthiest investors think so. A conservative investor can put money in foreign banks that have top-rate credit ratings. More American banks and savings & loans collapsed due to corruption in the 1980s than in any other country. I live by the maxim, "Investigate before you invest." Investing offshore is as safe as walking across the street, if you look in both directions first.

Who discourages investors to go offshore?
Many persons and statist institutions interested in your ignorance, including: 1) the national banking system, which is afraid you'll transfer funds to foreign banks that offer better services, 2) onshore accountants and money managers, who are afraid to lose you as a customer, 3) credit bureaus and database firms, which make money selling data about you, and 4) onshore attorneys, who are afraid they will be unable to confiscate your life savings if your money is safely overseas.

How do I go offshore?
The first step is do a little homework. You'll save yourself a lot of time, frustration, and money by doing a little research. Get some info before proceeding. Let us suggest you first the contents of this site. Or keep reading to find the version of an enlightening article, that can well be considered one of the most informative on the subject. Given the enormous amount of misinformation spread by the politically correct media about this subject, we think this description is a very necessary task. The author, David Johnson is an American aiming this piece at US taxpayers. However, the majority of points discussed apply equally to most countries.

By David Johnson

When you have something to hide, the simple rule of thumb is-do it offshore. After all, if you are reading this your goal is to keep your financial business to yourself. The purpose of this article is to give an introductory inside look at banking and investing overseas, using fiscal tax shelters (havens) to reduce or eliminate taxes, and foremost, to provide confidentiality in personal and business matters. Period.

For various reasons, offshore banking has been tagged as "unsafe", "risky", "illegal" or "for the wealthy", let's separate the facts from the bull! First off, one must understand that it is normal for those that know little or nothing about something (besides what they hear from other even less knowledgeable people) to be afraid and suspicious about it. Misinformed financial planners, attorneys and accountants may know economics and the law in the United States or their country of residence, but few know about handling business outside their domicile. Let's tackle these misconceptions one at a time.

Legality
There isn't and will never be a law restricting the sending of funds outside your country. How do I know? Simple. As a country dependent on International trade (billions of dollars a year and counting) the American economy would be destroyed. How? Since all US global trade is transacted in US dollars, there would be no exports or imports, due to the fact that the United States would not be able to buy and sell goods. Make sense?

If you wanted to, you could move or transfer some or all of your money out of your bank or credit union to anywhere in the world, Legally.

US banks and the IRS disseminate negative propaganda dealing with offshore banking, making it seem unsafe or some type of criminal act. Why? Banks just want to keep your money in their institutions to use for their own profitable purposes. Did you know that most US banks themselves accept deposits from people overseas and often invest in foreign stocks and hold accounts with foreign banks? It's true! As far as the IRS is concerned, they obviously want your money in US banks where they can tax every dollar you earn in interest, and keep track of how many liquid assets you have and where they are.

The confusion with tax legalities is sometimes due to lack of knowledge. In the US tax evasion is a crime, tax avoidance is not. As you know, there are zillions of laws on the books in every country. Without a doubt what is legal in one place may be against the law elsewhere. For example tax evasion is not a crime in jurisdictions where there is no income tax. Thus, in most cases (except those with significant political and/or business weight) countries that are not allies usually don't assist other nation s in enforcing laws that are not laws in their countries. Further, a country has no legal right to conduct an investigation in a foreign country without consent of the respective government.

In reality, a country has every right to deny any other nation permission to make examinations in their territory. Therefore, it is difficult if not impossible for authorities in the US or elsewhere to obtain financial transaction records of tax evaders in many foreign-based institutions (outside of those located in areas that have some type of co-operation treaties). Strict banking secrecy laws also contribute to this difficulty. Most tax havens impose lengthy prison terms and/or hefty fines for violation s of a client's secrecy.

INTER-FIPOL (The International Fiscal Police) is the tax crime equivalent of INTERPOL (The International police Organisation), which is a network of law enforcement authorities in numerous countries which exchange information on criminals. Many evaders are opening accounts in fictitious names and using mail forwarding and pick up drops for privacy.

Practicality
Movie-makers and recent international scandals, such as BCCI and Iran-Contra, have contributed to negative views about offshore banking.

Contrary to popular belief, rich criminals and corrupt government officials make up a small segment of the total number of customers at any given offshore institution. Now more than ever the average American blue collar worker and businessman is using offshore banking as a way to reduce taxes (through legal avoidance). Many accounts may be opened for the same amount required in the US (about $100) or less. In some cases, there is no minimum opening deposit at all. Further, the interest rates are usually substantially higher than in the US (since federal law sets limits on the amount of interest a bank can pay you). But by far, the reason most people turn to offshore banks is their confidentiality.

One might ask, "if these banks are so good, why don't they advertise in the US."? The answer is simple...they are prohibited! Federal law restricts off shore banks from advertising their services in US magazines and newspapers, unless they agree to the same restrictions that govern F.D.I.C. institutions. (such as interest limitation). Why? That's simple too...to keep the competition down. Opening an account with these banks is as simple as writing a formal letter to the institution and requesting information about their various services and the appropriate application forms, and returning them to the bank. It really is that easy! Most banks never really have to see you in person.

Safety
All offshore banks are regulated in one form or another, like their US counterparts, but minus the limiting federal laws. Less restrictive regulations abroad allow foreign banks more freedom in locating the best investments world-wide. Allowing them to pass on and share their profits with their customers. As for insurance, forget the F.D.I.C. or other private insurance companies! They usually only allow a liquidity factor (insurance) of about 10% of public deposits. Many offshore banks are self-insured, meaning they have at least one dollar in cash to cover every dollar on deposit, that translates to 100% plus insurance. Also, the majority of the worlds largest and strongest banks (as far as assets go) are overseas, not in the United States. Call your local library's business and finance or commercial department and ask the librarian to look up these details.

Tax evasion
If you deposit your pay cheque in a US bank, chances are you've already paid income taxes on it (unless it is a personal cheque). So you have no further obligations, since taxes were deducted before the cheque even hit your hand. With a savings or brokerage account, at the end of the year when you get your annual statement, you simply add the total amount of interest or profit earned on your income, and pay taxes on the grand total. The same is only true offshore if the country the bank is located in imposes a withholding tax. Since I'm on the subject of taxes, did you know that the United States and the Philippines are the only two nations in the world that tax income earned outside of their countries? Anyway ... back to tax evasion. Below are a few examples of ways some individuals have cheated the tax-man.

A lawyer received payment by personal cheque from a client and deposited it in his offshore account. Since the deposit didn't appear on his business records, the chances are it would never be found out (even if he was audited).

One couple sold a valuable antique and had the buyer send the payment directly to their offshore bank account. Later the couple used the money to tour Europe and the Caribbean.

Another example is the Savings and Loan bank customer who enticed his "unscrupulous" banker to electronically transfer a large sum of cash offshore without reporting the transaction to the IRS. The customer then borrowed the money back from the offshore bank. Since loan proceeds are not taxable, no taxes were paid.

These types of schemes are no longer used by the rich with extra money to hide, but by average Americans who don't like to pay taxes on every cent they earn.

How hidden assets are found
Having conducted investigations in the US and abroad, I am familiar with the various techniques which may be used to locate leads to funds being kept offshore. Here are a few:

  • Checking passports (and travel agents) for evidence of visits to "high profile" destinations such as: Switzerland, Cayman Islands, The Bahamas, Isle of Man, Netherlands Antilles, and other known banking and tax havens. Travel to these type of areas will surely throw up a red flag, giving investigators a place to start looking for your assets.
  • Examining telephone (home, business and hotel), fax and mobile (cellular) phone records to identify undisclosed business connections and contacts.
  • Reviewing credit card statements to determine who you do business with, where you travel (domestic & foreign), and what products and services you use. These records leave a paper trail a mile long.
  • Garbage is often sifted through for information such as statements, invoices, correspondence, and other relevant material useful in tracking your affairs. Use a high quality paper shredder, discard your garbage at another location, or burn and crush it. It sounds drastic, but what you throw away says a lot about you, and many leads can be found there.
  • Compiling a list of parties that you have a relationship with (business or otherwise) by recording the return addresses on your incoming mail. This technique can disclose friends, associates and partners. If you must receive important mail at your residence or business address, be sure to ask your correspondents to stop using a return address.
  • Looking into banking transactions. All withdrawals of $3000 or more must be reported by your bank to the federal government, whether made by cash, cheque or electronic transfer. Keep your transactions under $3000.
  • Checking private courier's logs (UPS, DHL, Federal Express, Airborne Express etc.) for delivery of special or important letters and packages.
  • Examining telex records of your company or business to locate areas of foreign activity.

  • List Of PTClub's Private Bank Accounts