Debunking 12 Offshore Banking Myths

Offshore banking is predominately for spies and criminals -- This is misinformation spread by those who don't want you to take your money out of there control. Today, with the MLAT treaty in place, criminals and spies can't make much use of offshore bank accounts. Today most of the offshore money is actually deposited by fortune 500 companies protecting their assets and planning their operations for maximum tax benefit.

Banking offshore is just too much trouble for the average guy -- If you tried to setup your offshore banking structure yourself without the aid of an offshore professional this would certainly be true. Today, however, an offshore bank account owned by an offshore company is commonly done and only takes about 5 days. Since governments around the world have been moving to tax individuals on their world wide income, an offshore bank account is usually setup with a bearer share corporation and/or a foundation.

Only a rich person can afford an offshore asset protection setup -- This is totally false. The basic package, which is adequate for 90% of clients, costs less than $2000 US. The basic package includes an offshore bank account and a Panama bearer share corporation. It has proven time and again to be a very solid protection mechanism for our clients and is very useful for tax planning as well.

9/11 has weakened bank secrecy -- This is certainly true onshore! Even though pretty much all the offshore countries are now in the MLAT treaty, this has not weakened bank secrecy unless the matter is criminal in nature. Even at that the issue must a crime in both countries. In Panama, for example, tax evasion is not a crime. As such a MLAT request for information based on a tax evasion case would be flatly denied by the Panama government.

You must visit the offshore jurisdiction to open a bank account -- This is the case with some Swiss banks. Without an introduction in some offshore jurisdictions you can't get a bank account. Many banks in Panama work in this way. Fortunately, your offshore professional can provide the introduction necessary. Most clients don't even realize this is taking place in the background. They simply place their order and in a matter of a week or so they have an offshore corporation and bank account.

Offshore banking has been destroyed by the MLAT treaty -- If you are engaging in serious criminal activity this statement is true. For most people just trying to protect their assets this statement is totally false. In fact, countries like Panama, only comply in serious criminal cases, and deny many requests. The requesting country has to show that they already have strong evidence that a crime has taken place AND the activity in question has to be a crime in Panama too. So tax evasion, for example, is not a crime in Panama and so Panama would not entertain MLAT requests for information relating to tax evasion.

All the countries share tax information now. -- Many tax treaties have been put in place but offshore countries like Panama do NOT have a tax treaty with anyone. In fact they have bank secrecy laws on their books to prevent this kind of information sharing.

The authorities will know if I use an offshore bank account -- That is simply not true. E-commerce and banking all over the internet today rely on secure online encrypted communications. The largest banks in the world use it and it is completely secure. It is impossible for anyone to see what you are doing. Companies like findnot.com can add a second layer of security for those who feel they need it.

Offshore banking won't protect me in a lawsuit because the court will order that I bring the funds back. -- If you setup your asset protection plan before you get sued you are well protected. Once you donate your money to an offshore foundation, for example, they money is not legally yours to get back. The judge cannot order anything illegal. If legal proceedings are already under way and you move the funds you might be charged with fraudulent conveyance. There are ways to avoid this, but it is beyond the scope of this article.

If I move money offshore, someone will be able to track down where it went -- If you were to wire the money to its final destination directly that would be true. Clients concerned with this usually move the money to a intermediary bank in another offshore banking haven. For example, they will wire the money to an bank in the Cayman Islands, and then rewire the funds to Panama. Someone coming after the money would have to break the Cayman Island's bank secrey to find out the money is now in Panama. This is not likely to happen and you would likely have plenty of time to move the money to a third or fourth jurisdiction. Because authorities know that, tracing money is only done is high profile cases.

Offshore bank accounts can be used to do all the same activities as an onshore account -- This is almost true. The only exception is online bill payment. This popular feature doesn't make sense offshore and to my knowledge no offshore banks offer it. Typically, the money held offshore is not used onshore anyway. Having said that, most offshore banking clients have a bank card that allows them to withdraw funds anywhere in the world. The card only leads back to the corporation which owns the bank account (and would require breaking bank secrecy even to find that out). The corporation is usually a bearer share corporation which means that it's ownership is anonymous anyway.

Operating an offshore bank account is illegal -- Operating an offshore bank account is 100% legal and many fortune 500 companies do it everyday. In fact much of the money kept offshore is deposited by these companies to protect large sums of money from lawsuits. Most people don't realize that most major corporations are actually comprised of 50-100 smaller corporations. Many of these corporations in offshore banking havens, offering asset protection and tax advantages.

Article Source: http://www.myaddirectory.com

If you have property or have assets that you don't want to be taken by an angry spouse or a lawsuit be sure to read more of Doug Snarder's work on the Offshore Banking Account and Offshore Asset Protection.

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