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12 Offshore Banking Myths Busted

Article Summary: 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.

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.

Its not worth going offshore unless you are wealthy -- Since it costs less than $2000 USD for an offshore bank account and a bearer share corporation with all the trimmings, offshore banking is within most people's reach. It is a very strong vehicle to protect your assets from lawsuits. Every business owner should have an offshore bank account and offshore company. In today's lawsuit happy world this is just good business practice.

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.

To open an offshore bank account you need to visit the country in question -- This is a falsehood. We open bank accounts regularly for our clients without ever seeing them. Everything is done by fedex, phone and fax.

The MLAT treaty has ruined the effectiveness of offshore jurisdictions -- This is true for any major criminals. Requests made through the MLAT treaty must be a crime in both countries (Tax evasion is not a crime in Panama for example.) The requesting country must show that it has strong evidence and is not on a fishing expedition. There is a great deal of flexibility in the treaty. The requesting country cannot force co-operation. If a country like Panama doesn't think the case has merit, they can keep asking for more documentation, or simply deny the request. Panama, for example, doesn't like co-operating on minor crimes.

Tax information is shared between most countries now -- It is true that many countries have entered into tax treaties, but other more reputable offshore jurisdictions have not. Panama, for example, has no tax treaties with anyone.

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 doesn't protect me from a lawsuit because the judge will just order me to bring the money back. -- If you were to open a personal bank account offshore this would be true. However, an offshore bank account is typically owned by a bearer share corporation and or a foundation. In the example of a foundation, if you donated money to the foundation you cannot get the money back. The foundation can only give money to the purposes set in its governing documents. That does not include giving money to you. Basically the money is out of your control legally speaking and so you can't bring the money back.

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.

I can use my offshore bank account to do everything I currently do with my onshore account. -- There is one thing you can't do with an offshore bank account. You can't pay bills online. This is the only feature lacking from most offshore accounts. This is easily rectified by an good offshore asset protection plan by making a portion of the money available in your onshore account. This also brings up another feature that deserves mentioning. Most offshore bank accounts come with a cash card that can be used to withdraw funds anywhere in the world. The card only traces to the corporation which is often a bearer share corporation (meaning the ownership of it is anonymous)

It is illegal to use an offshore bank account -- There is no doubt that you could use an offshore bank account to do something illegal, but opening up an offshore company and bank account is 100% legal. In fact many fortune 500 companies keep much of their assets safe in offshore countries.

Article Source: http://www.upublish.info

About the Author:
Doug Snarder
If you have property or have assets that you don't want to be taken by an ex-spouse or a lawsuit consider reading more of Doug Snarder's work on the Offshore Banking Account and Offshore Asset Protection