Category Archives: Offshore


Create a Private and Protected Home for Your Money


Hello dear visitor. I am of the opinion that protecting and preserving your hard-earned wealth is just as important as creating it in the first place. What use is it for you when you work hard to build wealth only to have it destroyed by excessive taxation, frivolous lawsuits, and other destroyers of wealth. In the United States frivolous litigation has reached epidemic proportions. Check out this quote:

According to the President’s Council on Competitiveness, it is estimated that Americans spend in excess of $300 billion a year in litigation. The United States has 30 times more lawsuits per person than Japan. Last year the United States had 69,800 more product-liability cases than the United Kingdom. Currently, American companies pay liability premiums that are 20 to 50 times higher than those paid by foreign firms.


Insane, isn’t it? Imagine if your business or personal assets came under the attack of some litigious parasite – those people who file a lawsuit simply because they know they’ll walk away with a big settlement.

So what can one do to protect one’s assets? The answer is to create a legal shield around your assets. I was looking a bit into this matter and I came across a very informative article on the Escape from America Magazine website and I thought I’d share it with you folks. It basically talks about the use of an Offshore LLC and how it can be used to protect your assets and reduce your tax burden.

You can read the article over her:

Seven Reasons Why Offshore Trusts Are So Useful

BOB BAUMAN, Legal Counsel for The Sovereign Society brings you these 7 reasons why you should seriously consider offshore asset protection trusts (APTs) as part of your overall asset protection plan.

By the way I strongly suggest you subscribe to The Sovereign Society Newsletter (it’s FREE). Just visit their homepage.

Without further ado, here are a few reasons why offshore APTs have proven to be so effective:

1. Start-Over: In many cases, the courts of foreign “asset haven” nations will not recognize the U.S. or other nations’ domestic court orders. A foreign judgment creditor seeking collection must re-litigate the original claim in the local asset haven’s courts after hiring local lawyers. He may be required to post a bond and to pay legal expenses for all parties if he loses. The legal complexity and cost of such an international collection effort is likely to stop all but the most determined adversaries and promote quick settlement.

2. Minimal Requirements: An offshore trust does not need to be complicated. You can create one by signing the formal documents and opening a trust account managed by your local trustee in a foreign bank of your choice. Respected offshore banks traditionally provide experienced trust officers to handle offshore trust matters. U.S. asset protection attorneys routinely work directly with such offshore banks and trust companies. Most international banks have U.S. dollar denominated accounts, often with better interest rates than American banks offer.

3. Greater Protection: Under the laws of asset haven nations, assets placed in an offshore asset protection trust have far more protection than under domestic U.S. trust law. The law in such countries provides an asset protection “safe harbor” that is unavailable in the U.S. and many other nations. With an offshore APT, foreign-held trust assets are not subject to the jurisdiction of your local or home country judicial system.

4. Fast Acting: The statute of limitations imposed on initiating a foreign creditor’s suit varies. In many asset haven nations, the statute begins to run from the date you establish the asset protection trust. Some haven nations, such as the Cook Islands, have a limit of one year for initiation of claims. Others impose a claims filing limit for certain creditors of two years after APT formation. As a practical matter, it may take a creditor longer than that just to discover you have a foreign asset protection trust.

5. Confidentiality: The offshore APT can provide greater privacy and confidentiality, minimization of domestic, home country inheritance taxes, and helps your heirs avoid the probate tax process after your death. It provides increased flexibility in conducting affairs in case of personal disability, allows easy transfer of asset titles, and avoids domestic currency controls in your home nation.

6. Estate Planning: An offshore APT can serve the same traditional estate planning goals achieved by domestic strategies. These include using bypass trust provisions to minimize estate taxes for a husband and wife, trusts that allow maximum use of gift tax exemptions through planned giving, and trusts that provide for maintenance and tax free income for a surviving spouse. An APT also avoids the problems, delays and costs of the domestic probate process in the U.S. and other nations.

7. Profitable Investments: An offshore APT is an excellent platform to use to diversify investments and benefit from global tax savings. The asset protection trust permits access to some of the world’s best investment opportunities, without concern for your home nation’s legal restrictions. Offshore foreign stock, bond, and mutual fund trading are not covered by laws such as the U.S. Securities and Exchange Act or its administrative arm, the SEC. An offshore APT can also purchase attractive life insurance and annuity products not available in the U.S. and other nations.

The Infamous “Expat Tax” May Become A Reality


Thinking of becoming an expat? Think again! In yet another totalitarian move by the United State Government you just may be heavily taxed if you decide to exercise your constitutionally protected right to voluntarily end your U.S Citizenship.

Policymakers slipped this bit of Orwellian legal machinery into a popular military pension/pay bill. I might add that no hearings took place nor was any public notice given! Political insiders hint that Emperor, I mean, President Bush just may sign this bill into law.

If this bill passes it will be a flagrant violation of the United States Constitution – then again what do most politicians know or care about this venerable piece of paper.

The Constitution guarantees the right to voluntarily end your U.S. citizenship. It also grants you the right to live and travel abroad freely and acquire and enjoy second citizenship from other nations

The U.S. Supreme Court has confirmed this in numerous cases. Heck, even the U.N Charter affirms these most basic of human rights! This rightly called totalitarian law reminds me of Adolf Hitler’s notorious departure taxes that stripped Jews of their property before they were allowed to escape from Nazi Germany. Am I being overly dramatic by stating this. I think not!

Ok, since this blog is about making money AND protecting it permit me to put forth a very simple protective measure. What I may humbly suggest is that you consider looking into getting a second passport now while you still can. Once you’ve got your second “backup” citizenship I may be a good idea to move a reasonable portion of your wealth offshore. I am no legal expert but I’m pretty sure it would be a smart idea to create and operate your offshore financial base using your second citizenship – NOT U.S.

In a perfect world with just governments you wouldn’t have to do this. Of course the notion of a just government is laughable as there is no such species of government out there – never was, and never will. So, given that fortune is on the side of those who are well prepared, I would strongly suggest you look into this matter.

Wishing you a prosperity and liberty.


Tax havens, and why you may want to use them

The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing. ~Jean Baptist Colbert

Yes indeed, but fret not as there is help for you. There can be salvation from being plucked by the greedy hand of government, and it comes in the form of tax competition. Tax competition is when national governments pursue a policy of lowering taxes with the intent to encourage the flow of investments into their country or to ensure that financial resources do not flee from their jurisdiction.

If you own a business or you’re just a regular worker in a high-tax country, you can definitely save some money by paying less tax or sometimes none at all by taking advantage of so called “tax havens.” Tax haven is defined by wikipedia as the “existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance.” In other words tax havens are places where foreigners can house their assets, do business and pay little or no taxes.

First I should put out a caveat to those who are thinking, “hey this is great, I can just move all my business dealings to a tax haven country and I can avoid being taxed by my government”. Not so fast! It isn’t quite that simple to easy for some people to avoid the long reach of the tax man If for example you are living in a country that levies taxes on worldwide income then a whole lot of what I am going to introduce to you in this post is not going to be of that much use to you; at least not on a personal income tax level. Even if you intend to run an offshore business you might run into nasty anti controlled foreign corporation (CFC) laws. Two countries that quickly come to my mind which tax the worldwide income of their citizens and corporations are: The United States & Canada. Most countries assess taxes based on residency, not citizenship. For Americans, however, there’s no escaping the long arm of the IRS.

Americans living outside the country are exempt on their first $82,400 of foreign earned income, but the most recent 2006 tax cuts boosted taxes by up to 20 percent for expatriates and made it possible for the IRS to dip into foreign retirement accounts for the first time. It is the highest such increase in 30 years, and ex-pats pay it on top of their host country taxes.

For Americans abroad, the only way to fully take advantage of tax havens is to renounce American citizenship, which over 500 people, almost all of very high net worth, did last year.

Take a look at this table of mean income tax rates as a percentage of income (In the year 2005)

income taxes by country

If you live in any of those countries I bet I don’t have to tell you why it might be a good idea to look into some legal method of alleviating your tax burden. Perhaps looking into tax havens is right for you. It all depends on your unique circumstances and financial requirements and goals. You should definitely consult with a tax expert as well as an expert in the “offshore” finance arena before you embark upon this journey.

I will make your journey a little bit easier by doing a bit of research for you. I am going to go through a list of popular tax haven nations and outline the pros and cons. This should at least give you a bit of a direction as to where you need to focus your research on. Yes, I do recommend that you do some heavy research before you even seriously consider trying to outwit the tax man. For the sake of brevity I can’t review every tax haven in the world, so instead I will focus on some of the more popular ones. I will avoid tax havens countries that have so called “sold out” and given into too much into the pressures of the high-tax countries to limit you privacy and financial freedom. So without further ado, here are the countries in all their tax free glory.

Tax Havens:



1) Andorra has zero tax liability for both individuals and companies on internally and externally derived income. Plus it also maintains absolute discretion with foreign tax authorities.

2) The miniature state has miniature regulation and virtually no government

3) It has a high standard of living. It is the choice of those who enjoy a mild alpine climate, winter sports, and political and economic stability


1) Immigration permits are very difficult, but not impossible, to obtain

2) This micro-state is so small that it lacks an airport. The nearest airport is in Barcelona, Spain (Adorra is located between Spain and France)

3) A minimum of two shareholders are required and at least one shareholder must be of Andorran nationality owning a minimum of 67% of the company’s share capital. This alone is a big negative, but if you intend to become a resident then it would obviously no longer be a problem.

4) High incorporation fees. I found that most incorporation services companies charge around 6000 euros or more.

5) The share capital must be fully paid up in advance of incorporation. This amount must be deposited with an Andorran bank in a designated company incorporation type account. The bank must then release a special certificate, addressed to the designated notary, responsible for concluding incorporation formalities

6) Annual board meetings should be conducted in Andorra

7) Andorra has been blacklisted by the OECD. Being black listed by the OECD for failure to cooperate is going to make using their corporations and banks difficult

In light of the above negative I would only recommend this tax haven for the “well to do.”



1) No tax on internationally earned income for IBC (International Business Corporations)

2) The only English-speaking country in South America (definitely something I like)

3) Fairly reasonable IBC incorporation fees: Roughly $1500 to incorporate with ongoing costs of around $900 per year.

4) Only one Shareholder is required. There is no public record of the Shareholder. IBCs require only one Director who could be a corporation, and need not be resident in the country. Meetings of Shareholders and/or Directors may be held in any country, at any time and they may attend meetings by proxy. No requirement to file accounts or to have accounts audited. Public filing limited to certificate of incorporation, memorandum and articles of association, registered office and name and address of registered agent


1) Unreliable electricity as well as telephone and internet services. This would not be to much of a problem if all you need is an IBC. However if you intend to open up a bank account in Belize I could definitely see this becoming quite a pain.

2) Somewhat questionable political stability. they had a regime change in recent years and the new regime did not honor economic citizenships and passports of the previous regime. This is definitely not something you want to hear. However, it remains to be seen how things will turn out.

Costa Rica


1) A Costa Rican S.A. (Sociedad Anonima – Translates into “Corporation”) is free to engage in many types of business activities, both in Costa Rica and in other countries and it pays nothing on what it earns outside of Costa Rica.

2) Costa Rican corporations provide a low profile alternative because many high tax countries like the U.S.A. do not consider them as offshore companies! Though a little exotic, Costa Rica is nonetheless a secure alternative that does not suffer the problems associated with membership of the high-profile offshore club.

3) Like Panama, Costa Rica’s corporate laws allow any person or entity to control a company without the name actually appearing in the public records. Just as with Panama corporations our Costa Rican law office can set up the corporation without the real owner’s name ever appearing in the record

4) Reasonable incorporation fees which generally are in the area of $1600. Shop around and I’m sure you’ll find some good prices.

5) Costa Rica has a flexible corporate regime and bank secrecy is enshrined in law. A high degree of corporate anonymity is possible; there is no legal requirement to reveal beneficial ownership of companies


1) Bearer shares are not permitted but actual ownership of a Costa Rican corporation is invested in whoever physically has the stock certificates in their possession since the shares can be endorsed over to that person. Companies here are structured as what are known as joint stock companies which means there have to be at least two shareholders.

2) Local laws require that a yearly tax report must be filed, but if there is no domestic income to report, there are no tax consequences.

3) Corporate name choices can only be in Spanish and carry the S.A. suffix at the end. Somewhat restrictive but not such a big deal.



1) There are no income taxes, social security taxes, capital gain taxes, withholding taxes, stamp, or duty taxes.

2) There are no gift, death, estate, dividend, distribution, or inheritance taxes.

3) No minimum authorized capital; bearer shares permitted.

4) A business license is not required.

5) Officers, directors, and members are not identified.

6) Plaintiff bringing civil suit must post US $25,000 bond.

7) Statute of limitations for civil suits is one year.


1) Not too many well-established international banks. There are less than 10 banks in Nevis. Most likely the bank you will deal with in Nevis has an Offshore only Banking License. This means they can only conduct transactions with non-resident of Nevis.

2) Nevis has double-taxation agreements with Denmark, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom

3) Nevis is not a modern country. It is an island subject to weather, internet outages, phone outages etc



1) An International Company is exempted from local taxation

2) There is no requirement to file financial statements, but a company must keep records to reflect its financial position.

3) A Seychelles IBC need not appoint a company secretary, although it is customary to do so. The secretary may be a natural person or body corporate, be of any nationality and need not be resident in the Seychelles. Also the minimum number of shareholders is one

4) Same day incorporation.

5) There are no exchange controls.

6) Bearer share corporations are available.


1) Seychelles IBCs are normally incorporated with an authorised share capital of US€ 5,000 with par value. This being the maximum for the minimum licence fees. The authorised share capital may be expressed in any currency. The minimum issued capital is either one share of no par value or one share of par value.

2) Seychelles Tax Information Sharing Agreements – They are involved in some twenty such agreements. They will exchange information in criminal matter relating to revenue including those relating to taxation, customs duty or trade tariff. This doesn’t speak to well for those concerned with privacy.

3) Somewhat poor IT and telecommunications services



1) There is no personal income tax or capital gains tax

2) Great place to live offering everything you could possibly imagine along with beautiful sea-side scenery

3) It has a highly developed banking sector catering to the well-to-do, so as you can imagine the level of service is quite high, but be warned that this level of service comes at a price. Banking secrecy is also taken serious over here.


1) Expensive! Very expensive for the average rich man. This is the exclusive playground of the super rich.

2) Very tiny country which results in quite high real estate prices.

3) In 2004, Monaco was forced to join the EU’s Savings Tax Directive regime, and agreed to impose a withholding tax on the interest income of EU residents at the same rate as Austria, Belgium and Luxembourg (initially 15%) and to hand over 75 per cent of such revenues to the Member State of the EU resident concerned. Monaco also agreed to exchange information on request in criminal or civil cases of tax fraud or similar misbehavior. The new regime came into effect from 1st July 2005, and it remains to be seen what kind of impact it will have on Monaco’s banking sector.

*In general Monaco will not be an attractive jurisdiction for companies or people wanting to find a classical offshore tax haven. But if you’re just plain rich, and want a very civilised place to live, Monaco is for you*



1) Uruguay is a much more stable democracy when compared to some of the other Latin American countries

2) Offers two quite interesting offshore structures: SAFI (low tax) and SAZF (tax free)

3) You can even start your own offshore bank for as little as $500,000. Limitations apply, such as not being able to do business with the locals. This limitation is applied to all offshore banks.

4) Uruguay does not suffer from the usual tainted appearance of a traditional Caribbean offshore haven

5) A SAFI Corporation needs to file accounts which must be audited by a local accountant, but a SAZF does NOT.


1) As you can see above, in Uruguay your SAFI must file accounts that must be audited by a local accountant, but for the most part this isn’t so expensive and is not quite such a burden. But, this definitely cuts down on privacy.

2) SAFI & SAZF fiduciary structures are more expensive than most IBCs offered by your typical offshore tax havens.


1) Offshore-derived Income is not taxed and does not need to be reported (no tax returns to file). You can have a Panama Corporation, and/or Foundation that banks in Panama and has an office in Panama and yet will not pay any Panama taxes if all the income is derived from offshore.

2) There is far less red tape and less interference from local authorities. Panama has one of the freest economies in the world and the freest in all of Latin America.

3) The government of Panama and its laws actually encourage foreigners to invest and live there.

4) A stable economy with the US dollar as currency. No currency conversion costs. No currency devaluation problems or issues like most of the little tax haven countries have. In Panama the ATM machines spit out US $20 bills. Even USA coins are used in Panama

5) Government investment incentives that slash tax rates and fees for entrepreneur.

6) Panama enjoys a stable, democratically elected government. Panamanians love to vote and turn out is usually very high.

7) No tax treaties! Yes, Panama is not a signatory to any tax information sharing treaties. This is a big bonus for privacy because foreign governments cannot use “fishing expeditions” to pry into your financial privacy.

8) Great banking system. Panama is home to many very large multi-national banks. It also has an excellent inter-bank clearing system very much like the “ACH Fed Wire” (automated clearing house) .

9) Bank privacy is written into Panama’s laws. That means that if a bank employee discloses confidential client information without a Panamanian court order they can go to jail. Panama’s bank secrecy laws are even more stringent than Switzerland’s – some say.

10) Bearer share corporations are allowed. That means that whoever physically holds the share owns the corporation, hence the term “bearer share”. This one is a no-brainer; definitely a plus for those concerned about privacy.

11) A diverse geography from mountain ranges to tropical islands, from a booming metropolis to vast jungle. This makes Panama a great place to retire to. In fact Panama has an excellent program for foreign pensioners who wish to retire there. It is called the “Pensionado program” and it gives numerous perks to foreigners who chose Panama as their place to retire.

12) Cheap real estate. Although some experts say that this is no longer true, it can still be debated, and you probably will be able to find reasonably priced properties, it just may no longer be the case for the Panama City. Also Panama has a low cost of living.

13) Panama has an excellent telecommunications and IT infrastructure.

14) The world’s best discount programs for retirees, with up to 50% off everything from public transport to movies, mortgage rates, doctor’s visits, electricity, restaurants and airfares. No doubt this makes Panama a very attractive place for the baby-boomers who now face retirement problems and increasing expenses at home.

For more details on the Pensionado program please visit this MSN Money article.


1) Due to its ostentatiously “offshore” status it is possible that many businesses may refuse to do business with you if they knew that your corporation is registered in Panama.

2) Big disparity between the poor and the rich. This country definitely does not such a strong middle class when compared to your typical Western Nations. Whether this is changing or will change with time I cannot say as I am not an expert on Panama’s social structure and dynamics. But one thing is sure, Panama does have a proportionally large population of poor people, some of which make less than $300 per month. Naturally this disparity in wealth and income can cause social tensions and is a breeding ground for crime.

3) Panama’s infrastructure is heavily pressured by extremely rapid progress and it is uncertain whether it can bear this heavy demand put upon it.

4) Left over stigma of “political instability” due to the whole Noriega affair.

5) Frankly, the traffic in Panama City just sucks! Then again if you’re not going to be traveling to, or living in Panama this isn’t going to be a problem for you.

Other than that I can’t find anything else wrong with Panama, and believe me I’ve tried. If you can suggest anything worthy of being added to this list, please give me a shout. As with all people I have my biases, and out of all the above mentioned tax havens I’d say Panama presents the strongest offering. However, I strongly recommend you consult with offshore specialists and a tax adviser in your own country before you make a move.

In case you’re thinking why I left Switzerland, you should know that Switzerland is NOT a tax-haven, not even by a stretch. The Swiss have strong bank privacy laws and low taxes, but I don’t think you can classify their country as a “tax haven”.

Ok, I think that does it for this very, very long post. I may introduce another post where I will add some other tax havens, but I believe I covered a pretty good range. I skipped over some of the typical high profile Caribbean tax havens as, well, these days it may not be such a good idea to use them because so many of them have “sold out” and have given into the demands of high-tax countries and international organizations such as the OECD and IETF. As you can probably guess the membership these two organizations (and others) contains mainly high-tax countries who abhor the tax competition.

I hope this has been an informative post, and I wish you the best of luck if you do decide to embark upon the offshore journey and lifestyle.