Top 5 Offshore Jurisdictions Offering (Much) More than Just Tax Cuts
The economy and politic climate aren’t getting any better.
The global economy is getting closer to meltdown; some experts are even indicating that economy crash is already past-due. The suspicious drop of precious metal value, the astronomic growth of derivatives, the mind-boggling oil price, etc. — all contribute to the case of economic war that’s taken place right now.
Political-wise, things aren’t any better. The rising temperature of global conflicts is quite worrying: The U.S., Russia, Korea, and China are getting tangled in a complex situation; the Middle East? No comment; similar things happen in another part of the world: Conflicts, conflicts, and conflicts.
Add to those, the rising prominence of cyber wars between countries. Oh, my.
Regardless of your personal view on things, one thing for sure that you’ve got to realize: It’s not ideal to trust anyone else (read: your Government, investment manager, banker, and the likes) for managing your financial future. It’s time to take the matter in your hand.
You’ve got to have a Plan B, and the plan is about diversifying your wealth. Wealth diversification is not only about the types of investment that you should be using for wealth building, but also about where in the world you invest your money in.
Enter internationalization. To explain, internationalization is about giving your financial future the best position to success. It includes investing where it’s the most lucrative, lives where you’re treated the best, and everything else in between.
We’ve talked about internationalization before, so for more details about it read this.
In this article, we’ll focus on protecting your assets in jurisdictions that give you more than just tax cuts. This may include the best places as your second passport — or if you were renouncing your citizenship, a jurisdiction to be called home, the best banking jurisdiction, and the best investment vehicle for your money.
Without further adieu, here are five offshore jurisdictions to consider if you want to get multiple benefits from a single jurisdiction.
Panama is becoming the talk of the world thanks to the Panama Papers leak. Unfortunately, it’s not a positive talk in any means. The media is reporting the leak in such a way that Panama is an evil place that holds wrong-doers assets.
The truth is far from that.
While it’s true that many of Mossack Fonseca law firm’s clients are using offshore perks illegally and unethically, it’s unfair to judge all who choose Panama as a part of their offshore strategy as crooks.
Just like what we’ve explained on a regular basis, offshore banking is perfectly legal; hiding it isn’t.
If you can see through the unfair judgment of the media and people who seem don’t understand — and don’t want to understand — about the offshore world, you’ll see that Panama offers plenty of benefits to asset holders:
- Panama is a dollarized economy, which means that you’ll use US Dollar if you open an offshore bank account there.
- Panama banks are fundamentally sound; they are liquid and well-capitalized — unlike those banks in the Western world.
- Panama, according to Sovereign Man, is the easiest place in the world to establish a second residency. You only need to show that you’re economically active in the country. You don’t have to do business in Panama; you only need to register a Panama-based corporation and make a certain amount of deposit at a local bank. Furthermore, you don’t have to actually live in Panama — meaning, you don’t have to own a home.
- Panama adopts territorial taxation — you don’t pay taxes for business activities outside the jurisdiction.
- Panama’s property is highly affordable, which means that it’s a great place to invest your money offshore in the form of physical properties.
It’s no longer a secret that the United States, known for it’s aggressive offshore policies against its own citizens and other jurisdictions, is actually one of the best offshore jurisdictions, especially for a non-U.S. Citizen.
While the U.S. can demand for U.S. citizens’ data from even the most secretive offshore jurisdictions like Switzerland, they didn’t reciprocate the demand; meaning, non-U.S. Citizens’ account information in the U.S. jurisdictions like Delaware, Wyoming, and Nevada is inaccessible by other jurisdictions.
What’s more, with all the ruckus about AEoI/CRS, offshore account holders in the U.S. can comfortably say that their accounts are safe and sound (read: remains a secret.) How so? It’s simple: The U.S. is not a member of AEoI, which means that your account information is not going to be shared with anyone.
This lead to experts to conclude that the United States is allegedly the strongest offshore jurisdiction in the world.
Establishing a presence in, say, Delaware is easy. Just submit the required documents — which is minimal — pay a very affordable incorporation fee, and you’re all set. Secrecy-wise, you don’t need to disclose the source of funds, and stockholders’ information isn’t public.
And, oh, did we mention that income taxes in Delaware is at zero percent? What could you ask for more?
Cyprus has undergone major shift since the financial crisis in 2012–13. It’s still in rebuilding phase, but things are looking up. One milestone would be the Bank of Cyprus’ hope to float in London after the disastrous past.
Other than the growing economy, what does Cyprus offer to asset owners? Most notably three things.
Firstly, Cyprus’ image is far from the image of the Carribean tax havens. Not popularly known as a tax haven, Cyprus is actually one of the lowest tax regimes in Europe with it’s tax rate of 12.5%.
Secondly, Cyprus is in a unique position due to its accessibility as a member of EU since 2004 and Eurozone since 2008. So, if you’re doing business in the EU region, getting incorporated in Cyprus is a good strategy to execute. There’s no minimum capital requirement and flexible company structure. Most importantly, you’ll get Intra-Community VAT number, which is a requirement for a business to be able to do business with other EU countries legally.
Thirdly, if you open a bank account in Cyprus, you might be interested in knowing that Cyprus isn’t taking part in AEoI, which means that sharing your bank account information is only optional.
What happen if banking secrecy is actually a law? In St. Vincent and the Grenadines — St. Vincent in short — banking secrecy is established in statute. This makes St. Vincent one of the most pivate and secure jurisdictions for protecting your assets.
While St. Vincent is not known as a jurisdiction suitable for businesses due to its high corporate tax (at 32.5 percent,) it establishes itself as investors’ haven.
If you open an account with St. Vincent bank, you have a chance to invest in a myriad of investment vehicles, such as offshore forex trading, physical precious metal investing, and other conventional banking products like time deposits.
Perhaps the most interesting feature is the world’s first gold/silver backed account, which essentially having your bank account denominated in gold and/or silver, while having a debit card associated with it.
5. Hong Kong
Hong Kong is one of the most reputable financial centers in the world. It’s arguably the most solvent jurisdiction in the world, with highly liquid and well-capitalized banks. The banking system is world-class and exemplary. Deposit requirements are minimal, but due to tightening security regulations, you may need to visit the country in person to open a bank account (especially HSBC.)
The excellent banking system is coupled with ease of company formation process: Setting up a company in Hong Kong requires no minimum capital requirement, and to make it eligible, you only need to register one director and one shareholder.
Tax-wise, Hong Kong is not perceived as tax haven, but with a low-ish tax of 16.5% for business activities inside of Hong Kong and tax exeption for activities outside of Hong Kong, it’s an ideal jurisdiction for your business’ tax planning endeavor.
As you can see, each of the jurisdiction we covered above offers much more than just tax benefits. Ease of establishing a second residency, access to investment opportunities, ease of doing business, enhanced secrecy and reputational benefits are what offered by those jurisdictions.
Of course, there are many other offshore jurisdictions offering multiple benefits for asset owners. Do your research and list the jurisdictions that may fit your wealth building grand plan well.
As we have the knowledge on various offshore jurisdictions, you can ask us anything about getting incorporated or opening an account offshore; don’t worry, it’s free of charge.