How banks work


How to Compare Offshore Jurisdictions

Today many unscrupulous firms are offeringpoint. I see many websites selling offshore
corporations and bank accounts in manycorporations from dozens of countries. The
different jurisdictions with a shopping listonly kind of corporation worth anything when
of countries available almost every one ofit comes to privacy is a bearer share
them no longer any good, many being locatedcorporation. By this what is meant is the
on Caribbean islands and are misleading theownership of the corporation rests with the
customers into thinking they are realperson who has the physical stock
offshore jurisdictions with privacy benefits.certificates of the corporation. Ownership
Wrong!!!need not be reported or recorded anywhere. A
sale of the corporation does not need to be
Let's analyze some things to look for whenreported. This is what is called a
shopping  for  an  offshore  jurisdiction.non-transparent corporation and is extremely
disliked by many governments who think people
Bank Secrecy Without this we are nothave no rights to privacy. In Panama a S.A.
interested. We want the bank to not be ableCorporation or bearer share company has no
to divulge any information about the bankownership reporting or recording
account including whether or not such a bankrequirements. One merely hires professional
account even exists unless there is an orderdirectors (which we provide) who appear as
from a competent court in the country wheredirectors on hundreds of corporations and
the bank is located. More secrecy than thisthat is that. Directors are made public but
does not exist any place today. Numberedyou need not be your own director, we provide
accounts are gone. Sparbuch accounts inprofessional nominee directors complete with
Austria are all gone, yes I know people offerresignation letters and general power of
them for sale on websites but they are allattorney letter. Corporation privacy is
long gone and closed down. The bank secrecyespecially important since governments have
laws must be written into the law of the landtaken to monitoring bank wire transfers
in question. Belize has no such bank secrecyincluding recently the Swift System scandal
laws written in their laws, people just seemshowing the USA was monitoring Swift
to trust them even though there would be noTransfers and we do not know to what extent
legal penalty for them to reveal bankand for exactly how long but is best to
information if they see fit to do so. We wantassume the worst. If one uses an anonymous
bank secrecy laws to call for prison andbearer share Panama Corporation there is lack
civil penalties for any violations inof transparency in that no one knows the
addition to allow for one to bring suitownership behind the corporation, they only
against the bank for violations. Panama meetsknow the corporation received or sent a wire
this  test.and the other side of the transaction. This
serves to preserve your privacy to a large
MLAT Mutual Legal Assistance treaty. Manyextent. Imagine how silly it is to use an
nations have entered into these agreements.offshore corporation where ownership is made
For a list of countries that have enteredpublic and can be computerized thus one could
into these agreements with the USA courtesytell in seconds who is the person behind the
of  the  US  Government  click  here:corporation receiving or sending the funds.
This is what is being sold all over the
It is shocking as to how many countries areinternet as an offshore corporation
in such agreements. Even Panama is in such anmisleading the people into thinking their
agreement but it is fairly limited in scope,privacy is being protected. Once again Panama
see  below:passes  the  test.
Essentially Panama will cooperate in aTaxation Free The offshore jurisdiction must
multi-national case involving narcotics andbe taxation free in that offshore derived
money laundering (these crimes need to beincome is not taxed by the country where the
tied to narcotics). They also will getcorporation is domiciled. Panama meets this
involved in cases concerning childtest as does numerous other countries. Panama
pornography and real terrorism. If you arealso has no capital gains tax for you stock
not a narcotics dealer and are not a moneymarket investors and there is no inheritance
launderer (money launders are typicallyor  probate  tax.  Panama  passes  this test.
dealing with many millions of dollars), not a
child pornographer, and not a terrorist youWeather Considerations Many of these
should not be concerned by this. The MLAToffshore jurisdictions are located on islands
requires that there first need to a criminaland are subject to power outages from
prosecution case on file in the criminalhurricanes. Also one must look for risk from
courts of the requesting government (whichvolcanoes, tsunamis and earthquakes. Just
means no fishing expeditions) then throughwhat you don't need is a power outage from a
diplomatic channels involving the embassies,storm preventing you from getting your money
requests are made for information, thenout when you need it. The reason the Panama
reviewed by Panama officials and a decisionCanal was built where it is, is because there
on compliance is made or requests for moreis no risk from hurricanes, tsunamis,
information are made so a determination canvolcanoes and earthquakes. Panama passes the
be arrived at. These cases can take monthstest.
and even years for completion. At times the
country where the bank is located has beenInfrastructure One must look at the power
known to once alerted to the problem, conductgenerators, telephone system and internet
their own investigation first and thiswhen evaluating an offshore jurisdiction. You
usually requires them to seize the relevantdon't want to have to wait days or weeks to
records and documents which can stall thebe able to use your online banking or to be
process for a long time even years sinceable to talk to your bank on the phone.
their justice systems typically moves quitePanama was basically built by the Americans
slow and statues of limitation can run out,who just left it in 2000. It has American
please don't construe this to mean Panamastyle phones, electricity, roads, etc. The
does this routinely it is just something thatcells phones and internet in Panama are as
does occur from time to time around thegood as Canada or USA. Panama passes the test
world. The MLAT has no application to civilagain.
cases such as divorce, bankruptcy, civil
judgments, business litigation, any sort ofGovernment Stability The last thing you need
civil litigation, civil tax matters etc.is to be banking in some tax haven offshore
Taxation matters of any sort are not coveredjurisdiction and find out a revolution has
by this as far as Panama is concerned. Incometaken place and you can kiss your money
tax evasion is a civil (non-criminal) offensegoodbye. Another possibility is like what
in Panama. Switzerland cooperates on incomehappened in Grenada when there was rampant
tax cases if the return is filed falsely likebank fraud causing the closure and
all income was not declared, things wereliquidation of the offshore banks with people
omitted or so the complaining governmentlosing their savings. Panama is a stable
says. Panama has no extradition treaties.democracy. Panama is a UN neutral country so
Panama  passes  this  test.a war is most unlikely. Panama is in a treaty
with the USA concerning the Panama Canal
Tax Treaties Many so called Offshorewhich was given to them by the USA in 2000.
Jurisdictions are in Tax Treaties. For a listIf the canal is threatened the USA has the
of countries with tax treaties with the USAright to step in to protect the Panama Canal.
click here. Panama has NO tax treaty with anyThis means that if there was a revolution
country. Even Switzerland and Belize are in(unlikely occurrence since Panama is a most
tax treaties as are most of the so calledstable democracy) the USA would have fighter
offshore jurisdictions. Click here to see ajets there within an hour or two and by the
list of countries in tax treaties completenext day one could expect to see a navy
with links enabling you to read the actualaircraft carrier group in Panama Bay with an
treaties,  a  real  eye  opener  click  here:expeditionary force of marines. Next would be
an airlift, paratroopers, helicopters,
Type of Bank License Many of these offshorenuclear submarines and you have the idea.
banks have offshore banking licenses versusForget about an invasion, attack or
regular banking licenses. Let me explain.revolution  in  Panama,  it  passes the test.
These island jurisdictions usually have
different classes of bank licenses one classCurrency Panama uses the US dollar as its
allows the bank to do business with onlycurrency. The banks are on the US dollar and
residents of the country, the other classthe ATM machines dispense US dollars, they
usually encountered is the offshore licenseeven use US coins. This means a stable
that allows the bank to ONLY conduct businesscurrency. I know some of you will say they
with non-residents of the country, and theylike the Euro better fine but when I say
usually have a third class of license thatstable compare it to the Bahamian Dollar or
allows the bank to do business with bothGrand Cayman Dollar. No currency conversion
residents and non-residents. It is a naturalcosts in Panama if you use dollars. Panama
conclusion that a bank with an offshore onlyagain  passes  the  test.
license is a risky proposition at best since
the government won't let them do businessEU Ties Panama has no ties that could erode
with the citizens of their country. The banksprivacy again passing the test. No reportage
we use in Panama are open to the citizens ofof income for EU residents or collecting of
Panama and are never offshore only banks.withholding taxes. Tax identity numbers from
Most of the bank accounts being offered byyour home country are not required to open a
various web site businesses are with bankPanama bank account, own a corporation, buy
having  only  an  offshore  license.real estate etc. Panama again passes the
test.
Corporation Privacy This is an important



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