Can A Simple "Offshore" Company Help Make You Wealthy?

And Frequently Asked Offshore Banking and Investment Questions

There has been a lot of talk recently about the benefits of "Offshore" companies, trusts and investments for the small business owner and investor. Some of this information is correct, a lot of it is incorrect. One of the major myths is that is expensive and not viable for the average person and this is simply not true. If you are an investor and you have invested money into the stock market, an offshore company could turn out to be very profitable for you. You may ask, why? Well, there are a number of reasons. The first is, if you structure the offshore company correctly (this is vitally important) you can gain substantial tax benefits. Secondly, you can access investments that as an "Australian" you are not otherwise able to invest in. An offshore company being non-Australian suffers none of the restrictions and can freely invest in these investments that can yield from 25%pa to several 100%pa. The problem exists in government regulation regarding foreign prospectuses being sent to Australians, however they can be sent to "foreign" companies. The third reason for establishing an offshore company is asset protection from litigants and others that would threaten to take your assets from you. The last, but certainly not the least reason is privacy and confidentiality of an offshore company. Nobody can find out what you are doing with your money regardless of who is trying to find out due to the secrecy laws in place with many of the countries that host "offshore" companies. I may have caught your attention with the bit about investments yielding 25% to 100%, & .a little sceptical? Well, in my books, High Yield Investments and High Yield Investments 2, I have detailed comprehensively nearly 140 of the best and highest yielding investments in the world. Some require you to have an offshore company, some don't. There is an order form in this magazine.

These Frequently Asked Offshore Banking and Investment Questions may help you decide and realise that there are substantial benefits in using offshore financial structures to protect your assets, provide confidentiality or provide you with fabulous tax minimised investment opportunities.

Q.What does offshore investing mean?

A. Offshore, at least with respect to the financial world generally, means a jurisdiction other than where the investor lives. The foreign countries most favoured for investment purposes have laws, which give distinct advantages to the investor or business person. These laws may take the form of local no-tax or low-tax liability on all investment income regardless of the residence of the investor (Bahamas, Cayman Islands, Turks & Caicos Islands), local tax exemptions for non-residents of that jurisdiction (Channel Islands, Gibraltar, Belize, Luxembourg, Vanuatu) tax holidays for certain types of local investment (Portugal, Netherlands Antilles, Ireland, Jamaica) favourable tax treatment through treaties and agreements with the investor's home country.

Q. Do I have to travel overseas to invest offshore?

A. No. Offshore investing does not mean that you have to live overseas, sell your local investments, or even visit your foreign bank accounts, corporations or other offshore facilities. Offshore investing can be done from your own home using email facilities on your home or business computer. Also, using public telephones (Use phone cards for convenience and privacy) or faxes at the local post office. Why not use the home phone or fax I hear you ask? If you use your home phone or fax you have just given anybody who wants to know, an idea of what you're up to, and a permanent record and paper trail to your bank, adviser etc. For those less urgent requests, the mail is fine, and untraceable.

Q. What are the main reasons for having my wealth placed offshore?

A. They are:

1.Asset Protection-

To secure against future claims such as bankruptcy, judgment creditors and other litigants, etc.

2.Estate Planning-

Family and Protective Trusts (possibly as an alternative to a Will) for accumulation of investment income and long-term benefits for beneficiaries on a favourable tax basis.

3.Confidentiality-

From competitors, adverse claimants and other parties from whom you wish to keep your business or personal interests private.

4.International Tax Planning-

Advantageous use of foreign jurisdictions and their tax rules for reduction of tax liability.

Q. Is it legal for me to have offshore investments, companies, and bank accounts?

A. Absolutely. Because every western nation encourages international trade and enterprise, there are usually no restrictions on residents doing business or having bank accounts in other countries. Reporting requirements on such accounts however, differ from country to country. Australian reporting requirements can be intrusive and to a large extent these heavy handed rules depend solely on the honesty of the investor in question, such is the secrecy provided by these offshore centres. Offshore investment vehicles are routinely and legally used by sophisticated and reputable high-net-worth individuals and corporations worldwide.

Q. What are the Banks like offshore?

A. They are every bit as good as local banks. Banks such as Barclays, Lloyds and Citibank operate in most offshore financial havens.

Q. Is it convenient to use offshore banks?

A. Yes. These days with email, faxing and telephone facilities and the use of ATMs, your money is just as accessible as it is in Australia. Only withdrawals of large amounts of cash will take a little longer.

Q. What about income tax on income I've earned offshore?

A. Australia, New Zealand and most other high-tax countries require residents to declare their income on a worldwide basis. No matter where you earn it, tax is payable when income accrues to you, or in certain circumstances, when it accrues to an entity which you control. That is why most countries impose no restriction on where one's business interests, investments or bank accounts can be located.

Q. If I have to pay taxes, what is the advantage of investing offshore?

A. There are many other legitimate reasons to invest offshore which do not relate to taxes. But there are some little known tax loopholes that can be exploited legally. However, there are other important reasons to consider going offshore as well, including asset protection, estate planning, confidentiality, better investment yields and taking advantage of active business interests overseas.

Q. I want to keep my affairs confidential for reasons other than tax minimisation. Is confidentiality and privacy guaranteed?

A. With the right choices, your privacy can be absolutely guaranteed. Except in the event of proven criminal activity (excluding so-called "fiscal offences" such as tax evasion or other money collection disputes. Australia is one of the only countries that has criminalised tax avoidance or evasion. Tax haven jurisdictions never respond to information requests made on the basis of Australian tax evasion, but keep in mind it is your responsibility to obey our tax laws), most offshore governments uphold strict confidentiality laws for banks, corporate registries, and trust companies. These laws protect offshore investors from third parties, including both private and governmental authorities.

Q. What's the minimum amount I have to place offshore to make it worth my while?

A. There is no minimum amount required. However, most people will weigh the one time set-up costs (usually $ 1,500 to $ 10,000 and annual fees charged by the jurisdictions for things like registration fees etc.) and determine if it's worthwhile to invest offshore.  In my opinion you should be looking at an investment of at least $ 10,000 or have an offshore income stream that can easily be diverted into an offshore structure.

Q. Do I need a company or trust set up?

A. No, not immediately anyway. Most people establish offshore trusts and companies prior to opening bank accounts so they can use the company name to provide extra secrecy. Quite often the beneficial owner or shareholder of a trust or company can be kept confidential or even unknown in the case of bearer shares or non-existent trust beneficiaries. Obviously, the cost of these structures range from around $ 1,500 up depending on the jurisdiction you choose and the complexity of the structure you propose.

Q. Where should I establish my offshore setup?

A. There are many good havens including the Caymans, Isle of Man, Nevis, Liechtenstein, Luxembourg, Gibraltar, Ireland, British Virgin Is. The list goes on.

Q. Are secrecy laws legislated and guaranteed in these places?

A. In most cases, Yes.

Q. Will tax havens always be available?

A. Yes, since World War 2 they have proliferated and are now recognised as an essential part of international business. In fact more and more tax havens are appearing all the time.

Q. Can governments like the British close them down if they wanted to?

A. Yes, but they would never do so because they are all cash positive to countries like Britain and to close them down would simply ensure the money would leaves and goes somewhere else.

Q. With most of these offshore banks, can I get a Debit or Credit Card?

A. Yes

Q. Do these banks have facilities like funds management and other investments opportunities?

A. Yes

Q. What is the minimum deposit required to open an offshore account?

A. Most banks require approx. $ 1,000.

Q.  Can I invest into Australia from my offshore structure?

A. Yes.

If you would like to know exactly how to set yourself up offshore, The Invisible World and Invisible Banking can answer all your questions and assist you to establish a banking or corporate structure simply and at the lowest possible price. The books have been written in a simple, understandable way without the use of complicated jargon.

For more information on this subject, we suggest the following Trident Press titles:

The Invisible World

Invisible Banking

Complete Offshore Strategy Special