USA: The strongest tax haven in the world

It’s official: The United States is now becoming not only one of the largest but also one of the strongest tax havens in the world. Read on to find out the why’s and how’s.

To the general public, the United States — especially with the plans executed by IRS and DoJ — is known as a jurisdiction with strong tax laws and asset ownership policies; such laws and policies enable U.S. taxmen and attorneys to seeks almost every corner of the world for U.S. citizens’ hidden, unreported wealth.

Due to such tenacity, offshore financial institutions are reluctant — even rejecting — U.S. citizens’ account applications. The costs and risks involved are just too resource consuming. Just ask Swiss banks. The U.S. singlehandedly put Swiss banks’ secrecy to an end.

For U.S. citizens, there’s (almost) nowhere to hide. Fortunately — or unfortunately, depending on your citizenship status — that’s not the case if you’re not holding a U.S. passport.

That’s right, the U.S., in their plan to recover ‘lost’ tax revenues from offshore jurisdictions, demand offshore financial institutions to release information about accounts owned by U.S. citizens.

But that’s where the story ends. The rest is what makes the U.S. one of the strongest tax havens in the world.

No reciprocity

It’s an eye opener reading various reports that the U.S., despite its aggressive push toward tax subjects’ asset information, isn’t reciprocating their demand. In other words, the U.S. asks other jurisdictions to leak wealth information, but safe-guard the information of assets inside the U.S. jurisdiction.

Here’s one example: The global push toward transparency via AEoI/CRS requires for countries to commit for financial data sharing and exchange. The U.S. is not a member, which means there’s no information exchange for assets held in the U.S. jurisdictions. This is one of the biggest reasons why the U.S. is one of the strongest when it comes to asset protection.

The message is pretty loud and clear: If you’re not a U.S. citizen, then the U.S. may be your best choice of getting your assets protected.

Enormous wealth protected in the U.S. — in full secrecy mode

How big is the U.S. as a tax haven, anyway?

The BCG estimated that there’s $800bn of offshore wealth stashed in the U.S. And with 6 percent of growth annually in asset managed, actually boosted by AEoI/CRS, the U.S. sits at a nice place — still behind Switzerland’s $2.7 trillion, but the growth rate is better than the competitors other than Hong Kong and Singapore.

What’s not known by the general public is the fact that there are offshore centers — huge ones — residing in the United States. There are U.S. states which laws enable individual and companies to enjoy tax-free wealth, such as Nevada, Delaware, Montana, South Dakota, Wyoming and New York.

Those are not small jurisdictions in term of offshore wealth, by all means.

For example, in South Dakota, there are assets secured in trusts worth $226 billion (2014 figure.) The figure nearly grows tenfold compared to 2006 figure, $32.8 billion.

It doesn’t need to have large buildings to hold such wealth, obviously: A single address at 201 South Phillips Avenue, Sioux Falls, South Dakota is a listed address of 40 trust companies holding $80 billion worth of assets.

Here’s another example: A single address in Wilmington, Delaware is the registered address of about 285,000 companies. The 1209 North Orange Street is indeed a popular company headquarter address, which happens to be also the address of firms owned by Hillary Clinton and Donald Trump.

On top of those, your account information is well-protected. No annual reporting needed and no information sharing required.

And yes, there is no income taxes, too.

Easy company setup process

Just like setting up a company with any other offshore jurisdictions, setting up one in U.S. jurisdictions is a straightforward process. You don’t even need to come to the U.S. for such purpose.

Let’s take Delaware as an example. Using incorporation services like ours, what you only need is to prepare the required documents, and wait for the process to finalize, typically in just three working days.

You can also open a bank account in Delaware. However, due to the changes in policies, you do need to come in person to setup the account. Alternatively, you could open your bank account elsewhere and link it up with your Delaware company. Consult with us and/or your trusted attorney for the best wealth protection planning for you.

Takeaway

Secrecy in the U.S. shouldn’t be taken lightly. The U.S. government guards their best interests with passion, and that includes your company in Delaware and any other U.S. onshore tax haven jurisdictions.

Attempts have been made to change the rule to make (shell) companies pay taxes, but none of them will be passed as a law — for the time being, at least.

Those upper hands make the U.S. a strong tax haven: Extra-protective secrecy policies, no income tax, and strong growth. It’s heaven for offshore asset owners.