http://www.panamalaw.org Today we see many different countries being touted as Offshore Havens. The only good offshore aspect of these so called havens is that they usually do not tax offshore derived income. In years past many of these jurisdictions were acceptable but in a post 9-11 world we see their protections have seriously eroded. Sadly many people form corporations and bank in these jurisdictions thinking they are protected when they are seriously exposed. en Mon, 11 Sep 2006 00:00:00 CST Mon, 11 Sep 2006 00:00:00 CST http://www.panamalaw.org/jurisdictions_to_avoid_svg.html http://www.panamalaw.org/jurisdictions_to_avoid_svg.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST This is another example of a good jurisdiction gone bad. Until 2002, SVG called for strict privacy under the Confidential Relationship Preservation (International Finance) Act, 1996, but this was repealed and replaced by the Exchange of Information Act in 2002. This new Act calls for the exchange or disclosure of information between local regulators and foreign regulatory/government officials. http://www.panamalaw.org/jurisdictions_to_avoid_isle_of_man.html http://www.panamalaw.org/jurisdictions_to_avoid_isle_of_man.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Another one of those jurisdictions that on the surface sounds good but isn't so good at all in practice. The Isle of Man Banking Act recognizes the contractual duty of a banker to keep the affairs of his customer confidential and the customers' entitlement to confidentiality. There are limited exceptions to these principles, set out in the Financial Supervision Act 1988, and these include circumstances where disclosure is required to assist criminal proceedings or to enable the FSC to discharge its statutory functions. So here you see the loophole, not good. http://www.panamalaw.org/jurisdictions_to_avoid_cayman.html http://www.panamalaw.org/jurisdictions_to_avoid_cayman.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Again another misleading jurisdiction. What the law says and what happens do not appear to line up in this jurisdiction. Under the Cayman Islands Banks and Trust Companies Law 1995 and in the Confidential Relationships (Preservation) Law 1995. Banking staff and government officials face civil and criminal sanctions if information is disclosed without authorization which on the surface sounds good BUT a number of laws permit the enforcement of foreign judgments or the disclosure of information in response to a court order, but normally in the context of criminal activity and drug use or dealing. http://www.panamalaw.org/jurisdictions_to_avoid_bvi.html http://www.panamalaw.org/jurisdictions_to_avoid_bvi.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST The BVI, like other British 'dependent territories', was forced to apply the EU's Savings Tax Directive from 1st July, 2005, and chose to apply a withholding tax (initially of 15%) to the returns on savings paid to nationals of EU Member States. The Directive does not apply to corporate entities. So now we have the BVI banks doing income tax reporting and withholding taxes. Does that make you feel good about this jurisdiction? http://www.panamalaw.org/jurisdictions_to_avoid_bermuda.html http://www.panamalaw.org/jurisdictions_to_avoid_bermuda.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Bermuda's has new tight anti-money laundering legislation that is called the Proceeds of Crime Amendment Act 2000, from 1 June, 2001, which applies to all banking and financial institutions. With the Act in place, fiscal offenses (think tax related) are now consistent with international anti-money laundering standards and all forms of tax evasion are now a criminal offense in Bermuda. Not good for privacy and open the door wide for fishing expeditions. http://www.panamalaw.org/jurisdictions_to_avoid_belize.html http://www.panamalaw.org/jurisdictions_to_avoid_belize.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Let us look at some of the laws this disappointing but often used jurisdiction has. But before we get there let us remember that the capital, Belize City has one paved street 3 or 4 blocks long. You are in the third world here with numerous internet, power and telephone outages. Belize often gets hit by hurricanes. The stability of the regime in Belize is questionable since they had a regime change in recent years and the new regime did not honor economic citizenships and passports of the previous regime. http://www.panamalaw.org/jurisdictions_to_avoid_barbados.html http://www.panamalaw.org/jurisdictions_to_avoid_barbados.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST This jurisdiction has a number of taxes that need to be overcome that right off the top make this a less than favorable jurisdiction. Why go offshore is taxation in the offshore jurisdiction is going to be a problem. Barbados has a number of Tax Treaties that turn us away from this jurisdiction right off the top. As of the year 2006, Barbados has 14 tax treaties in effect with the following countries: The Caribbean Common Market (CARICOM), the United States, Canada, United Kingdom, Finland, Norway, Malta, Sweden, Switzerland, Cuba, Venezuela, China, Mauritius and Botswana. Treaties with Austria and the Netherlands are expected to be added in soon. http://www.panamalaw.org/jurisdictions_to_avoid_bahamas.html http://www.panamalaw.org/jurisdictions_to_avoid_bahamas.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Bahamian banking secrecy is somewhat misleading in that that banking institutions are prohibited from divulging a clients or account holders information to a third party without the clear consent of the account holder (think Americans may have to sign waivers when opening an account) or under a Bahamian court order. The bad part is that banking institutions are freely permitted to divulge that a particular person or company does in fact have an account with that bank. While the bank cannot, according to Bahamian law, divulge specific details or account balances, they certainly can divulge who their account holders are. http://www.panamalaw.org/jurisdictions_to_avoid_anguilla.html http://www.panamalaw.org/jurisdictions_to_avoid_anguilla.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Anguilla is another jurisdiction with misleading bank secrecy. Commercial confidentiality is contained in the statues, BUT the government of Anguilla will co-operate fully with law enforcement agencies and regulators in other jurisdictions, think fishing expeditions and inquiries related to possible income tax violations. http://www.panamalaw.org/jurisdictions_to_avoid_dubai.html http://www.panamalaw.org/jurisdictions_to_avoid_dubai.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST This is an interesting jurisdiction. In Dubai there are no taxes of any sort one has to contend with, so there is no tax filing and no tax audits, etc. Most offshore jurisdictions have no taxes pertaining to offshore derived income but do tax onshore derived income like if you owned a restaurant in the jurisdiction. Panama is loose in that if you had no onshore income you do not have any tax returns to even file. Dubai has no tax collection organization period. BUT Dubai is in tax treaties which is generally a big negative since it opens the door to fishing expeditions. http://www.panamalaw.org/jurisdictions_to_avoid_hong_kong.html http://www.panamalaw.org/jurisdictions_to_avoid_hong_kong.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST This is a jurisdiction that may have a few small features regarding taxation but when it comes to privacy it is most deficient. One disadvantage of Hong Kong companies is that annual financial statements must be prepared, audited and presented to the Government to prove that the company did no business in Hong Kong and therefore owes no taxes. Such statements must be presented within 18 months of the date of incorporation. This is our opinion is grounds for finding a friendlier jurisdiction. http://www.panamalaw.org/jurisdictions_to_avoid_luxembourg.html http://www.panamalaw.org/jurisdictions_to_avoid_luxembourg.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Luxembourg being an EU company has had to make some concessions over recent years regarding bank secrecy. They of course have had to implement the know your customer rules as every bank has had to do. Luxembourg has a 30% corporate tax rate. Most of you should move on right at this point. Luxembourg has entered into double taxation treaties with 22 nations. This is a negative. We like to see a complete absence of tax treaties which is the case with Panama. Tax treaties are a warning sign for fishing expeditions, wholesale or limited. http://www.panamalaw.org/jurisdictions_to_avoid_nevis.html http://www.panamalaw.org/jurisdictions_to_avoid_nevis.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Actually Nevis is better than most jurisdictions but still falls short when compared to Panama. Nevis has double-taxation agreements with Denmark, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. This is always a warning sign of a possible fishing expedition. Panama has no tax treaties with any country. Nevis has Bearer share Companies BUT bearer shares have to be deposited with the Registered Agent and reported to the Registrar of Companies. This eliminates the anonymity. The shares can't be transferred without any reportage or recording of new owners like in Panama. Panama has no registry or mechanism to track ownership of bearer share corporations. So why use Nevis? http://www.panamalaw.org/jurisdictions_to_avoid_singapore.html http://www.panamalaw.org/jurisdictions_to_avoid_singapore.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST This is another heavily used jurisdiction suffering from eroded privacy. The first problem we run into with Singapore is taxation. Offshore derived profits are thought to be non-taxable in Singapore BUT: In accordance with Goods and Sales Tax (GST) Law, a Singapore Company is obliged to register for GST if annual sales exceed or are expected to exceed S$1 million (US$614,000) in any calendar year. This is not a good thing because it can lead to audits, disclosures, etc. In accordance with Section 145 (1) of the Singapore Companies Act 1963, a Singapore Company shall have at least one director who is ordinarily resident in Singapore. This is another bothersome ordinance. http://www.panamalaw.org/jurisdictions_to_avoid_switzerland.html http://www.panamalaw.org/jurisdictions_to_avoid_switzerland.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST Swiss banking secrecy is in no way absolute. It is lifted immediately if a Swiss judge or prosecutor issues a lifting order in the course of a domestic or international criminal investigation. This includes foreign criminal investigations of terrorist financing, money laundering, insider trading, and tax fraud. http://www.panamalaw.org/jurisdictions_to_avoid_uruguay.html http://www.panamalaw.org/jurisdictions_to_avoid_uruguay.html panamalegal@hush.com Mon, 11 Sep 2006 00:00:00 CST While Uruguay has bearer share corporations allowing for anonymous ownership they require taxes to be paid through the filing of an audited tax return which goes into a public registry for all the world to see. http://www.panamalaw.org/jurisdictions_to_avoid_andorra.html http://www.panamalaw.org/jurisdictions_to_avoid_andorra.html panamalegal@hush.com Fri, 15 Dec 2006 00:00:00 CST Andorra has in some circles been thought to be a reasonable offshore tax haven and privacy jurisdiction for offshore incorporation and offshore banking. We'll take a look at Andorra and explain why it is a has been offshore jurisdiction. http://www.panamalaw.org/jurisdictions_to_avoid_antigua.html http://www.panamalaw.org/jurisdictions_to_avoid_antigua.html panamalegal@hush.com Sat, 16 Dec 2006 00:00:00 CST Antigua is a name that often comes up when there is a discussion of offshore tax haven jurisdictions. Antigua is no longer the tax haven privacy jurisdiction that it once was. http://www.panamalaw.org/jurisdictions_to_avoid_turks_and_caicos.html http://www.panamalaw.org/jurisdictions_to_avoid_turks_and_caicos.html panamalegal@hush.com Sun, 17 Dec 2006 00:00:00 CST The Turks and Caicos is an offshore tax haven used by some not being very popular. This is not a really bad jurisdiction but has some serious deficiencies and one could do better.