How to Compare Offshore Jurisdictions

Today many unscrupulous firms are offeringdozens of countries. The only kind of corporation
corporations and bank accounts in many differentworth anything when it comes to privacy is a bearer
jurisdictions with a shopping list of countries availableshare corporation. By this what is meant is the
almost every one of them no longer any good, manyownership of the corporation rests with the person
being located on Caribbean islands and are misleadingwho has the physical stock certificates of the
the customers into thinking they are real offshorecorporation. Ownership need not be reported or
jurisdictions with privacy benefits. Wrong!!!recorded anywhere. A sale of the corporation does
Let's analyze some things to look for when shoppingnot need to be reported. This is what is called a
for an offshore jurisdiction.non-transparent corporation and is extremely disliked
Bank Secrecy Without this we are not interested.by many governments who think people have no
We want the bank to not be able to divulge anyrights to privacy. In Panama a S.A. Corporation or
information about the bank account including whetherbearer share company has no ownership reporting or
or not such a bank account even exists unless thererecording requirements. One merely hires professional
is an order from a competent court in the countrydirectors (which we provide) who appear as directors
where the bank is located. More secrecy than thison hundreds of corporations and that is that.
does not exist any place today. Numbered accountsDirectors are made public but you need not be your
are gone. Sparbuch accounts in Austria are all gone,own director, we provide professional nominee
yes I know people offer them for sale on websitesdirectors complete with resignation letters and
but they are all long gone and closed down. The bankgeneral power of attorney letter. Corporation privacy
secrecy laws must be written into the law of theis especially important since governments have taken
land in question. Belize has no such bank secrecy lawsto monitoring bank wire transfers including recently
written in their laws, people just seem to trust themthe Swift System scandal showing the USA was
even though there would be no legal penalty formonitoring Swift Transfers and we do not know to
them to reveal bank information if they see fit to dowhat extent and for exactly how long but is best to
so. We want bank secrecy laws to call for prison andassume the worst. If one uses an anonymous bearer
civil penalties for any violations in addition to allow forshare Panama Corporation there is lack of
one to bring suit against the bank for violations.transparency in that no one knows the ownership
Panama meets this test.behind the corporation, they only know the
MLAT Mutual Legal Assistance treaty. Many nationscorporation received or sent a wire and the other
have entered into these agreements. For a list ofside of the transaction. This serves to preserve your
countries that have entered into these agreementsprivacy to a large extent. Imagine how silly it is to
with the USA courtesy of the US Government clickuse an offshore corporation where ownership is
here:made public and can be computerized thus one could
It is shocking as to how many countries are in suchtell in seconds who is the person behind the
agreements. Even Panama is in such an agreementcorporation receiving or sending the funds. This is
but it is fairly limited in scope, see below:what is being sold all over the internet as an offshore
Essentially Panama will cooperate in a multi-nationalcorporation misleading the people into thinking their
case involving narcotics and money laundering (theseprivacy is being protected. Once again Panama
crimes need to be tied to narcotics). They also willpasses the test.
get involved in cases concerning child pornographyTaxation Free The offshore jurisdiction must be
and real terrorism. If you are not a narcotics dealertaxation free in that offshore derived income is not
and are not a money launderer (money launders aretaxed by the country where the corporation is
typically dealing with many millions of dollars), not adomiciled. Panama meets this test as does numerous
child pornographer, and not a terrorist you should notother countries. Panama also has no capital gains tax
be concerned by this. The MLAT requires that therefor you stock market investors and there is no
first need to a criminal prosecution case on file in theinheritance or probate tax. Panama passes this test.
criminal courts of the requesting government (whichWeather Considerations Many of these offshore
means no fishing expeditions) then through diplomaticjurisdictions are located on islands and are subject to
channels involving the embassies, requests are madepower outages from hurricanes. Also one must look
for information, then reviewed by Panama officialsfor risk from volcanoes, tsunamis and earthquakes.
and a decision on compliance is made or requests forJust what you don't need is a power outage from a
more information are made so a determination canstorm preventing you from getting your money out
be arrived at. These cases can take months andwhen you need it. The reason the Panama Canal was
even years for completion. At times the countrybuilt where it is, is because there is no risk from
where the bank is located has been known to oncehurricanes, tsunamis, volcanoes and earthquakes.
alerted to the problem, conduct their ownPanama passes the test.
investigation first and this usually requires them toInfrastructure One must look at the power
seize the relevant records and documents which cangenerators, telephone system and internet when
stall the process for a long time even years sinceevaluating an offshore jurisdiction. You don't want to
their justice systems typically moves quite slow andhave to wait days or weeks to be able to use your
statues of limitation can run out, please don'tonline banking or to be able to talk to your bank on
construe this to mean Panama does this routinely it isthe phone. Panama was basically built by the
just something that does occur from time to timeAmericans who just left it in 2000. It has American
around the world. The MLAT has no application tostyle phones, electricity, roads, etc. The cells phones
civil cases such as divorce, bankruptcy, civiland internet in Panama are as good as Canada or
judgments, business litigation, any sort of civilUSA. Panama passes the test again.
litigation, civil tax matters etc. Taxation matters ofGovernment Stability The last thing you need is to be
any sort are not covered by this as far as Panama isbanking in some tax haven offshore jurisdiction and
concerned. Income tax evasion is a civil (non-criminal)find out a revolution has taken place and you can kiss
offense in Panama. Switzerland cooperates on incomeyour money goodbye. Another possibility is like what
tax cases if the return is filed falsely like all incomehappened in Grenada when there was rampant bank
was not declared, things were omitted or so thefraud causing the closure and liquidation of the
complaining government says. Panama has nooffshore banks with people losing their savings.
extradition treaties. Panama passes this test.Panama is a stable democracy. Panama is a UN
Tax Treaties Many so called Offshore Jurisdictionsneutral country so a war is most unlikely. Panama is in
are in Tax Treaties. For a list of countries with taxa treaty with the USA concerning the Panama Canal
treaties with the USA click here. Panama has NO taxwhich was given to them by the USA in 2000. If the
treaty with any country. Even Switzerland and Belizecanal is threatened the USA has the right to step in
are in tax treaties as are most of the so calledto protect the Panama Canal. This means that if
offshore jurisdictions. Click here to see a list ofthere was a revolution (unlikely occurrence since
countries in tax treaties complete with links enablingPanama is a most stable democracy) the USA would
you to read the actual treaties, a real eye openerhave fighter jets there within an hour or two and by
click here:the next day one could expect to see a navy
Type of Bank License Many of these offshore banksaircraft carrier group in Panama Bay with an
have offshore banking licenses versus regular bankingexpeditionary force of marines. Next would be an
licenses. Let me explain. These island jurisdictionsairlift, paratroopers, helicopters, nuclear submarines
usually have different classes of bank licenses oneand you have the idea. Forget about an invasion,
class allows the bank to do business with onlyattack or revolution in Panama, it passes the test.
residents of the country, the other class usuallyCurrency Panama uses the US dollar as its currency.
encountered is the offshore license that allows theThe banks are on the US dollar and the ATM
bank to ONLY conduct business with non-residentsmachines dispense US dollars, they even use US
of the country, and they usually have a third class ofcoins. This means a stable currency. I know some of
license that allows the bank to do business with bothyou will say they like the Euro better fine but when I
residents and non-residents. It is a natural conclusionsay stable compare it to the Bahamian Dollar or
that a bank with an offshore only license is a riskyGrand Cayman Dollar. No currency conversion costs in
proposition at best since the government won't letPanama if you use dollars. Panama again passes the
them do business with the citizens of their country.test.
The banks we use in Panama are open to theEU Ties Panama has no ties that could erode privacy
citizens of Panama and are never offshore onlyagain passing the test. No reportage of income for
banks. Most of the bank accounts being offered byEU residents or collecting of withholding taxes. Tax
various web site businesses are with bank havingidentity numbers from your home country are not
only an offshore license.required to open a Panama bank account, own a
Corporation Privacy This is an important point. I seecorporation, buy real estate etc. Panama again passes
many websites selling offshore corporations fromthe test.