Ecuador New Tax – Notice

Ecuador is soon going to a 2% tax on funds exiting the country. Now it is 1%. We feel this 2% is too much and are not encouraging people to use Ecuador under these circumstances. We are using Panama, Guatemala, Belize, Nevis and Saint Vincent.

Why Use Ecuador for Banking?

Ecuador’s Big Plus – Ecuador is not signing any OECD tax treaties and is not even giving lip service to the OECD. This means they have no intention on sharing any information regarding taxes at all and have made this public information. Your privacy will be protected in Ecuador better than in almost any other country. Ecuador has bank secrecy and anonymous bearer share corporations, Socieded Anonima or S.A. We have a law office in Ecuador to service our clients specifically for corporations and banking.

The Bank: The bank we use is located in Ecuador. We have a very close relationship with this bank. It is a 123-year-old bank, built in 1886. Ecuador’s national currency is the US dollar, and you can receive wires in either Dollars or Euros. The bank pays out up to 5% interest. In addition, there is online banking. The bank has 25 branches through Ecuador. It is a full commercial bank, not an offshore bank. Ecuador is not considered to be a tax haven yet they do not tax any offshore-derived income. Investments other than CD’s can be made through the bank with attractive yields.

Ecuador 1% Tax– When you take money out of the country of Ecuador there is a 1% tax to the government. Our clients tend to agree with us in thinking this extra 1% is a small price to pay in order to avoid any and all Tax Information Sharing Agreements and other hassles the police states have imposed on much of the banking world. Through investment income this tax can easily be recovered. Some clients think of the tax as an inexpensive insurance policy.

Is Ecuador Going to Get Blacklisted – Anything could happen but then they will also have to blacklist the Russian Federation, Venezuela, Bolivia, Brazil, Cuba, Saudi Arabia, Oman, Abu Dhabi, Qatar, Ukraine, Lithuania, Nigeria, North Korea, Iraq, Iran, Suriname. Ghana, Egypt, Jordan, Jamaica, Lebanon, Syria, North Korea, Yemen, Oman, Afghanistan, Pakistan, Romania, Bulgaria, Uzbekistan, Kazakhstan, Georgia, Azerbaijan, Turkmenistan, Peru, Paraguay, Thailand, Indonesia, Vietnam, and many African under developed nations who are all not signing the OECD treaties. I do not think they are going to blacklist Ecuador or any of the other countries in that there are too many and it would result in a blacklist against them. The high tax countries will sign the treaties and the countries they are close with or can bully around will also sign the tax treaties. We do feel Ecuador is probably the best choice of the countries that have declined signing any tax treaties. They are a democracy and have a stable government. The nation is rich in natural resources, has an Army and the people are quite content with political situation. The existing President Correa is a shoe in for re-election.

Ecuador Corporate Bank Account – What is done is an anonymous Ecuador Corporation, Sociedad Anonima or an S.A is formed. The names of the owners of this corporation do not appear in any public registry or database, thus they are anonymous. Ownership is vested in the hands of the ones who possess the share certificates for the corporation. The lawyer who is the registered agent in Ecuador retains one share of stock and you get the other 99 shares. We generally use 100 shares of stock. You also get a General Power of Attorney over the corporation which is a private document not recorded anywhere. The bank account is put in the name of the corporation. You are listed as the signatory and beneficiary owner of the bank account at the bank but this is protected by bank secrecy punishable under penalty of law criminally and civilly. When you send and receive a wire transfer only the corporate name appears in the wire instructions. The bank has online banking. You can bank in US dollars and can also receive Euros by wire transfer. The price of the corporations I Ecuador goes up according to the amount of money going through the corporate bank account. If you are going to run under $100,000 through the account per year then the total fee is going to be $5,000. If you are going to say run one million dollars through the account then we will strongly suggest you set things up using our Ecuador Trust Agreement Banking scenario, see below. The bank will issue secured Visa cards but they need to have a personal name on them. The limits for the Visa card can be up to $5,000,000 and $5,000 a day from ATM machines. We also have other anonymous Visa card options available:

Anonymous Visa Card Options

Account Opening - The Ecuador corporate bank account can be opened quite quickly if we use a shelf corporation. A shelf corporation is a never used corporation sitting on our shelf. The time frame for this is 7-10 days to have the bank account opened with a shelf corporation. You do not get to pick the name of the corporation is the downside with using a shelf corporation. If you form a corporation from start you can pick the name but it will take about 3 - 4 weeks to have the corporation formed and the bank account opened. The minimum deposit for the bank account in $5000. There is no maximum balance. The online banking comes after the account is opened and funded. The online banking takes about an additional week. The Visa card also comes after the funding of the account. There is a security deposit required of 130% of the credit line associated with this Ecuador Visa card. If you have a $10,000 credit line you need to have a security deposit of $13,000 at the bank in a segregated account bearing interest. The money stays into the security account for as long as one has the Visa card active, plus 30 days. The fee for the Ecuador Corporation and bank account is $5000 (low balance accounts). Fee is the same with a shelf corporation or forming a new corporation.

International Trust Agreement Ecuador Corporate Bank Accounts – This is a more secure method of banking where the bank does not know who you are. This method also allows you to run millions of dollars a year through the account with an extreme minimum of due diligence, questions and other harassments generally encountered. This is a smooth trouble free banking experience like the old days with the utmost of security as well. Deposits can be in the form of cash, checks, and wires. The law firm acts as the signatory and beneficial owner of the bank account in Ecuador. You still have the General Power of Attorney for the corporation, 99% of the share certificates and the online banking access codes. The big difference is the bank does not know who you are thus they cannot turn your name and identity documents over to any requesting entity. The process begins with an International Trust Agreement signed between you and the law firm. This is a private document not recorded anywhere. The relationship is as follows: you are the Trustor and the Law Firm is the Trustee, which holds assets for the Trustor. This protects you as well as the law firm. You can list beneficiaries, insert a distress clause and in many ways customize the International Trust Agreement. The International Trust Agreement differs from a conventional Trust significantly and one advantage is that venue is extremely difficult to establish with the International Trust Agreement.

Wire Trails - If you would like to protect your bank account from wire trails associated with your other bank accounts, you can wire the funds into our attorney client trust account. If somebody inquires why you sent the funds you can respond “Attorney Client Privilege”. We will move the funds into your corporate account within 24 hours. Such banking arrangements can be established not only in Ecuador but also in Guatemala, Costa Rica and Mexico as well. If the bank does not know who you are the protection reaches the level of the old Swiss Numbered Bank Accounts.

Trust Agreement Protection - The weak link in the chain of bank secrecy is the banks themselves. Banks are statutory animals that must follow the statues and if the government requests opening their records they cannot protest against this, they must just comply automatically. If the bank does not know who you are they cannot share this information. We do know and understand that Ecuador is in no such tax information sharing agreement but we are mentioning this not to be confusing but to explain what is taking place in the world.

Criminal Matters - Banks also can be compelled to share information under MLAT (Mutual Legal Assistance Treaties). These treaties concern themselves with real criminality (not taxes) like kidnapping, blackmail, narcotics, murder, gun running, etc. Ecuador has no MLAT with the USA, Canada or UK. Guatemala has no MLAT with any country. For a MLAT to apply the criminal violation must be illegal in both countries and this concept of law is referred to as dual criminality. There must be a criminal case on file in the national courts of the requesting country. The requesting country must show why they need the information to prosecute their case and why this is the only way to obtain such information. The police states use these MLAT’s on a daily basis. Generally the police states will expand a tax case to include fraud, conspiracy, money laundering and other assorted and sundry charges. This is not going to work in Ecuador.

Money Laundering in Ecuador – Ecuador has never ever successfully prosecuted a money laundering case. No one ever got prosecuted and convicted for this pseudo crime in Ecuador. Ecuador feels money laundering is against the laws of their constitution. No money laundering nonsense in Ecuador. Once again this justifies the 1% tax on money leaving the country.

Client Protection From Theft - Because of the ITA (International Trust Agreement) you have legal recourse against the lawyer and the law firm if anything were to happen to your money. The lawyer would go to jail. In the old days we would assist clients with opening bank accounts in the smaller Caribbean Island jurisdictions. They would say what if the bank steals my money? Today we hear the same thing regarding the law firm. If you stay with a bank in a high tax police state what do you do if the government or an unscrupulous law firm takes your money out of the bank which the courts are only too happy to let them do? It never seems to be perfect! With the online banking you can check your balances every day if you like, see the incoming and outgoing wires, etc.

Trust Agreement Distress Clause - Perhaps the best feature of an ITA is a Distress Clause. This is left open to you to decide what you deem to be distress—a divorce, bankruptcy, an information request, etc. You can also decide what the law firm should do in such a case. The funds can be temporarily removed from your control while the distress is ongoing. The jurisdiction the funds are kept in can also be changed when the distress starts. These distress clauses can be custom created.

Credit Cards: The bank issues its own credit cards from Visa. You must have the full amount of the desired credit limit plus 30% in the credit account. For example, if you would like a limit of $1,000 a day, you would need to have $1,300 deposited. The money is taken out of your main account and the security deposit will remain while you have the card plus 30 days. We also have anonymous Visa cards available that must be loaded by wire transfer that have no name on them that are issued by a bank in Mexico. The cards are delivered anywhere in the world by courier. If you are using the anonymous Trust Agreement Banking option the best approach is to have anonymous credit cards without your name on them and not tied to the bank account in any way.

Payment and Fees – The fee for an Ecuador Corporation and bank account is $5000. This is with you as the signatory on the bank account and is for a low limit corporation (max. $125,000 per year). The fee for an Ecuador corporate bank account using the International Trust Agreement with the law firm as the signatory on the bank account is $8000 and includes the International Trust Agreement and the corporation. If the law firm is the signer on the bank account there is an additional fee of 3% to 4% applied to the funds coming into the bank account one time only, not applied to outgoing funds but there is the 1% tax on money leaving the country additionally. Once again to avoid money-laundering charges from the country the bank is in and tax treaties this is a small price to pay. Payment for the startup fees can be by wire transfer or western union. After we receive required documents we will send you payment instructions.

Required Documents – A copy of a passport and driver license notarized or signed off on by an attorney. This can be as a scan attached to an email. Send to: staff@panamalegal.org

We do NOT require any bank reference letters, no lawyer reference letters and no utility bills. After we receive the documents we will send you the payment instructions. To stay anonymous we can accept Western Union but most use a bank wire, which is going to a law firm. If you are visiting us you can pay by cash.

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Secure Order Form

Questions: If you have any further questions please do not hesitate to contact us by email, phone, Skype, or encrypted chat. Thanks.