Obama Is In, Now What for the Offshore World?

Introduction – Obama is the President Elect of the USA. He is not yet the President. He has made threats regarding shutting down offshore banking, privacy etc. He can threaten all he wants; he has no power, authority or jurisdiction over any offshore jurisdiction. He does have power over American Residents and Citizens. So these people need to be wary.

Offshore Anonymous Corporations, Foundations, Trusts, and IBC’s – Obama wants to do away with any and all sorts of privacy regarding corporations, banking, trusts, foundations, stock brokerage accounts, IBC’s etc. Once again he has no control over foreign countries and their laws. This is a fairly typical posture of high tax, freedom-restricting jurisdictions. He will undoubtedly work with the other high tax countries to try to pressure the tax havens of the world to march to the beat of his drum, which will not be a pleasant sound. One key point here is called “Grandfathered In”. Obama cannot create retroactive laws. This would be unconstitutional in the USA. If you already have your offshore corporation, foundation, bank account, trust, stock brokerage account, IBC, etc. he cannot do too much to you. He may restrict USA residents and citizens from forming new offshore structures, banking, etc. with extra reporting, taxes, or asking permission with showing cause for the need for such an offshore structure or bank account. Rest assured asset protection will never be a valid reason.

What Happened in the BVI? – The BVI (British Virgin Islands) used to have true anonymous bearer share corporations. They stopped issuing new ones in 2002. The existing ones were allowed to continue operating for 10 years after which they will either cease or need to be converted to registered non-anonymous corporations. Yes, they were expensive in the early years after they were eliminated since there was no way to get any new ones formed. Now their price has dropped since they do not have much longer to run. This is a good indication as to what may happen in the future in some of the weaker jurisdictions that give in to the USA demands. The point here is do not wait to see what happens, now is the time to form your corporations, foundations, trusts, IBC’s now in 2008. You will be “Grandfathered In” and at any rate be better off than those wishing they had done it while they could.

What Happened to the Swiss Numbered Bank Accounts? – When the Swiss eliminated the completely anonymous numbered bank accounts they allowed the existing ones to operate for some years. First they restricted new deposits into these anonymous numbered accounts and then they gave them a deadline to supply ID some years later. The point is the people got some years out of it if they had the structure set up before they were regulated out of existence. Today the Anonymous Bearer Share Corporation is the best way to get anonymity since no one can look up the ownership of the corporation when they see wires moving around in the name of the corporation.

Offshore Banking – We said Obama would have control over USA residents and citizens not the offshore countries and their banks. He hates the offshore havens. They stand for all that he is against – privacy and no taxes. He could impose special taxes on money going from the USA to what he determines to be Offshore Tax and Privacy Havens. He could make USA citizens and residents file special reports as to why the money is being sent to these havens and then the IRS and Homeland Security can get involved. What to glean from this is to not only have your Offshore Corporation and Foundation set up in 2008 but also to also have your bank accounts set up and funded before 2008 comes to close. Move your money out now while it is lawful to do so. If you wait to see what Obama does and when he does it, you could be very sorry and miss a window of opportunity that will never present itself to you again.

Offshore Stock Brokerage Accounts – These too may come under some form of attack courtesy of the USA government. Get yours before any laws change.

Second Citizenship and Second Passports – This is going to come under attack too. The USA has been putting pressure on jurisdictions offering these second citizenships and passports for some time. There is currently no law requiring you to report any second citizenship to the USA. Some countries report such citizenships and others do not report such things. The countries we work with do not make any such reports. There is no requirement to ask permission for such a second citizenship before getting one. There is no law prohibiting you from getting such a citizenship or passport. There is currently no law prohibiting you from changing your name secretly when applying for a second passport or citizenship. This can change with Obama. These practices may no longer be allowed. The second citizenship and passport allows one to open offshore bank accounts anywhere in the world as a citizen of the second passport nation. This would mean you would not come up in any fishing expedition looking for citizens of some country who may be in violation of tax or reporting laws. If you are thinking of a second citizenship do it while you still can – do not delay.

Expatriating – Do not think they are going to let you pack up your wealth and just leave. The USA is one of the only countries in the world that has high taxes and gives not much of anything in return – no health care benefits and no realistic retirement stipends. They are also one of the only countries that taxes offshore-derived income. Maybe you want a better life, lower real estate costs, ability to have a live-in maid and a driver and live in a nice temperate climate without all the crime and police state negatives of the USA. They recently passed an expatriation tax in the USA for those renouncing their USA residency or Citizenship. To renounce a USA citizenship you are required to show a passport from a second country. It requires you to show several years tax returns and that probably leads to an audit. They then take all your assets including bank accounts, stocks, bonds, and pensions carried forward of course and pay them about 1/3 of that amount in excess of $600,000. This was a 2008 law signed and in effect. I as a wild guess would believe there is at least one person a year who just leaves with all their money without telling them. Just a speculative guess mind you. They have no setup to detect such behavior that we are aware of. This may not be the case in the future. So the point here is if you are thinking of leaving, do it now before the end of the year.

How Much Time Do I have? – We do not know. The new President takes office on Jan. 20, 2009. We think it would take him at least 30 days to get a bill passed and put on his desk for signature. Sometimes these bills take effect when signed, other times 30 or more days later. We are thinking this is going to go fast track to give the people little time to respond and probably go into effect on signing. They may not offer this for public comment and just do it fast and quiet, sometimes they just vote with a show of hands only.

Can the Borders Get Closed? – They already are! Ever see the military troops inside the USA near the Mexican border checking ID’s on people going to Mexico by car, foot or bus. They are there operating a military checkpoint inside the USA against the Posse Comitatus laws. There is a no fly list of some one million people, many of who are Americans with no criminal record that is used for international AND domestic flights. After Oct. 28, 2008 any flight crossing state lines inside the USA has its passenger manifest checked against the no fly list and requires the passenger to have a passport, passport card or one of the approved state driver licenses to fly across state lines. Forget about the right to free travel. Notice how fast Obama stopped talking about rescinding aspects of the Patriot Act now that he is elected? The USA has just about closed its borders. The last piece of the puzzle is making the people request an exit visa before they can leave. Of course the IRS will probably have to clear you to leave the country as well as the selective service system if Obama institutes his civil service corps. If you do not have a good enough reason to leave in their opinion they may deny the visa. If they think they would rather you do not go they will deny your visa. They can also then determine how long you can remain away from the USA.

2008 Shelf Corporations - Every year from January to April we get numerous requests for shelf corporations and foundations from the previous year. Of course we are all sold out by the second or third week of January. This year we will have the in abundance since we are stocking up but they will be sold at a premium so get yours before year end at the regular price.