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12 Offshore Banking Myths Busted

By: Doug Snarder

Offshore bank accounts are only for spies and criminals and money launderers -- Although no-one can claim that criminals don't use offshore bank accounts, their uses in this regard have been severely limited due to the MLAT treaty. In fact, many fortune 500 companies now bank offshore to protect their assets and to gain competitive tax advantages.

Offshore banking is too complicated for the average Joe -- This is actually true if the average Joe were to do all the legal work himself. Typically an offshore bank account is created in conjunction with an offshore corporation due to many governments taxing worldwide income of individuals. This sounds complicated but a good lawyer will have the entire package done in less than a week.

Its not worth going offshore unless you are wealthy -- Since it costs less than $2000 USD for an offshore bank account and a bearer share corporation with all the trimmings, offshore banking is within most people's reach. It is a very strong vehicle to protect your assets from lawsuits. Every business owner should have an offshore bank account and offshore company. In today's lawsuit happy world this is just good business practice.

Since 9/11 there is no such thing as bank secrecy. -- This is simply false. Several offshore jurisdictions like Panama have bank secrecy laws that impose prison sentences to those who violate your bank secrecy. In addition, Panama also has bearer share corporations that just a private as the infamous numbered Swiss bank accounts.

You must visit the offshore jurisdiction to open a bank account -- This is the case with some Swiss banks. Without an introduction in some offshore jurisdictions you can't get a bank account. Many banks in Panama work in this way. Fortunately, your offshore professional can provide the introduction necessary. Most clients don't even realize this is taking place in the background. They simply place their order and in a matter of a week or so they have an offshore corporation and bank account.

Offshore banking has been destroyed by the MLAT treaty -- If you are engaging in serious criminal activity this statement is true. For most people just trying to protect their assets this statement is totally false. In fact, countries like Panama, only comply in serious criminal cases, and deny many requests. The requesting country has to show that they already have strong evidence that a crime has taken place AND the activity in question has to be a crime in Panama too. So tax evasion, for example, is not a crime in Panama and so Panama would not entertain MLAT requests for information relating to tax evasion.

Tax information is shared between most countries now -- It is true that many countries have entered into tax treaties, but other more reputable offshore jurisdictions have not. Panama, for example, has no tax treaties with anyone.

Its hard to manage a bank account offshore secretly. -- Today all the major banks allow you to do your banking online using encrypted communications. Offshore banks are no exception. Online banking a common feature of an offshore bank account. In fact, you can even send a bank wire using your offshore bank account. This is a service many onshore banks don't have.

A court can order me to bring back the money -- If you are in a lawsuit already, and you move the money offshore, you must be careful under what circumstances. This will be considered a fraudulent conveyance. If, however, you take the money offshore before a lawsuit starts, and say donate the money to an offshore foundation, the money is not legally yours anymore. The judge cannot force you do something illegal. If the money is not yours he cannot order you to go and get it!

If I move money offshore, someone will be able to track down where it went -- If you were to wire the money to its final destination directly that would be true. Clients concerned with this usually move the money to a intermediary bank in another offshore banking haven. For example, they will wire the money to an bank in the Cayman Islands, and then rewire the funds to Panama. Someone coming after the money would have to break the Cayman Island's bank secrey to find out the money is now in Panama. This is not likely to happen and you would likely have plenty of time to move the money to a third or fourth jurisdiction. Because authorities know that, tracing money is only done is high profile cases.

I can use my offshore account do do the same things I do with on local personal bank account - This is true except for one feature. You cannot pay bills online in most offshore jurisdictions. Actually some banks have this feature but it will not apply to your local country. International bill payment is not offered by any bank I know of. Also this would likely not be a wise action anyway. Typically money kept offshore is not intended for day to day payments. Having said that, many offshore clients carry a bank card that they can use to withdraw cash anywhere in the world. Of course the bank card does not have their name on it or tie to them.

Americans, Canadians, and Europeans can't own an offshore account legally -- This is totally false. This mis perception is based on the fact that these jurisdictions now require an individual to report his/her worldwide income. Offshore bank accounts almost always come with a bearer share corporation or a foundation, which means the individual does not legally own the money. When the money is paid from the corporation to the individual then it becomes taxable income.

Article Source: http://www.topicinfo.com

If you have property or have money that you don't want to lose to an ex-spouse or a legal battle consider reading more of Doug Snarder's teaching on the Offshore Banking Account and Offshore Asset Protection
This article is available as a unique content article with free reprint rights.

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