Offshore Banking Myths

10 Biggest Offshore Banking Myths Explained				no name. They were operated by account
				numbers and passwords. Due to terrorism and
Introduction - Today offshore banking is a				money laundering laws these accounts came to
hot topic of much interest to many living in				an end. Other countries also issued numbered
countries where litigation and confiscation				accounts. There are still numbered accounts
of assets from various sources is a problem.				in Switzerland but they are not like the old
This has caused a large amount of people in				days. The Swiss banks require ID and limit
various jurisdictions to move their money				the access to the ID to a few select bank
offshore. We will explore the 10 Largest				employees and issue a numbered account this
Myths pertaining to Offshore Banking.				way. Nothing like the old Swiss numbered bank
				accounts. These accounts will of course draw
Definition of Offshore Banking - Offshore				a lot of unwanted attention when wires are
banking is a term that used to pertain to				sent and received and in some countries the
using a bank in a Caribbean island				offshore banks will refuse to send or receive
jurisdiction. Today the term applies to one				wires to such accounts. Panama has solved the
using a bank in a country other than their				problem by having dead anonymous Bearer Share
own. The offshore jurisdiction of today could				Corporations. These Corporations have no
be a land locked country or an island tax				registry or database which records ownership
have country. If the offshore bank is in				of the corporation. The ownership of the
another country than the country of domicile				corporation is based on who physically has
for the individual then the bank can be				the stock certificates. There is no
labeled an offshore bank.				requirement to report changes in ownership as
				well. Panama also has anonymous foundations
Offshore Banking Myth #1 - The offshore				also with no registry or database to record
banking jurisdiction is the most important				ownership. So when wires move to and from an
element to look for.				anonymous Panama Bearer Share Corporation or
				anonymous Panama Foundation no one can
Not true. The laws of the jurisdiction are of				determine who the natural persons are behind
course important and vary from country to				the corporation or foundation because of the
country and are vital but one must look to				Panama Bank Secrecy Laws. A very nice
the bank itself. The soundness of the bank is				combination of corporate and banking privacy
most important because what good does it do				legislation.
you to have an offshore bank account in a
bank located in the greatest privacy				For more information on Panama Bearer share
jurisdiction in the world if the bank fails.				Corporations click here:
So a very financially sound offshore bank in
a jurisdiction with weak privacy laws would				For more information on Panama Foundations
be better than a really financially weak				click here:
offshore bank in the best privacy
jurisdiction. Of course certain countries				Offshore Banking Myth #7 - Offshore Banks are
monitor their banks better than others like				fine if they are on a little island
Panama is top notch in this department.
				Not true.
To learn more about Panama as an Offshore
Banking Jurisdiction go here:				One must also take into account weather
				conditions of the jurisdiction considered.
Offshore Banking Myth #2 - All offshore				Many of the offshore banking countries in the
banking jurisdictions are about the same.				Caribbean get hit with hurricanes and storms
				of a great magnitude. This can cause their
Not true. One must see if the country has tax				internet and phones to go out for weeks at a
treaties with other countries. Tax treaties				time. I am most sure you would not be
are where the fishing expeditions come from.				enjoying the experience of waiting for a few
One must gain a knowledge of the offshore				weeks to see if your offshore bank is still
banking laws in the particular jurisdiction				alive and well after their phones and
being considered. Many has been offshore				internet get knocked out. The reason the
banking jurisdictions have changed their once				Panama Canal was built in Panama is because
favorable offshore banking laws since 9/11				Panama has no hurricanes, earthquakes,
and are basically doing business with people				volcanoes, tornadoes, tsunamis etc. Panama is
who do not take the time and trouble to check				tops when it comes to an offshore
the offshore banking laws for the country in				jurisdiction for offshore banking,
question. For instance Belize does not have				corporations and foundations.
any banking secrecy laws written in statues.
Switzerland has modified their laws to suit				Offshore Banking Myth #8 - The national
the EU. Many of the Caribbean island offshore				currency of the offshore bank is irrelevant.
banking jurisdictions have given in to EU and
American pressure and being afraid of losing				Not true.
their cruise ship business have changed their
bank secrecy laws for the worse.				Even if the offshore bank gives you an
				account in several currencies inquire about
Offshore Banking Jurisdictions additional				the conversion costs. Frequently every time
information by country is included at the				you convert a currency they move you first
links to the right.				into their national currency and then into
				the destination currency. At the end of the
Offshore Banking Myth #3 - No Offshore bank				day this type of offshore banking conversion
will ever reveal information about the bank				expense can be painful. Panama uses the US
accounts or banking clients.				dollar for it's national currency so this is
				the currency the banks operate on with some
The truth is offshore banks will reveal some				euro accounts available.
information in some cases. This varies from
case to case and country to country. Panama				For more information about Panama Bank
will cooperate in four categories of crimes:				Accounts click here:
terrorism, money laundering, narcotics
trafficking and child pornography. Countries				Offshore Banking Myth #9 - The US Dollar is
have what is called MLAT (Mutual Legal				not stable enough for use in Offshore
Defense Treaties) that call for the release				Banking.
of information under certain defined
circumstances. Most offshore countries have				Think again.
Tax Treaties that call for the release of
other information to other countries in the				What many do not realize is that a nice low
treaty. Panama has no tax treaties with other				currency on the international exchange helps
countries and is most unique in this respect				a country enabling it to sell exports. It
being the only offshore banking and				helps them with their balance of
incorporation jurisdiction without any tax				international payments. It encourages foreign
treaties. In Panama all tax offenses are				tourism and they bring in foreign currency by
considered civil offenses. As a general rule				converting to dollars. Do you really think
the MLAT treaties require that the crime				the EU could let the USA lower the value of
being investigated by the requesting country				their dollar further? Think about what it
must also be a crime in the country the				would do to the price of US imports in the EU
information is being requested from.				like cars for instance. It would make them
				cheaper. The EU would need to slap on
So offshore banks will under certain				punitive taxes and the USA would reciprocate
circumstances release information about the				in kind hurting their sales of cars in the
bank accounts they have. Again, one must				USA. There is a lot of fatalistic talk of the
select the right country not only the right				US dollar falling, true and it has fell but
offshore bank.				only to a level of comfort for exports.

To learn more about MLAT and Tax treaties				What about housing prices falling in the USA?
click here:				Well they were driven up by speculators and
				now comes the adjustment. A nice drop of 30%
Offshore Banking Myth #4 - Offshore Banks are				to 40% in housing prices will make the houses
regularly Licensed Banks.				somewhat more affordable. Can the US fix it's
				problems domestically? Probably much could be
No so.				done if they wanted to do something. They
				could create tax incentives for business, get
Most offshore banks hold an offshore banking				interest rates down lower and so forth. On
license from the jurisdiction they are in.				the broad horizon a steep drop in the housing
These licenses allow them to conduct full				prices makes things more affordable versus
banking activities, just not with any				constant speculation which would eventually
resident of the country they are located in.				drive the housing prices to the point where a
In some countries they are also prohibited				3 bedroom 2 bath 180 sq meter home would cost
from conducting business with any corporation				$1,000,000 in a small city and $6,000,000 in
or trust formed in that country as well. If				a major area. A country is better off with
this is going to scare you I do not know what				affordable housing where housing prices are
will. The offshore jurisdiction issues a				set by people wishing to live in the house
license to an offshore bank that does not let				because they like the area, the schools are
them bank with anyone in the country. Not too				desirable, the house is close to shopping,
reassuring huh. In Panama our law firm only				airports, hospitals etc. When housing prices
introduces clients to banks with full banking				are set by people thinking if I buy this
licenses that are allowed to do business with				house now I can sell it for a 27% profit in
the residents of the country, have branches,				two or three years, this is a mania that will
drive through tellers, etc.				end poorly. This is the end of this mania in
				the USA. They are adjusting not collapsing.
Offshore Banking Myth #5 - Offshore banks
that are part of a large international				There are still branch banks in rich
conglomerate will compromise your privacy.				neighborhoods of South Florida, Southern
				California, parts of New York city, etc where
Not so.				these branches of US banks have a branch
				office with in excess of $100,000,000,000
The general line of unfounded thought is that				(one hundred billion dollars) in deposits. I
if the international bank has a branch in the				mean the little neighborhood branch offices
USA or EU it can be compelled to reveal				have this much on deposit, of course the
banking records from the offshore country				whole bank is much larger. There are a lot of
where it also has a bank. If you are in an				people with many millions of dollars in the
offshore country like Panama this would be				USA and they tend to congregate near each
unlikely to happen. The bank in Panama is a				other in the same communities. We could also
separate corporate entity from the banks in				talk about all the stock, option future
other countries. The bank in Panama would				exchanges all working in dollars but then
have it's own Panama banking license and				this would go beyond the scope of the
would be bound by Panama banking secrecy				article.
laws. It would be a violation to give access
				So let's say you are scared of the US dollar
To employees located in another country not				and go into Euros and the dollar strengthens
bound by Panama bank secrecy laws. Of course				back to where it was and you lose 25% of your
some jurisdictions that used to be secure				value? The dollar is already down and it is
with their banking laws are no longer secure.				not likely that the other countries would
Again this is a matter of knowing your				want to see it go down further since they
jurisdiction and bank. At times clients of				would suffer in the long run competitively
our law firm ask us to get them a bank				from such a drop. We suggest that one need
account with a bank that does not have any				not be afraid to have an offshore banking
operations outside of Panama and this is of				account in US dollars but we also offer Euro
course a request we can readily accommodate.				accounts for those who need them.

Offshore Banking Myth #6 - Offshore banks				Offshore Myth #10 - It is illegal to own an
will create numbered bank accounts.				offshore bank account.

Not really.				Not so.

The offshore numbered bank account was a				We are not aware on any jurisdiction that
creation of Switzerland mostly and these came				makes it illegal to have an offshore bank
to an end in the 1980's. They originally were				account.
accounts requiring no identity documents and

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Offshore Banking Myths