Originally Posted by TheOffshoreAdvisor
Absolutely true. In fact we have a new partnership with a Caribbean bank and brokerage and they explicitly say "No US citizens" as they do not wish to deal with the hassles of FACTA reporting.
Despite all the fear-mongering (some of it is justified), we have to wait and see exactly how FACTA will be interpreted. I think the key distinction will be if the account holds USD. Of course if the account is not in USD, will the lo, you have to pay two exchange rates (USD --> local currency of account and then local currency --> USD or purchasing currency). I think what FACTA is after is USD accounts outside the USA, where the IRS does not have direct control over it.
Anyway, isn't it easier (and overall cheaper) to just establish residency outside USA? Either via second passport
or visiting/establishing residency in a suitable country? Both take some time, but those who are serious about international commerce should consider these options.
One piece of advice: before you consider using "agents" to open up your magic IBCs and bank accounts, physically get on the ground in the country and/or visit expat forums that specialize in the country of interest. Much more likely to get accurate information this way. It may cost you a plane ticket, but the overall savings and experience of being directly involved in the process reduces the likelihood of scam significantly.