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Article #180: Offshore Banking Myths

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10 Biggest Offshore Banking Myths passwords. Due to terrorism and money
Explained laundering laws these accounts came to an
Introduction - Today offshore banking is end. Other countries also issued numbered
a hot topic of much interest to many accounts. There are still numbered
living in countries where litigation and accounts in Switzerland but they are not
confiscation of assets from various like the old days. The Swiss banks
sources is a problem. This has caused a require ID and limit the access to the ID
large amount of people in various to a few select bank employees and issue
jurisdictions to move their money a numbered account this way. Nothing like
offshore. We will explore the 10 Largest the old Swiss numbered bank accounts.
Myths pertaining to Offshore Banking. These accounts will of course draw a lot
Definition of Offshore Banking - Offshore of unwanted attention when wires are sent
banking is a term that used to pertain to and received and in some countries the
using a bank in a Caribbean island offshore banks will refuse to send or
jurisdiction. Today the term applies to receive wires to such accounts. Panama
one using a bank in a country other than has solved the problem by having dead
their own. The offshore jurisdiction of anonymous Bearer Share Corporations.
today could be a land locked country or These Corporations have no registry or
an island tax have country. If the database which records ownership of the
offshore bank is in another country than corporation. The ownership of the
the country of domicile for the corporation is based on who physically
individual then the bank can be labeled has the stock certificates. There is no
an offshore bank. requirement to report changes in
Offshore Banking Myth #1 - The offshore ownership as well. Panama also has
banking jurisdiction is the most anonymous foundations also with no
important element to look for. registry or database to record ownership.
Not true. The laws of the jurisdiction So when wires move to and from an
are of course important and vary from anonymous Panama Bearer Share Corporation
country to country and are vital but one or anonymous Panama Foundation no one can
must look to the bank itself. The determine who the natural persons are
soundness of the bank is most important behind the corporation or foundation
because what good does it do you to have because of the Panama Bank Secrecy Laws.
an offshore bank account in a bank A very nice combination of corporate and
located in the greatest privacy banking privacy legislation.
jurisdiction in the world if the bank For more information on Panama Bearer
fails. So a very financially sound share Corporations click here:
offshore bank in a jurisdiction with weak For more information on Panama
privacy laws would be better than a Foundations click here:
really financially weak offshore bank in Offshore Banking Myth #7 - Offshore Banks
the best privacy jurisdiction. Of course are fine if they are on a little island
certain countries monitor their banks Not true.
better than others like Panama is top One must also take into account weather
notch in this department. conditions of the jurisdiction
To learn more about Panama as an Offshore considered. Many of the offshore banking
Banking Jurisdiction go here: countries in the Caribbean get hit with
Offshore Banking Myth #2 - All offshore hurricanes and storms of a great
banking jurisdictions are about the same. magnitude. This can cause their internet
Not true. One must see if the country has and phones to go out for weeks at a time.
tax treaties with other countries. Tax I am most sure you would not be enjoying
treaties are where the fishing the experience of waiting for a few weeks
expeditions come from. One must gain a to see if your offshore bank is still
knowledge of the offshore banking laws in alive and well after their phones and
the particular jurisdiction being internet get knocked out. The reason the
considered. Many has been offshore Panama Canal was built in Panama is
banking jurisdictions have changed their because Panama has no hurricanes,
once favorable offshore banking laws earthquakes, volcanoes, tornadoes,
since 9/11 and are basically doing tsunamis etc. Panama is tops when it
business with people who do not take the comes to an offshore jurisdiction for
time and trouble to check the offshore offshore banking, corporations and
banking laws for the country in question. foundations.
For instance Belize does not have any Offshore Banking Myth #8 - The national
banking secrecy laws written in statues. currency of the offshore bank is
Switzerland has modified their laws to irrelevant.
suit the EU. Many of the Caribbean island Not true.
offshore banking jurisdictions have given Even if the offshore bank gives you an
in to EU and American pressure and being account in several currencies inquire
afraid of losing their cruise ship about the conversion costs. Frequently
business have changed their bank secrecy every time you convert a currency they
laws for the worse. move you first into their national
Offshore Banking Jurisdictions additional currency and then into the destination
information by country is included at the currency. At the end of the day this type
links to the right. of offshore banking conversion expense
Offshore Banking Myth #3 - No Offshore can be painful. Panama uses the US dollar
bank will ever reveal information about for it's national currency so this is the
the bank accounts or banking clients. currency the banks operate on with some
The truth is offshore banks will reveal euro accounts available.
some information in some cases. This For more information about Panama Bank
varies from case to case and country to Accounts click here:
country. Panama will cooperate in four Offshore Banking Myth #9 - The US Dollar
categories of crimes: terrorism, money is not stable enough for use in Offshore
laundering, narcotics trafficking and Banking.
child pornography. Countries have what is Think again.
called MLAT (Mutual Legal Defense What many do not realize is that a nice
Treaties) that call for the release of low currency on the international
information under certain defined exchange helps a country enabling it to
circumstances. Most offshore countries sell exports. It helps them with their
have Tax Treaties that call for the balance of international payments. It
release of other information to other encourages foreign tourism and they bring
countries in the treaty. Panama has no in foreign currency by converting to
tax treaties with other countries and is dollars. Do you really think the EU could
most unique in this respect being the let the USA lower the value of their
only offshore banking and incorporation dollar further? Think about what it would
jurisdiction without any tax treaties. In do to the price of US imports in the EU
Panama all tax offenses are considered like cars for instance. It would make
civil offenses. As a general rule the them cheaper. The EU would need to slap
MLAT treaties require that the crime on punitive taxes and the USA would
being investigated by the requesting reciprocate in kind hurting their sales
country must also be a crime in the of cars in the USA. There is a lot of
country the information is being fatalistic talk of the US dollar falling,
requested from. true and it has fell but only to a level
So offshore banks will under certain of comfort for exports.
circumstances release information about What about housing prices falling in the
the bank accounts they have. Again, one USA? Well they were driven up by
must select the right country not only speculators and now comes the adjustment.
the right offshore bank. A nice drop of 30% to 40% in housing
To learn more about MLAT and Tax treaties prices will make the houses somewhat more
click here: affordable. Can the US fix it's problems
Offshore Banking Myth #4 - Offshore Banks domestically? Probably much could be done
are regularly Licensed Banks. if they wanted to do something. They
No so. could create tax incentives for business,
Most offshore banks hold an offshore get interest rates down lower and so
banking license from the jurisdiction forth. On the broad horizon a steep drop
they are in. These licenses allow them to in the housing prices makes things more
conduct full banking activities, just not affordable versus constant speculation
with any resident of the country they are which would eventually drive the housing
located in. In some countries they are prices to the point where a 3 bedroom 2
also prohibited from conducting business bath 180 sq meter home would cost
with any corporation or trust formed in $1,000,000 in a small city and $6,000,000
that country as well. If this is going to in a major area. A country is better off
scare you I do not know what will. The with affordable housing where housing
offshore jurisdiction issues a license to prices are set by people wishing to live
an offshore bank that does not let them in the house because they like the area,
bank with anyone in the country. Not too the schools are desirable, the house is
reassuring huh. In Panama our law firm close to shopping, airports, hospitals
only introduces clients to banks with etc. When housing prices are set by
full banking licenses that are allowed to people thinking if I buy this house now I
do business with the residents of the can sell it for a 27% profit in two or
country, have branches, drive through three years, this is a mania that will
tellers, etc. end poorly. This is the end of this mania
Offshore Banking Myth #5 - Offshore banks in the USA. They are adjusting not
that are part of a large international collapsing.
conglomerate will compromise your There are still branch banks in rich
privacy. neighborhoods of South Florida, Southern
Not so. California, parts of New York city, etc
The general line of unfounded thought is where these branches of US banks have a
that if the international bank has a branch office with in excess of
branch in the USA or EU it can be $100,000,000,000 (one hundred billion
compelled to reveal banking records from dollars) in deposits. I mean the little
the offshore country where it also has a neighborhood branch offices have this
bank. If you are in an offshore country much on deposit, of course the whole bank
like Panama this would be unlikely to is much larger. There are a lot of people
happen. The bank in Panama is a separate with many millions of dollars in the USA
corporate entity from the banks in other and they tend to congregate near each
countries. The bank in Panama would have other in the same communities. We could
it's own Panama banking license and would also talk about all the stock, option
be bound by Panama banking secrecy laws. future exchanges all working in dollars
It would be a violation to give access but then this would go beyond the scope
To employees located in another country of the article.
not bound by Panama bank secrecy laws. Of So let's say you are scared of the US
course some jurisdictions that used to be dollar and go into Euros and the dollar
secure with their banking laws are no strengthens back to where it was and you
longer secure. Again this is a matter of lose 25% of your value? The dollar is
knowing your jurisdiction and bank. At already down and it is not likely that
times clients of our law firm ask us to the other countries would want to see it
get them a bank account with a bank that go down further since they would suffer
does not have any operations outside of in the long run competitively from such a
Panama and this is of course a request we drop. We suggest that one need not be
can readily accommodate. afraid to have an offshore banking
Offshore Banking Myth #6 - Offshore banks account in US dollars but we also offer
will create numbered bank accounts. Euro accounts for those who need them.
Not really. Offshore Myth #10 - It is illegal to own
The offshore numbered bank account was a an offshore bank account.
creation of Switzerland mostly and these Not so.
came to an end in the 1980's. They We are not aware on any jurisdiction that
originally were accounts requiring no makes it illegal to have an offshore bank
identity documents and no name. They were account.
operated by account numbers and






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