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Five Steps to Take Before Moving Your Money Offshore
Since The Sovereign Society was founded 15 years ago, we have been advising our members that opening an offshore bank account is the basic first step to take in “going offshore” financially.
But if President Obama’s campaign ads are to be believed, an offshore bank account is part of some dark, sinister plot worthy of attack. Because Republican presidential candidate Mitt Romney has several offshore accounts, an Obama campaign video demands: “Americans want to know why a presidential candidate puts his money in offshore accounts.”
The answer is that Romney, like any smart businessperson, knows that bank accounts in offshore financial centers (places formerly called “tax havens”) allow useful and profitable offshore financial activities.
Opening an offshore bank account can give you opportunities to protect and grow your wealth in ways you can’t here at home, but it is not something that should be done in haste. By taking a few simple steps ahead of time, you can make sure that your money’s new home will meet all of your future needs.
Finding What America Can No Longer Offer
Contrary to what some politicians may say, an offshore bank account is not a tool to evade taxes. The U.S. Internal Revenue Code taxes American citizens and resident “green card” holders on all their worldwide income. No matter where or how you earn your money, you may owe some U.S. taxes and must annually file at least a Form 1040 with the IRS, and possibly other forms reporting income and related taxes.
The benefits an offshore bank account can offer, however, are numerous. One of the first is protection against the declining dollar. Through currency diversification, an offshore bank account allows you to convert declining dollars into stronger currencies.
Since the creation of the Federal Reserve in 1913, the value of the U.S. currency has collapsed. What was worth $1 back then is worth less than 4.8 cents today. That is to say, our dollar has devalued by more than 95%.
This trend continues almost daily, and that means that having an offshore account is becoming a matter of acute urgency.
In troubled times, an offshore bank account can also provide a much needed safe haven for your money.
Hundreds of thousands of sovereign individuals around the world use offshore bank accounts for exactly that. Smart people, whether savvy Argentines or Russians, use this simple, yet effective, method to protect their cash from meddling governments and stifling regulations. Now Americans are finally catching on.
The International Monetary Fund (IMF) confirms that “stability reasons” — and not bank secrecy — helped foreign havens such as Switzerland attract 27% (of an estimated $21 to $32 trillion) of the world’s offshore wealth in 2011.
Offshore accounts also offer what American banks can no longer guarantee – much stronger asset protection and greatly increased banking privacy.
But to access all these potential benefits, you need to make sure you choose the right financial institution to open your account in…
Choosing the Right Home for Your Money
I would suggest taking the following steps to help you choose the right bank, assuming your country of choice has a stable government, low or no taxes and welcomes foreign investment.
Step #1: Carefully research established financial institutions in your country of choice. Gauge national banking standards to get a frame of reference against which you can judge individual banks and services offered.
Step #2: Check Google News and in-country newspapers and publications for mentions about a specific bank, good or bad. Google will guide you to the website of the country’s official bank supervisory agency with facts about each bank, its license, its current standing and any prior complaints or official actions.
Step #3: Beware of “banks” that have only an Internet presence. Most countries have outlawed “brass plate” banks that are nothing more than a name on a building or a lawyer’s office door. A website without bank officials’ names, a physical address and working phone numbers are indications of fraud.
Step #4: Be wary of any banks that offer unreasonably high interest rates or returns. If an offered deal appears too good to be true, it is just that.
Step #5: Confirm that an offshore private bank meets or exceeds the minimum standards set by the international Basel Accords. These rules limit a bank’s risk and require minimum capital, shareholder equity and disclosed reserves, as well as limiting holdings in debt and equity instruments.
One other important and relatively new consideration is an offshore bank’s status with the U.S. Securities and Exchange Commission (SEC) compliance and registration.
In the UBS Swiss tax evasion bank scandal that began in 2008, the U.S. Internal Revenue Service played the major role in prosecuting U.S. account holders who evaded taxes. This got most of the news media coverage. But UBS was fined $200 million for failure to register with the SEC.
As a result, a growing number of offshore banks have established special, separate SEC-qualified investment banking units for American clients only. Some independent offshore investment advisers also are now SEC-registered, allowing them to advise American clients. As part of your due diligence, check to see if the offshore bank you are considering is SEC-registered.
Whether it’s in Switzerland or Liechtenstein, Hong Kong or Singapore, an offshore account serves you as a simple, yet effective tool to protect your wealth against both intrusive government and its inflated currency. But before you take your first steps offshore, always make sure to do your due diligence. Doing so will make sure that you get the most out of what offshore has to offer.
There is nothing sinister about an offshore bank account. The real question is: why don’t you have one?
Faithfully yours,
Bob Bauman
P.S. Though there are many options out there, finding a new home for your money offshore does not have to be a scary proposition. For my Offshore Confidential subscribers, I am constantly finding safe, quick and legal ways to help build a better future for their wealth abroad. To find out how you can become a member and start taking the first steps toward going offshore, click here to learn more.
2012-09-28 21:58:07
Source: http://sovereign-investor.com/2012/09/28/how-to-find-the-right-safe-haven/
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