| First it needs to be stated that no one | | | | working in the shops, restaurants, as |
| has a crystal ball which predicts the | | | | tour guides, taxi drivers etc. So more |
| future. These thoughts are just opinions | | | | jobs are at stake in the tourism |
| and should be taken as such not as legal | | | | business. We also have to take into |
| or tax advice. We will try to show the | | | | account the resorts these countries have |
| political positions of the countries | | | | which create even more jobs and generate |
| that are not in favor of the tax haven | | | | revenue in the form of a hotel room tax |
| offshore jurisdictions and the position | | | | built into the rates. These countries |
| of the tax haven countries. The | | | | also charge a head tax on every person |
| countries most outspoken against | | | | coming into their country. Bottom line |
| offshore banking and offshore | | | | is there is much more money in the |
| corporations are Australia, UK and | | | | tourism business than there is the |
| USA.Today there is a great outcry from | | | | offshore business for the government of |
| these and other countries about the tax | | | | these jurisdictions. The governments of |
| saving benefits afforded to citizens of | | | | these countries don't make much off of a |
| certain countries by going offshore. | | | | bank account for instance, actually |
| These countries claim that their | | | | nothing. They have no income or capital |
| constituents are cheating them out of | | | | gains tax. The offshore corporations |
| billions of dollars of taxes by going | | | | would pay a few hundred dollars a year |
| offshore. The offshore jurisdictions | | | | in taxes but that was it. The banks |
| that are considered the tax havens say | | | | would pay a few thousand dollars a year |
| that is a nice allegation but we are not | | | | for their licenses. So these countries |
| your collection agency and do not ask us | | | | sold out on offshore privacy to protect |
| to change our bank and corporate privacy | | | | their tourism. If they did not do so the |
| laws because your constituents do not | | | | countries allowing tax free importation |
| want to pay taxes, this is your problem | | | | from these countries of tourist bought |
| not ours. The actual amount of taxes | | | | items might go away. Tourists returning |
| that are avoided unlawfully is a figure | | | | from these countries by ship or air |
| that one can only take a guess at. Many | | | | might find themselves stuck in long |
| people set up offshore structures to do | | | | lines while they are searched and |
| business outside of their home country | | | | interrogated by authorities of various |
| and are not in violation of any laws the | | | | affected countries which would quickly |
| way they conduct their business affairs. | | | | and seriously discourage tourism to |
| Many people live in other countries and | | | | these countries. Other countries like |
| need to own offshore bank accounts, | | | | Switzerland, Lichtenstein, and |
| offshore corporations, offshore real | | | | Luxembourg sold out due to pressure from |
| estate, etc. Many people use offshore | | | | the EU. But now we are seeing a reversal |
| privacy to protect themselves from | | | | in position regarding the EU, not much |
| identity theft, kidnapping, blackmail, | | | | of a reversal but at least a sigh of OK |
| and possible extortion.Let me use an | | | | enough is enough.In recent months the |
| analogy to make a point. In Latin | | | | USA was exposed by the New York Times |
| America there is an organization of five | | | | Newspaper in a scandal whereby they were |
| states called Mercosur. Mercosur | | | | monitoring SWIFT wire transactions for |
| consists of Argentina, Brazil, Paraguay, | | | | some years. SWIFT is a private company |
| Venezuela, and Uruguay. Mercosur also | | | | that enables banks to communicate with |
| has associate members which are as | | | | each other securely including sending |
| follows: Chile, Bolivia, Peru, Columbia | | | | wire transfers. SWIFT machines require a |
| and Ecuador. The Mercosur countries | | | | separate terminal and line so as to make |
| engage in free trade and easy border | | | | them most secure. The USA served a court |
| controls with no passports, just | | | | order on the SWIFT people in New York to |
| national identity cards for border | | | | turn over all the data they requested |
| crossings. Mercosur recently issued a | | | | and gag ordered them to not mention what |
| statement that they would in the future | | | | was going on. It went on for two years. |
| strive to resist any further attempts to | | | | This got the EU nations most upset. |
| get them to spend more resources on | | | | While they have not actually prosecuted |
| narcotics enforcement that stems from | | | | the SWIFT people for violating the |
| the UN. The UN says its member countries | | | | banking laws of the various European |
| must enact certain kinds of laws to | | | | nations affected, there was serious talk |
| control narcotics and states these laws | | | | of it. Whether or not obeying a USA |
| and insists on enforcement policies. The | | | | court order to violate the banking laws |
| Mercosur spokesperson stated that this | | | | of other nations is a viable defense has |
| was an irrational policy since it has | | | | never been tested in any court, yet |
| not worked for over a quarter of a | | | | anyway. The EU position on this was they |
| century and it was severely draining the | | | | must get the USA to understand their |
| resources of their countries. | | | | banking laws call for privacy. This of |
| Essentially they said they were sick and | | | | course is not exactly giving ground for |
| tired of the United States which is the | | | | more privacy invasive laws which is what |
| nation driving these policies through | | | | we mean by a reversal.Today the most |
| the UN, making their problems, the | | | | privacy oriented jurisdiction in the |
| problems of other countries and they | | | | world is Panama. Panama has 400,000 |
| were going to collectively attempt to | | | | corporations registered there. Panama |
| legalize narcotics in their own nations | | | | requires corporation formation agents to |
| to free themselves from this heavy | | | | be lawyers and their know your client |
| burden of narcotics enforcement. This | | | | rules are strict and call for criminal |
| has already begun to happen in Bolivia, | | | | penalties if not followed. Panama banks |
| Paraguay, Argentina and Venezuela with | | | | follow tight anti-money laundering laws |
| the abundant legal availability of cocoa | | | | as well as know your customer laws. |
| leaf. The cocoa leaf has cocaine | | | | Panama does still allow for anonymous |
| alkaloids (real cocaine) and is commonly | | | | bearer share corporations which do not |
| used as a chew like chewing tobacco leaf | | | | require the entry into any registry of |
| or made into tea leaves. Street cocaine | | | | any ownership names or identities. The |
| is perhaps 30 times as potent and is | | | | anonymous bearer share corporations |
| diluted with harmful substances like | | | | combined with Panama bank secrecy laws |
| turpentine, ether, etc. Cocoa leaf is a | | | | make for the best privacy in the world |
| natural plant product used for centuries | | | | today. Panama foundations are also |
| as a stimulant by people living in the | | | | anonymous with no owners, beneficiaries |
| high altitudes of Bolivia, farm workers | | | | or protectors names appearing in any |
| etc. One can now see coca tea being sold | | | | registry or database. Panama is also in |
| freely on the internet but I would | | | | no tax treaty with any other country and |
| strongly advice you not to order any | | | | is fairly unique in this regards. Of |
| because you may get charged with | | | | course one can ask the question if |
| narcotics importation, seriously because | | | | Panama can sustain their practices under |
| it can be lab tested to contain cocaine. | | | | pressure from other nations.First off |
| So my point is a lot of countries have | | | | Panama does follow the FATF (Financial |
| said ok enough is enough when it comes | | | | Action Task Force) practices. Secondly |
| to narcotics. It is not working leave us | | | | Panama does not exactly have a lot of |
| alone, take care of your own problem. So | | | | tourism, actually it has quite a small |
| Mercosur countries are now worrying | | | | amount of tourism and most of their |
| about their own problems more and less | | | | tourism comes from Latin America not the |
| about the narcotics issues in the USA | | | | EU or USA. This means there is no |
| and other nations. I think you will see | | | | meaningful tourism that can be taken |
| more of the same type of thinking when | | | | away. Panama is a small country and 15% |
| it comes to offshore banking, offshore | | | | to 20% of the workforce is employed by |
| corporations, offshore foundations, | | | | the international banks. Panama has |
| offshore stock brokerage accounts | | | | 400,000 corporation registered there who |
| etc.Offshore jurisdictions have to go | | | | each pay $300 in annual corporate taxes. |
| through all sorts of compliance that is | | | | This comes to $120,000,000 dollars and |
| not needed in say the USA or the UK. One | | | | this is for a country of 2.9 million |
| offshore formation agent went to the USA | | | | people. Also consider these corporations |
| and was able to open eight USA bank | | | | are paying for resident agents, nominee |
| accounts in one day. In Panama a bank | | | | directors etc. Then we get into Panama |
| account can take five days after you | | | | Foundations which also collect $300 in |
| collect and submit the reference letters | | | | annual taxes each year plus nominee |
| and documents. In the USA and UK no bank | | | | council member fees. Panama will and has |
| reference letters are required to open a | | | | resisted attempts to compromise banking |
| bank account, neither are any | | | | secrecy and corporate secrecy.Again let |
| professional references required. In the | | | | us look towards history to see what we |
| USA and UK they do enforce money | | | | can learn, this time focusing on |
| laundering protective measures strictly. | | | | anonymous bearer share corporations. The |
| One can buy USA corporations or UK | | | | issue with anonymous bearer share |
| corporations without any of the due | | | | corporations is that when the |
| diligence requirements that are required | | | | international wires are monitored it is |
| from offshore jurisdictions. So the | | | | impossible to tell who the natural |
| playing field is not exactly level yet | | | | persons are behind the bearer share |
| these countries are screaming for more | | | | corporations sending or receiving the |
| controls not on themselves but on other | | | | wires. The British Virgin Islands used |
| countries. It seems that the offshore | | | | to offer anonymous bearer share |
| jurisdictions will scream enough is | | | | corporations. A few years ago they gave |
| enough if any further controls are | | | | in to pressure from the UK and stopped |
| imposed on them and resist them. Of | | | | issuing new bearer share corporations |
| course one wonders what further controls | | | | but they did make allowances for the |
| they could come up with that they | | | | existing bearer share corporations to |
| haven't already imposed.Let's look at | | | | remain anonymous for 10 years. After |
| history a little to see how things | | | | that time they would need to dissolve or |
| deteriorated in the past regarding | | | | operate in a non-anonymous mode. If we |
| offshore privacy and offshore banking. | | | | want to look on the dark side we can |
| Most of the older offshore tax havens | | | | consider Panama doing the same if |
| are also tourist destinations such as | | | | international pressure ever built up |
| Cayman Islands, Nassau, Bermuda, | | | | sufficiently to force a change. So of |
| Grenada, Belize etc. These countries | | | | course those owning an existing bearer |
| usually have little if any natural | | | | share corporation would be unaffected |
| resources and need to bring in | | | | for ten years and these corporations |
| everything they consume. While some of | | | | would probably go up significantly in |
| them avoid income taxes instead they | | | | value on the secondary market. We have |
| impose taxes on goods imported. These | | | | absolutely no indications subtle or |
| countries got heavily involved in | | | | otherwise that anything is going to |
| tourism as a way to keep their economies | | | | change in Panama.It is also a |
| moving. A cruise ship docking at these | | | | possibility that some other nations may |
| ports usually carries 2500 people. Each | | | | enter into the bank secrecy arena in the |
| person probably spends an average of | | | | near future and some other nations may |
| $100 a day when in this ports buying | | | | return to bank secrecy as well. Only |
| t-shirts, duty free liquor, tobacco, | | | | time will tell. Nothing we see gives any |
| jewelry etc. many spend a good deal | | | | inkling of an idea that Panama will |
| more. That is $250,000 per cruise ship. | | | | reverse on its position of bank and |
| These jurisdictions get from 3 ships per | | | | corporate privacy and it appears that |
| week, to 40 ships per week docking | | | | things may have already sunk to an all |
| there. The money from the cruise ships | | | | time low and offshore banking and |
| exceeds what would be earned from their | | | | corporate privacy may actually soon |
| previous offshore banking and | | | | start to improve, first with the wire |
| incorporation activities. Remember a | | | | transfer system and later on in other |
| bank that controls hundreds of millions | | | | areas.For more information on Offshore |
| of dollars of deposits can only have 50 | | | | Banking and Offshore Corporations go to: |
| or so employees. A thriving cruise ship | | | | Martinez is a senior partner at Panama |
| port can have thousands of employees | | | | legal Law Firm. |