Offshore Incorporation & Banking Datasheet

gework

Ostrich
Gold Member
[This guide is not relevant to US citizens as the amount of pressure that has been put on foreign countries by US authorities to cooperate with their tax regime means that the United States is now often among the likes of Iran and North Korea on the blacklists financial institutions around the world.]

The legality of using "offshore" companies and banking will depend on your situation in relation to your country or countries of residence/citizenship. To find out what your legal status is you need to find out how your country treats worldwide income, what they consider worldwide income and under what terms of residency you become subject to their tax regime.

You should be able to find this information quickly via web search, for example, in the United Kingdom you are required to pay UK tax on wages earned abroad, capital gains on investments, rental income of overseas property and overseas pensions; but you are only required to pay tax on these forms of income if your are a UK resident. There are a few rules, but importantly you are considered a tax resident if you only own a home in the UK and have resided there for 183 or more days.

There may be further caveats to your country's legal system that will need to be researched on a country-by-country basis. The UK has rules for negating overseas income via property ownership abroad.

If you plan on living and working in a country on a more-or-less permanent basis and you are able to by some means divert your income to an offshore bank account either in your own name or in the name of a company, then this is considered tax evasion (illegal). In short if you want to live and work in a country, you are likely to be subject to its tax codes. Failure to pay taxes leaves you open to asset seizure and prison time. There are ways people use to get around this, which can be in a grey area or by causing so much complication that it is difficult to establish who or what may be liable to taxation where.

The simplest way to legally have no requirement to pay tax is to move to a virtually zero tax jurisdiction(s) or live between three or more countries per year.

The key to offshoring is diversification. The more you can spread yourself and your assets, the harder it will be to know of their existence, know of their ownership and seize them.

Company

One of the most important aspects of offshoring is to hold your assets in a company or companies. This adds an extra legal layer to your assets that would have to be challenged in the registering jurisdiction's courts. This is a process that is typically and deliberately expensive. It also means when you make/receive payments by international wire or make payments by your corporate debit card that rather than your personal name and address going through the international financial apparatus, it will be the name and address of your company. Further, if you want to invest in stocks or engage in other markets like forex, rather than having your personal name lodged with the exchange it will be the name of your company.

There are three attributes your company should have:

1) a closed register that does not disclose the company's owners to the public or other governments
2) no requirement to submit company accounts
3) no taxation

Registering a company typically needs to be done via an agent. I can recommend the following:

https://www.icoservices.com/offshore-company-formation.html
https://www.sfm-offshore.com/jurisdictionsoffshore.html

(scroll down for prices and details)

Annual maintenance will cost upwards of $600 as you will also need to pay for a notorised certificate of standing to send to your bank to maintain the account, which costs about $100.

Some of these incorporations are standard domestic companies, while others are international business corporations, which are exempt from tax on overseas income.

I would recommend Belize as it has the above three attributes with the added security of your personal details not being held by the company registrar in Belize. Your details are only held by the agent who registers the company on your behalf. As an added security measure, agents offer a service to have nominee directors register the company on your behalf.

In the case that your company comes under a legal challenge, there are typically large fees just to do so and will probably be unsuccessful unless you are breaking a law in the registration jurisdiction or stepping on the toes of the IRS (International Revenue Service), DHS, CIA etc.

Registering a company and bank account with an agent or law firm gives the added risk of your data being dumped like the Panama and Paradise Papers. If this concerns you, it would be better to register with a small agent like ICO Services (link above).

Bank

A bank account can be arranged by agents like those linked to above, for fee typically in the region of $500. You'll also need to have documents notorised unless you want to open your bank account in person. Some banks require you open an account in person.

It is highly beneficial to open a bank account in a separate country to the one you are incorporated in. This results in at least two jurisdictions whose legal systems would need to be engaged in the hope of determining and seizing your assets.

There are a number of tax sharing agreements between countries via which banks in one country are obliged to provide client information to foreign governments. These are listed here:

http://www.oecd.org/tax/exchange-of-tax-information/taxinformationexchangeagreementstieas.htm

About half of these requests are ignored.

I suggest opening a bank in a country that is stable, but not a major banking jurisdiction, which have been roped much closer into the global financial dragnet set up by the likes of the IRS and the OECD.

A few common options:

1) Euro-Pacific Bank, St Vincent and The Grenadines (minimum opening balance: $500)
2) CIM Banque, Switzerland (minimum opening balance: $10,000)
3) MCB, Seychelles (minimum opening balance: $100,000)
4) UBS, Switzerland (minimum opening balance: $1 million)
5) Liechtenstein Landesbank, Lichtenstein (minimum opening balance: $1 million)

You can usually get an indication of a bank's financial health via the country's financial services authority or the bank's annual report.

Banks that hold foreign currencies do not directly hold money with that country's central bank; the reserves are held with a corresponding bank in that country. The structure is something like this:

  • Your bank account
  • Your offshore bank
  • Offshore bank's corespondent bank in currency's issuing country
  • Issuing country's central bank

Or,

  • RVFer
  • CIM Banque
  • Natwest Bank
  • Bank of England

This adds an extra level of liability from the extra level of fractional reserve banking this involves. Euro-Pacific Bank does not gamble with its clients money (it's a full reserve bank), but its corresponding banks do. So they are a good choice if this is something that worries you.

Registering agents, like the two listed above, can provide proxy beneficiaries to a corporate bank account, thus solving the issue of the possible exchange of your information with foreign governments. This will also protect you from any leaks.

Address

If you don't feel comfortable using unknown nominee directors for your company and nominee beneficiaries for your bank account another option is to buy a foreign property. This is information that will only be held by your bank and possibly offshore corporate registry/agent, but it makes you slightly more difficult to identify and bring another jurisdiction into the jumble of confusion you are surrounding yourself with.

A foreign address is not so essential if you are just a speculator, but if you have real business income then you likely have clients/suppliers who you invoice and/or invoice you. This means you'll be providing them with an address for invoices, which are stored in databases that could be browsed by the government or leaked; as well as likely being delivered across the Internet by insecure email.

Anywhere off the reservation will likely be good. I would recommend Serbia and Macedonia. These are two countries that are a long way from the global tax dragnet, where you will get at least a +1 on your SMV, no GMO, clean food, anti-PC and cheap. If you want to buy a dump, you can pick them up for < $3,000; something habitable for about $8,000; and large houses in good condition with pools from about $40,000.

Also an alternative to a PO Box.

Identity Documents

Even if you open a corporate bank account, you will be required to provide the personal details, including identity documents of its beneficiaries. The countr(y|ies) of that or those passport(s) are the ones that can potentially request disclosure of your assets. This can be avoided by gaining second citizenship of a country that does not aggressively pursue tax.

Many countries have citizenship by investment programs. The two cheapest are:

Dominica:
a) $100,000 donation to a national fund (which you loose) + $10,000 in fees
b) purchase real estate worth >= $200,000 + a minimum of $35,000 in fees

Serbia:
a) €100,000 donation to a national fund (which you loose) + €32,000 in fees
b) purchase real estate worth >= €250,000 + a minimum of €32,000 in fees

The Serbian passport gives visa-free access to most of the former Soviet Union plus China.

Developed nations usually offer similar programs for visas.

There are a number of countries that offer citizenship by descent. They may have other qualifications, but here is a partial list with the terms of descent through which they may be obtained:

  • Armenia, grandparent
  • Canada, parent
  • Finland, grandparent (residence)
  • France, parent
  • Germany, grandparent (limited)
  • India, great-grandparent (overseas citizenship)
  • Ireland (including what is now Northern Ireland), great-grandparent
  • Italy, grandparent
  • Jamaica, grandparent
  • Netherlands, parent
  • Pakistan, grandparent
  • Poland, grandparent
  • Portugal, grandparent
  • Russia, grandparent
  • Serbia, parent
  • Spain, grandparent
  • United Kingdom, grandparent

-------------------------------------------------------------

Spreading yourself out by having your company, bank, address, and dual citizenship in different countries creates a legal mess of courts who are likely going to be uncooperative, offering you protection from creditors, tax authorities and outgoing wives.

For those with a real business, the ultimate would be establishing a headquarters in a country with virtually no domestic taxes, such as the British Virgin Islands. If foreign labour is required this could either be obtained on a freelance basis or via establishing a service company in another country which bills your headquarters.

For those with no real business and just using their offshore account for investments, establishing a primary residence in a virtually zero tax jurisdiction or not living and any specific country is a legal option.

If you do break a few rules, so long as you cover your bases, as above, it's not likely your authorities will ever discover what assets you own. Cases of people being busted with offshore accounts engaging in illegal tax evasion typically consist of those doing so in a manner where their home country has easy access to records of the offshore country, such as UK and Jersey and countries with tax exchange information agreements. The legal mess of a well constructed offshore package makes it to cumbersome and to unfruitful to be worth pursuing.

If you want to live off the tax reservation it's best to cut as many ties with your home country as possible:

  • remove yourself from voter lists
  • sell real estate and direct equity
  • remove yourself from corporate appointments
  • close your domestic bank accounts
  • pay off debts
  • remove yourself from state medical and dental services
  • use another name for deliveries
  • try and avoid using PayPal, Amazon and eBay (particularly selling)

This shows the government you are no longer their possession and stops you showing up in their snooping database. Closing your bank accounts and cutting off financial ties are most important as in developed countries all your banking data is shared with credit rating agencies like Equifax and Experian. Government use that data along with other databases to single out people for investigation.
 
Awesome post. Having been through some of the processes the OP talks about already and had it work well, I can see this is legit advice.

Any ideas for getting cash in your country of birth after closing bank accounts? Are prepaid cards in that country okay?
 

gework

Ostrich
Gold Member
Digital007 said:
Any ideas for getting cash in your country of birth after closing bank accounts? Are prepaid cards in that country okay?
Still looking into what would be the best solution here. I have been told that CryptoPay do prepaid debit cards up to 2,500 EUR without verifying you, though it seems to be a lower threshold on their site. Would also need to verify the card is annon.

Another is Payoneer, which has low fees and you can get a debit card for, but I'm not sure what the specifics would be for a corporate card.

A friend has a setup with his father in that his father goes to Mauritius and get £25,000 in £50 notes from his bank there, brings it back and exchange it for Bitcoin. Not sure how that's been brought thorough customs.
 

LeBeau

Ostrich
Gold Member
louiebeans said:
Whats a good plan for someone looking to remove themselves from US banking system? Low fees, and simple process.
Questions like this just waste people's time.

You have a thread here where the very first sentence talks about these difficulties, but your requirement is "Low fees, and simple process."

Even if you didn't see that sentence, it's foolish to expect someone to make everything easy and cheap for you in what is clearly a complicated process, regardless of country.
 
Yes, I saw that after replying, my apologies.

I'm not looking for someone to do the work for me, just wanted to know what a plan would be for someone just looking to move my money outside US banking system. I don't need anything crazy like establishing a business or multiple accounts to lower my income tax. The reason I phrased it like that was what GE mentioned at the end about "closing domestic bank accounts" and "showing gov't you are no longer in their possession".
 

gework

Ostrich
Gold Member
louiebeans said:
Yes, I saw that after replying, my apologies.
The IRS bullies banks around the world to report details of all their clients to them (I imagine this is only for banks that handle USD; though my bank only started handling USD directly recently and I still had to fill them in); and that is one reason why you need some sort of offshore company to shield the IRS hoovering up your personal details. There are various offshore service providers that will offer extras services to handle all this type of thing for you in a more anonymous way.

For US citizens it's specifically much harder to get a bank account. My bank has one of those pop-ups like the ones that ask you if you will accept their cookies or are 18+ which asks you if you are a US citizen, if you are it kicks you off the site.

If you want an offshore bank account two options would be to go with a major bank in Hong Kong or Singapore, which are also the most stable capitlised bank in the world. You can look at Citi. I saw a few of them are offering offshore accounts but you need a large opening deposit, something in the region of $250K-$1M (USD) and you have to maintain that balence. The only bank I found in Hong Kong that will open non-resident personal accounts is ICICI. However, you need a HKD cheque to initially fund the account. And the initial funding is something like $2K (USD).

I've heard somewhere on the forum that you can open a business in Hong Kong and it's not liable to pay taxes on offshore income and then you can open a bank account for the company there. Since a few years ago regulation has caused most banks to not offer personal accounts to non-HK citizens or residents. This would be a good avenue to look into as Hong Kong's Hang Seng is the best capitalised bank in the world, keeping about 86% of client funds on hand. I think that will cost you about $3K per year, while you can get something like a Belize company and Caribbean bank account for $1K per year.

HK and SG banks probably also offer a bit less privacy due to regulation. I believe the better jurisdictions to go for privacy are the Seychelles, Mauritius and certain Caribbean countries.
 

H1N1

Ostrich
Gold Member
I've only just seen this thread. gework, this is an excellent and well presented datasheet - one of the best I've seen on the forum. I specialised in the offshore tax avoidance mechanisms during law school (UK), and this is as clear and actionable a presentation of the key information as one could ask for.

+1 from me.
 

Beirut

Pelican
gework said:
Serbia:
a) €100,000 donation to a national fund (which you loose) + €32,000 in fees
b) purchase real estate worth >= €250,000 + a minimum of €32,000 in fees

The Serbian passport gives visa-free access to most of the former Soviet Union plus China.
Be careful. Serbia does not offer an official citizenship program afaik

What you saw online on some websites promising that is potentially a scam, or at best some bribery scheme that may get you a passport but it won't be through legit legal channels.
 

H1N1

Ostrich
Gold Member
The only caveat I'd add is to consider the legal system you choose to use very carefully. Dealing with legal challenges in a foreign language, particularly a niche one with poorly developed protections, is likely to be very tricky.

If you choose Panama, your chances of being able to visit Slaughter and May and find a Spanish speaking legal counsel is very high. Your chances of being able to find a highly competent Serbian counsel with fluent English based in your country of origin is much less likely. You could lose everything very quickly, without ever really understanding why. Offshoring is already an exercise that is fraught with risk. Part of the skill in doing it is to balance risk and reward, and mitigate risk as far as possible by choosing well developed legal systems, or ones with a lot to lose.

Panama may have been subject to a leak, but they created a highly favourable legal system out of thin air for foundations, and trusts too. They did this to bring in vast amounts of foreign money, and the exercise was a success. The continuing success of these systems is dependent on predictability of legal outcome, and perceived stability. Therefore somewhere like Panama has a very serious interest in providing the protections it advertises, and avoiding any perceived funny business. Somewhere like Serbia, well, maybe not so much.

Panama is pretty much unique too in allowing for foundations for commercial purposes, where the true settlor doesn't have to be named on the foundation documents or registered with an agent. Hypothetically then, one could perhaps register a gardner as the settlor of the foundation, pay him a modest annual fee to forward on mail, retain complete control as sole signatory of the company account, and exercise full control of the foundation without any record of your involvement. In the event of a leak, there would be no tying your name to the existence of the fund. This is a unique feature of Panamanian Law, or was when I last studied it some years ago.
 

SlickyBoy

Ostrich
better check this stuff.....

A few things:

1) The bit about Irish citizenship is slightly off. You can only get it as a great grandchild born abroad if your parent (the grand child) first became a citizen though the registration process. If your eligible foreign-born parent did not do this before you were born, you are cut out of this chain. Citizenship in the Republic of Ireland does not also include that of Northern Ireland. They will very likely remain part of the UK after Brexit is complete, though there have been a few "what-if?" discussions - nothing more - about Northern Ireland joining the Republic of Ireland to avoid Brexit and remain in the EU.

2) Bank accounts in Singapore are possible, but as for getting bank secrecy there - especially as a US citizen, forget about it. I know an American with a small business over there who gets a pop quiz from his Singapore bank once in a while ensuring that he is reporting everything the way he's supposed to. The banks get calls from the IRS asking if they have US persons as customers, so the banks do internal audits once in a while. He can keep his account, but there isn't anything secret about it.

3) The US government is desperate for cash and they are leaving no stone unturned. You can have an overseas bank account anywhere you want, but you'd better report it or it's a $10,000 fine plus half of whatever is in it. As long as you're following the rules, this isn't a huge deal. If you're really paranoid about the IRS taking over your bank account in the event of hyperinflation, there are other legal possibilities such as buying foreign real estate - something which is not a reportable event. Absent some enormous tax lien, the IRS would have a much more difficult time forcing you to sell your house in country X than they would simply ordering your account seized.

FYI, safe deposit boxes full of foreign cash do not count as bank accounts and are thus not reportable. Nevertheless, it is true that many foreign banks do not want the headache of dealing with US citizens living abroad thanks to the IRS bullying and will simply refuse you as a customer.

If you want to renounce your citizenship and get rid of your US passport altogether, that will take about ten years and last I looked, renunciation has to be for some other reason aside from purely avoiding taxation. Eduardo Saverin was still able to do it somehow, but he paid an enormous "exit tax" which was less than he would have paid in taxes had he stayed and received income from selling any of his Facebook shares. They give US citizenship away to just about anybody from the third world nowadays, but it sticks to you like a financial Berlin wall once you've got it.

Opening up a business entity overseas is fine for an actual business you want to start, but it will be pretty easy to see whether it's being used as nothing more than a BS shell company to hide your assets. FWIW, most asset protection rackets are at best sketchy, at worst illegal and often executed too late by the time the average guy with means realizes he needs to protect something. TNSTASFL.

A US citizen shouldn't get too wrapped up in the whole "offshore" nonsense as that's typically a hook line to lure unsophisticated rubes who think moving their money offshore is how to get rich. Sure, some rich people and companies do this for a variety of reasons, but that isn't how they made their money!

When it comes to taxes, paying the least amount possible is an important consideration, but when taken to the extreme it gets ridiculous. If not paying taxes is the most important factor in life, the logical thing to do is never earn anything, never spend anything and don't own anything taxable. I can't imagine trying to live a life worth living by that approach.
 

Laurifer

Woodpecker
Gold Member
We have FATCA (Foreign Account Tax Compliance Act) signed in to law in 2010 by Obama to thank for this bullshit. Fortunately Ron Paul and some others are in the midst of a legal challenge against it, in part citing it as a violation of the 4th Amendment as an undue search and seizure. This case will probably reach the Supreme Court.

Also, for Canadians, there is a group here (Alliance for The Defence of Canadian Sovereignty) arguing that Canadian banks cooperating with the IRS and reporting on its own citizens violates the Canadian Charter of Rights & Freedoms due to discrimination based on citizenship and national origin. This group has backed individuals suing the Canadian federal government.
 

samifon

Pigeon
SlickyBoy said:
If you want to renounce your citizenship and get rid of your US passport altogether, that will take about ten years and last I looked, renunciation has to be for some other reason aside from purely avoiding taxation.
I don't know where you've heard ten years. The approval shouldn't take more than a couple of months. Citizenship can be renounced for tax reasons, but with the Reed Amendment, the government has the right to ban those people from entering the country.
 

SlickyBoy

Ostrich
samifon said:
SlickyBoy said:
If you want to renounce your citizenship and get rid of your US passport altogether, that will take about ten years and last I looked, renunciation has to be for some other reason aside from purely avoiding taxation.
I don't know where you've heard ten years. The approval shouldn't take more than a couple of months. Citizenship can be renounced for tax reasons, but with the Reed Amendment, the government has the right to ban those people from entering the country.
It was a while ago; I went back and checked just now and yeah, the IRS modified things a bit back in 2008. So no, it doesn't have to be a long a process, but there are still tax considerations to think about that can cover several years.
 
What "Onshore" companies like UK, Ireland, Singapore etc. have private registers? I'll be incorporating a new company and I want the records to be private I don't want my info coming up showing I own the company.
 
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