| With financial success comes many great | | | | official is caught disclosing client |
| opportunities and freedoms, but there is also | | | | information. |
| a dark side with high income earners | | | | |
| subjected to higher income tax rates. In the | | | | In addition to the rock solid privacy and |
| post 9/11 world, many offshore banking | | | | secrecy laws in place Panama also provides |
| jurisdictions have signed tax treaties and | | | | asset protection vehicles that are not |
| disclosure treaties with the US government | | | | subject to income taxes. |
| with the goal of stamping out money | | | | |
| laundering, drug trafficking, terrorism and | | | | Panama bank accounts can be secured for as |
| other illegal activities. | | | | little as US$695 and come with online banking |
| | | | access, ATM card, and rock solid privacy |
| There are a few places left in the world that | | | | protection. |
| cater to offshore banking clients by | | | | |
| providing solid privacy and protection laws. | | | | Even when banking in countries with good |
| Offshore banking is a bank located outside | | | | asset protection laws depositors can run into |
| the country of residence of the depositor. | | | | privacy troubles. The Cayman Islands as a |
| | | | good example. The Cayman Islands has laws |
| Generally offshore banking provides legal, | | | | that send bank officials to jail for |
| financial and tax advantages to the | | | | disclosing information to the IMF, CIA or |
| depositor. The Bahamas used to be a haven for | | | | Treasury Department. |
| offshore banking but since they introduced | | | | |
| stricter banking laws that give the banks the | | | | In recent financial news a bank owner from |
| discretion to provide 45% of their collected | | | | the Cayman Islands named John Masterson |
| information about their clients to | | | | allegedly reported over 1 year worth of his |
| authorities who ask. | | | | bank's records to the United States |
| | | | government that got a lot of US taxpayers |
| On the flip side of the coin the Republic of | | | | into hot water. If the banking secrecy laws |
| Panama has total banking secrecy laws in | | | | of the Cayman Islands were strictly enforced |
| place in spite of pressures from the IMF and | | | | in this case, Mr. Masterson would be serving |
| US government asking them to report any | | | | a long sentence in jail. Mr. Masterson |
| suspicious activity to local authorities. | | | | currently lives free so anyone considering |
| Banking secrecy laws in Panama protect | | | | offshore banking beware, no offshore setup is |
| clients through the use of fines, employment | | | | perfect. |
| termination and even imprisonment if an | | | | |