Guide to Offshore Banking, Anonymous Corporations, Debit cards & Taxes
Guide to Offshore Banking, Anonymous Corporations, Debit cards & Taxes
Offshore banking is designed to offer enhanced financial privacy, provide tailor-made financial services which will optimize your existing assets, preserve your wealth and allow you to conduct transactions anonymously and even possibly minimize taxes.
What are some of the advantages of an offshore bank account opened with an International Business Corporation or IBC?
1. Anonymous ownership/directors
2. No accounting or financial reporting requirements
3. No corporate taxes
4. Financial transactions are conducted in the business name and not your personal name
5. Immunity from lawsuits outside your country of incorporation in most cases
6. Excellent way to protect assets
7. Multi-currency banking allows clients to hold fund in different currencies.
8.Using a separate No-Name offshore debit card you can access funds and spend money without the risk of leaving records of your purchases or cash withdrawals.
9.Less restrictive laws in most offshore jurisdictions allow you conduct your business more freely with less regulation.
10.Unlike most onshore corporations there is no need for paid in capital to open your IBC
Offshore banks cater to a wide variety of clients; from online businesses, expatriates and international executives, to those looking to establish an effective way to transfer wealth to their heirs. It’s ideal for people looking to diversify their funds internationally while guarding against unnecessary taxes and minimizing financial uncertainty, alongside those who need the flexibility and freedom of efficiently dealing in more than one currency.
Offshore banking has become increasingly more complicated in recent years due to recent Tax Information Exchange Agreements (TIEA's) between several offshore banking centers such as Switzerland, Bermuda, Cayman Islands, Bahamas, BVI (British Virgin Islands), Gilbraltar, Guernsey, Jersey, the Isle of Man as well as other less famous offshore jurisdictions. Nonetheless, there will continue to be methods and jurisdictions where one can still bank offshore with privacy and safety.
Things to consider before opening an offshore bank account
Forgot about opening a Swiss personal account or numbered bank account and being able to hide your money or fail to pay your taxes as this approach no longer works. In fact, the Swiss government recently agreed to turn over a list of names of over 5000 Americans with "secret" offshore bank accounts to the IRS. Personal bank accounts provide almost no privacy.
Today, the only real way of banking with any degree of privacy requires the formation of an international business corporation or IBC so that your transactions are not conducted in your own name, rather they are conducted in the name of an anonymous offshore corporation.
Without a corporation all transactions are conducted in your personal name and if you are transferring money other than using IBAN transfers between EU banks, every SWIFT transaction will be recorded and kept in the United States until 2012. Even if you are not an American there are concerns about information and financial transaction privacy since it is believed the US might share this data with the other countries on request. No personal SWIFT transaction is safe today.
Forming an Offshore Corporation or IBC
The most popular jurisdictions for incorporation are Belize, BVI, and Seychelles which offer anonymous ownership meaning there is no way for someone to publicly find out who owns the corporation.
Corporations in Belize, BVI and Seychelles require only one "director" which can be a legal person or an another corporation can serve as the director or shareholder of the IBC. The director does not have to be resident of the country of incorporation. There are no requirements for corporate secretary however there is a need to have a registered office and registered agent which is provided by the firm that forms the corporation for you. Your registered office will accept any official legal mail and this address is used in the event of a lawsuit. Offshore jurisdictions do not honor US or EU court orders and plaintiffs will be required file suit in the court of your jurisdiction which is extremely difficult and costly to do. If your corporation has less than several million dollars the fact is there is little chance someone will even attempt to sue you if your business is located offshore.
Corporation names can be almost anything accept restricted words like bank, trust, savings and loan, building society, Royal, etc.
The incorporation process is very simple and takes usually no more than a few days and requires nothing more than some information about your business, and an ID and proof of address scan.
Note: There are a large number of offshore incorporation firms that DO NOT provide bank accounts with the purchase of a corporation or charge extra. It is much more difficult and expensive to set up banking on your own. Offshore Privacy Ltd. always provides offshore banking with every corporation we sell.
Foundations and Trust
A foundation is a structure that is used in estate planning and asset protection however it offers some unique features. Unlike an IBC or corporation which has "owners", a foundation does not, it has beneficiaries much like a life insurance policy. A typical structure would involve a foundation owning an IBC which conducts business offshore. Using a foundation to own an IBC the client can state they are not the owner of a foreign controlled corporation as a foundation owns the IBC. A Panama Private Interest Foundations (PIF) can also be used for Estate Planning where the Founder transfers title to current assets and has the Panama Foundation acquire real estate, assets and open bank accounts and investment accounts. A PIF is formed by a nominee council from Panama, a founder (normally a nominee also) and a protector, which is a position "off the books" generally filled by the client who can then direct the foundation in complete anonymity as there is no record of their involvement in the foundation. A PIF is used in Estate Planning by setting up triggering events that will result in certain actions by the foundation such as death or incapacity of a protector or change in beneficiaries who are generally the client and their family.
A trust as described by Wiki is an arrangement whereby property (including real, tangible and intangible) is managed by one person (or persons, or organizations) for the benefit of another. A trust is created by a settlor who entrusts some or all of his property to people of his choice, known as the trustee. The trustee hold legal title to the trust property (or trust corpus), but they are obliged to hold the property for the benefit of one or more individuals or organizations (the beneficiary), usually specified by the settlor, who hold equitable title. The trustees owe a fiduciary duty to the beneficiaries, who are the "beneficial" owners of the trust property. Meaning the actions of the trustee must benefit the beneficiaries.
The trust is governed by the terms of the trust document, which is usually written and occasionally set out in deed form. It is also governed by local law. The trustee is obliged to administer the trust in accordance with both the terms of the trust document and the governing law.
Today, offshore trust are used in a similar fashion to a that of a foundation, however with a trust, it is the trustee and not the client or founder that directly manages the assets or bank accounts per the instructions of the client. This type of trust banking or nominee banking insures that the clients information is in no way connected to the bank account or assets.
Corporation, IBC Annual Renewals
Each year your corporation must renewed for it to remain in good standing and continue to bank offshore. Renewal fees for Belize for example are only 350 Euro a year without nominee director through Offshore Privacy Ltd. This includes both the annual Belize Gov't fees, registered office for legal mail and registered agent fees and expenses.
Beware of other incorporation firms that offer very low cost incorporation fees yet who normally have very expensive annual renewal fees from $750 -$1250 per year.
Using Nominee Directors, Nominee shareholders or Corporate Directors
Even though most IBC's offer private corporate ownership, some clients wish to add an additional layer of privacy and protection, electing to have a professional nominee director sign for the corporation. The nominee in turn provides "power of attorney" to the actual client or beneficial owner which allows you to operating the company and open the corporate bank account. For the safety of the client, the nominees also provide a signed and undated letter of resignation from the IBC or corporation so that if at any time the client wishes to change the director or take over the corporation themselves they may do so.
One thing to consider when thinking about a nominee director/shareholder is most banks will require an updated power of attorney each year meaning you must renew your corporation and pay the annual fees or you can lose access to your account until it is renewed since the nominee director is giving you the power of attorney to operate the corporation.
Information Sharing and safety of personal information with an IBC?
An Offshore corporation or IBC's director and shareholder information is completely private and anonymous to the public. There is no way an individual can find out your personal information without filing suit in your country of incorporation. For example in Belize, if a US or EU civil court issued an order to Belize to provide the name the owner/shareholder of an IBC, Belize would not honor this request. If it is a criminal charge, the request with evidence of a crime must go through the Belize Financial Intelligence Unit (FIU). The FIU contacts the registered agent and the client to obtain additional information and then decides if there is enough evidence of a crime to send the case to a Belize judge. A Belize judge then reviews the information and evidence and decides if there is sufficient evidence to release the clients information. If the client is using our nominee director service, it is the name of the nominee director that is released in this case and agency or gov't then needs to repeat the above steps in Dubai, UAE where our nominee is based to obtain the real owners information.
The level of privacy and anonymity associated with your offshore corporate bank account depends to a great degree on where you choose to bank and if there are TIEA agreements between your country of residence and the country of your offshore account. It is also important to stay abreast of the changes as they occur in the future which may require you move your banking to another jurisdiction that does not have an agreement. To have 100% anonymous banking you will need to use nominee banking or trust banking. We will discuss this further.
With that said information sharing in jurisdictions without an TIEA uses the MLAT if one exit or Mutual Legal Assistance Treaty which most countries are a party too. Unlike the TIEA, the MLAT requires a much more complicated and difficult process for a requesting country to find information about a citizens suspected of violating the law or evading taxes. In some countries the people must be guilty of tax fraud rather than tax evasion and in every instance, the requesting country must provide supporting evidence the claim that a crime has been committed and in most cases in must also be considered a crime where you bank offshore. Other than very large tax cases usually involving millions of dollars, serious fraud also involving millions of dollars or very serious criminal charges such as drugs or murder, extortion, kidnapping there are few cases brought forward using the MLAT.
In the past client could obtain bearer share corporations and open a bank account and conduct business completely anonymously using nominee directors and the client holding the shares of the corporation. That is no longer the case. Today all banks require a person to sign as the responsible party for the corporate bank account who is also able to conduct transactions on behalf of the company. Corporations that have bearer shares are normally required to send the original shares to bank so the corporation cannot be transferred to another party anonymously.
Bearer share corporations are ideal when used to own other corporations when there is no need for banking. For example a client can form a EU corporation in Scotland for the purpose of doing business in the EU and then have a Panama or Seychelles IBC with bearer shares server as the "director" of the corporation . Bearer shares are no ideal for corporations wishing to conducting banking offshore.
Specialty Corporations and Licenses for Online Gaming, Financial Services, Forex and 3rd party Financial Transactions and Escrow Services.
A basic IBC allows clients to engage in any unregulated business such as general trading or online businesses. To engage in certain restricted businesses such as online gaming, financial fervices, Forex and 3rd party financial transactions and escrow services requires a different type of corporation and in some cases a license.
PayPal like 3rd Party Services or Escrow services:
To accept payment for clients and then handle disbursements client need a specialty corporation in most cases. We recommend the Mauritius Global Business Company 2, or GBL2. Through our partner in Mauritius we are able to provide clients with the appropriate corporation and license to handle 3rd party payments and escrow services as well as corporate banking in Mauritius who allow this type of service. Some clients conduct as many as 200 transactions a day. The cost of the service ranges from 2500 Euro to 3500 Euro including account opening.
Forex Trading or Online Investments Trading for clients
To engage in Forex trading or Investments on behalf of other clients requires a license. Futhermore you should avoid doing business with an unlicensed Forex or Investment firms. We recommend the Mauritius Global Business Company 1, or GBL1 with a Investment dealer license. Through our partner in Mauritius we are able to provide clients with the appropriate corporation and license to trade Forex or handling online investments for clients as well as the necessary corporate banking in Mauritius that allows these types of services. The cost of the service ranges from 6000 Euro to 6500 Euro including account opening.
Online Gaming
To operate an online casino requires a license. Be believe Costa Rica is the best location for this as there are currently very low taxation on an online gaming firm incorporated and licensed in Costa Rica. While in the past Costa Rica did not require a license that has since changed. The cost of incorporation and the Costa Rican gaming license is approximately 6995 Euro. Banking is not included in this estimate as banks in Costa Rica do not open remote bank accounts. We can offer a few alternatives for banking.
You are ready to open an offshore corporate bank account -- which bank is best?
The best jurisdiction for opening your corporate bank account depends on a number of things:
1.The residency of the beneficial owner/client
2.The type of business you are operating – some banks are more open to certain high risk business than others.
3.If you can provide a reference letter to the bank, 75% require this today, 25% do not
4.Your individual or business banking needs such as an IBAN account for less expensive transfers
5.How soon the client needs to have the account opened. Banking can take from a few days to a few weeks to open.
6. The level of privacy and anonymity the client requires. If the client requires 100% anonymity there are various solutions available that we can discuss in private.
We will advise our clients based upon the above which are the best jurisdiction for banking to meet their particular needs.
What will the offshore bank require to open an account?
Please note every corporate bank account must have an authorized signer who is capable of conducting transactions through the account and online. This signer is known to the bank and must provide identity documents. In most cases it is the client. In a few cases the client will use a professional nominee banker who we can supply who will sign for the account and either manage the bank account or provide the client the ability to manage the account themselves. Please note that nominee banking is a much more expensive arrangement and requires monthly management fees which represent a percentage of the deposits.
Most banks will require the following items of the corporate bank signer and/or director.
1.Notarized passport or government issued ID
2.Original or notarized proof of address such as a bank statement, utility bill or credit card statement.
3.In some cases a professional reference letter for the bank signer from a lawyer, banker or accountant.
4.Signed application and forms provided to you by the formation company
Optionally, we have access to a fully licensed bank in Cyprus (not North Cyprus) that allows our clients to send in scanned copies of the above items rather than notarized copies of items 1,2,3.
How to conduct financial transactions anonymously offshore ?
Now that your corporation is formed and your corporate bank account is opened it is time to fund your account. It is important that you do not directly fund your offshore account from your local onshore bank account as this can link your offshore account bank to you.
There are a few ways to fund your account without using your bank account.
1.Ask clients or merchants to transfer funds to your new corporate account offshore
2.Use an offshore trust account to forward funds to and from your account – we offer this service if it is needed.
3.Purchase digital currencies and then sell them through another exchanger for a wire to your new corporate bank account.
The risk of using a bank issued offshore debit cards
If you want to access some of your funds for day to day living or to purchase things you will want to use an offshore debit card. While offshore banks issue corporate debit cards issued by either Visa, MasterCard or American Express there are significant risk associated with using a card directly linked to your bank account.
Several years ago tax services including the IRS began ordering Visa, MasterCard International and American Express to provide them with the names of all clients from offshore banks. The tax agency then looks at these records to find clients with specific billing address or use of the cards in their own country.
Another risk is almost all corporate credit cards are issued with both the corporation name and the clients name on the card now due to requirements from the Visa/MasterCard. When using your bank issued offshore debit card at the ATM, POS or online you can pass information on to your government that tells them your offshore corporation name, offshore bank account and your name.
Offshore Privacy Ltd. recommends the use of non-attached, no-name debit cards coded as gift cards with no name printed on the card or recorded on the magnetic strip to access up to $240,000 a year. Our cards are loaded via bank wire, Western Union or Money Gram. When withdrawing money at the ATM or using the card at the point of sale (POS) no personal information is based on to the your countries government and as such their use is 100% anonymous.
The "golden rules" of offshore banking
There area few very important rules you should obey when using an offshore corporation and bank account that can help protect your privacy.
1.Never use a personal offshore bank account
2.Never tell anyone you have an offshore corporation or bank account.
3.Do not request or use a bank issued debit card
4.Never transfer funds directly to or from your onshore bank account to/from your offshore bank account.
5.Never have your offshore bank send bank statements of transaction records. Either have the bank hold your statements, send email statements of use a drop mail address with re-mailing.
6.Never send an offshore wire to pay for things in your home country, instead use an offshore trust account or cash from your no-name, none attached ATM card .
Offshore Privacy Ltd. is a a trusted supplier of offshore services for Talkgold members for 3 years and has been forming corporations offline for over 5 years. We are located "offshore" and outside of the EU or US.
Offshore Privacy Ltd. offers no-name offshore debit cards, offshore banking and incorporation services in Belize, UK, Scotland, New Zealand, BVI, Seychelles, Panama and Mauritius, Liechtenstein, Cyprus, Antigua, St. Lucia, Dominica, Cape Verde, Latvia and Tanzania.
Please contact us directly to discuss your particular needs as there is no such thing as a "standard" offshore structure. Any communication between our clients is strictly confidential. All client records are maintained by an attorney in a non US/EU country.
Guide to Offshore Banking, Anonymous Corporations, Debit cards & Taxes
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