Perhaps one of the biggest perks of leveraging offshore banking is the anonymity it has long offered. Due to changing and tightening regulations, however, offshore banking isn’t as secretive as it once was. In fact, with the implementation of policies such as AeOI and CRS, many offshore banking jurisdictions are now reporting the once-anonymous information from their clients to their home countries.
Organizations and experts have led individuals to believe that some of the most secretive offshore banking jurisdictions are places such as Switzerland, the Caribbean Islands, and Hong Kong. While this is somewhat true, there is one offshore jurisdiction that goes widely unrecognized - what is it?
Hint: It is More Secretive than Switzerland!
The answer is: the United States. The U.S. is among the best offshore jurisdictions around the world, ranking just above Switzerland at #2 in the 2020 Financial Secrecy Index.
The Financial Secrecy Index is published by the Tax Justice Network and has been published yearly since its launch in 2000. The Financial Secrecy Index ranks offshore jurisdictions according to their levels of secrecy as a scale of their offshore financial activities. This year, the top 5 contenders were listed as the Cayman Islands, the United States, Switzerland, Hong Kong, and Singapore. According to the Tax Justice Network, up to $32 trillion in private wealth could be sitting in secrecy jurisdictions.
Now, these secrecy jurisdictions are getting harder and harder to come by. Some of them aren’t reputable, drawing a focus on tax evasion and money laundering. If you are interested in finding a secretive offshore jurisdiction that will protect your identity while also being a reputable center for placing your assets, then the United States is a great option.
Why The US is Better than Switzerland
If you are a citizen of the United States, then you know how hard it is to have any wealth that the government can’t see. The United States has a tough tax code and works to tax basically anything that its residents earn. If you don’t live in the United States, however, you can stash your wealth there without fear of disclosure. The United States isn’t a part of AeOI or CRS, so you can rest assured that your wealth there won’t be reported - as long as you are not a citizen of the U.S. The United States doesn’t have reciprocal agreements with other countries, making it simple to put your wealth there if you are a resident of another country.
As it stands, there is approximately $800 billion in offshore wealth stashed in the United States. That number could be much higher, but since offshore banking is carried out with such a level of anonymity, it’s hard to tell.
Not only does the United States hold promise for international high wealth individuals and companies looking for anonymity, but it also offers a list of other benefits. For instance, since the economy is fairly stable and the banking system is solid, people using the United States as an offshore hub can rest assured that their wealth is in a stable banking system. In addition, people and companies choosing the United States as an offshore jurisdiction can benefit from various tax benefits. For instance, states such as New York, Montana, South Dakota, Delaware, and Wyoming offer no taxation for individuals and companies alike. In South Dakota alone, trusts held $224 billion in offshore assets in 2014. When you choose to use the United States as an offshore jurisdiction, you are also tapping into many jurisdictions - each state offers various benefits.
It’s also very easy to set up a shell company in the United States, which can provide a wealth of tax shelter and privacy benefits for anyone looking for corporate benefits.
The United States is the last big country that’s not complying with AEoI. While the country demands that their citizens report anything they do offshore or domestically in terms of finances, any non-U.S. citizen can use the United States as an offshore hub without worry of reporting. As long as you don’t live in the United States, the United States is your best bet for an offshore jurisdiction.
If you are in the United States, states such as Delaware can offer major benefits if you are registering a corporation. In 2014, more than 1 million live legal entities had been incorporated in Delaware. In Delaware, companies aren’t taxed, and neither is their royalty income. Other states with similar benefits include Oregon, Wyoming, and Nevada.
To Conclude...
If you are looking for a secretive offshore jurisdiction, the United States offers anonymity while also offering the strength you want when you’re investing in an offshore jurisdiction. Whether you are an individual or a corporation, the United States offers a wealth of advantages for you.
If you want to learn more about the USA as an offshore jurisdiction, you can consult with us for free.
JUL
2020
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