It was once joked about you could put your money into a Swiss bank account and keep prying eyes out of your business. You can still put your wealth into a Swiss bank account, but new policies and regulations make your assets far less secret than they once would have been.
In recent years, more and more policies have been generated to ensure that home countries can get their share of the taxes on offshore investments. These policies are also in place to reduce money laundering, bringing up another point: offshore banking has received a negative reputation. The truth is that offshore banking is still legal and can be a pivotal part of any wealth management strategy.
If you are looking for privacy and secrecy in the era of transparency, however, you might be wondering if it is still possible.
Can Offshore Banking Secrecy Still Work?
The answer is not as straightforward as you might think. In some cases, offshore banking secrecy will not work where it once did. The key is to get creative and look for loopholes.
There are a few ways you can still get offshore banking secrecy. It all starts with doing your due diligence and finding offshore jurisdictions that will still grant the secrecy you are looking for. If a jurisdiction complies with AEOI, FATCA, or CRS, then you can bet that your assets are going to be reported to stay in compliance. If you can find a jurisdiction that is not taking part in these regulations, however, you could be on to something.
One of the best ways to fully take advantage of offshore banking secrecy is to renounce your taxpayer status and citizenship. Then, you are free to become a citizen of a country that is going to honor your desire for banking secrecy.
It is important to find a new home country that’s going to give you the biggest benefits. For instance, Georgia offers a wealth of benefits. Their country does not tax foreign earned income, and they do not participate in CRS. This is a great example of one offshore jurisdiction where you can get the height of secrecy.
What to Look for in an Offshore Banking Jurisdiction
When you are looking for an offshore banking jurisdiction where your secrecy will be valued, then you must also look at a list of other factors. For instance, you will want to take a close look at the jurisdiction’s stability.
Economic and governmental stability means that you can rest assured your investments are safe and secure while also being kept secret. As stated before, you will want to find a jurisdiction where regulations and policies such as AEOI, CRS, and FATCA are not accounted for. This will ensure the height of privacy for your accounts and assets.
Some offshore hubs, such as Puerto Rico, are among the most sought after by investors all around the world. Other offshore banking jurisdictions, such as Germany and Austria, are sought after because privacy is simply a part of their culture. When you bank in a jurisdiction such as one of these, your assets will be handled with the utmost confidentiality because that is the usual routine for them.
It’s entirely possible to still find banking secrecy in the era of transparency, but you do have to do a bit of research to find the right jurisdiction.
Should You Hide Assets Offshore?
The media has painted a poor picture for offshore banking, but the truth is that as long as you are following all laws, rules, and regulations, then you have nothing to worry about. The vast majority of offshore banking investors are simply looking for favorable tax incentives and privacy.
While it is getting more and more difficult to find truly secret offshore banking jurisdictions, it can still be done. Despite encroaching policies such as CRS, you can still find ways around the ever-imposing laws and regulations. For instance, you can easily create a shell company and appoint shareholders to split the ownership. This would make the account unreportable. These strategies are excellent loopholes that are perfectly legal.
When it comes to hiding assets offshore, as long as you are in a jurisdiction that will let you, then you really only stand to gain.
Is the Era of Transparency Only Beginning?
As part of any wealth management strategy, it is important to always do your due diligence and stay abreast of the latest changes. If you are investing offshore, be sure to always stay current on new policies and regulations as tax authorities look for ways to impose taxes on assets stowed internationally.
If you want to learn more about the available options, you can consult with us.
AUG
2020
Table of Contents