One good reason is.... Foreign non-resident alien individuals, offshore companies, offshore trusts and offshore banks avoid all US capital gains taxes on their stock market trades because the U.S. has never taxed the capital gains of non-resident entities that do not have an office or are "doing business inside the United States".
But, there are other tax loopholes for foreigners. Under US estate tax law, a nonresident alien individual that dies holding his US assets in his own name will be subject to US estate taxes at a rate of 55% - with no marital deduction allowed, and only a $60,000 exclusion. Foreigners that hold their US assets in offshore companies can avoid all US estate taxes. That's one reason why there were over 128,000 companies registered in the Bahamas alone - with another 450,000+ in the BVI - another commonwealth country that does not tax these companies at all.
There are fewer loopholes for American citizens, yet 65% of the money on deposit in Cayman banks (according to a Cayman government release in 1988) came from the USA! There was not another country on their list that had more money invested in Cayman banks. The Caymans rank as the 4th or 5th largest financial center in the world. The Bahamas are in the top ten. There is more money on deposit in the Cayman banks alone, than in all the commercial banks in the State of California. According to a leading New York prosecutor, there is more money on deposit in the Cayman banks held by Americans than in all of New York's banks. That is a fact.
Sidebar... In June 1998, Union Bank of Switzerland merged with Swiss Bank Corporation to create the new UBS AG, one of the top global investment firms in the world. The investment banking businesses of both banks came together to form Warburg Dillon Read which, reflecting the power and excellence of both the UBS and Warburg brands, became UBS Warburg in May 2000. UBS Warburg is the product of several strong banking cultures, each with a long history, and each one the product itself of a series of strategic acquisitions.
Nearby tax havens like the Cayman Islands, Anguilla, Panama, Nevis, and The Bahamas have become prominent financial centers rivalling the industrial cities such as London, Tokyo and New York for business. The pint sized Cayman Islands now boast more commercial banks (595) in the commercial registrar than in all California. The dollars on deposit in these Cayman banks exceeds $800 billion, which is also more than all the commercial banks in California, and more than all NYC's banks - according to a prominent NY prosecutor who prosecuted Tyco's Bermuda operations and it's chairman for various crimes.
The Bahamas, just 50 miles off the coast of Florida, was once the third largest financial center in the world next to New York and London. Today the Bahamas still ranks in the top ten, just behind the Cayman Islands. There are more than 390 banks and trust companies registered here in Nassau.
We like Anguilla because it has good, protective legislation, and companies can be formed there in a single day. Bahamian IBC’s take 4 working days. Cayman governmental exempt companies costs are almost twice as Anguilla.
Anguilla, The Bahamas, the Cayman Islands and Bermuda have no personal income taxes, no corporate income taxes, no capitol gains taxes, no withholding taxes, no estate, gift or inheritance taxes, no sales taxes, no employment taxes, no death duties, and no probate fees. Guarantees against future taxes are provided by these governments for periods up to 50 years. Exempt trusts can receive guarantee up to 100 years.
Tom Azzara
New Providence Estate Planners, Ltd.
(Consultants)
54 Sandyport Drive
P.O. Box CB 11552
Nassau, Bahamas
Fax/phone: (242) 327-7359
email: taxman@batelnet.bs
website: http://www.bahamasbahamas.com
Amazon.com book reviews for our "Tax Havens of the World" - paste or just click on below..
http://www.amazon.com/exec/obidos/tg/detail/-/1893522024/ref=pm_dp_ln_b_6/002-5920675-7176043?v=glance&s=books&vi=reviews%20
In the ten years I've lived on the island of New Providence in the Bahamas, I've never seen this happen. Where criminalk money laundering is involved, don't expect any nation's bank secrecy to afford any protection.
Years ago, one Swiss banker with banks in Cayman and Switzerland told me that they always do their companies in a different jurisdiction from where the company does its banking. This is good advice, but illegal activities will not be tolerated by any reputable offshore banks.
About the Author:
Tom Azzara lives and works in the sunny, tax free Bahamas. In the last 14 years, Tom has incorporated over 1,250 International Business Companies in Nassau, Bahamas and in Anguilla (a UK Overseas Territory, like the Cayman Islands and BVI).
Beginning in 2,001, we began forming IBCs out of the Crown Colony and no tax haven of Anguilla - 150 miles east of Puerto Rico.
We had had a total of over 400 IBC's (in-house) that were mostly Bahamian in origin, but most all moved to a better jurisdiction - in our opinion.
We've formed more than 220 Anguilla IBCs since the beginning of this year (1-3-2001 thru 2-1-2002).
It takes less than one day to get the necessary documents and company registered in Anguilla, and on the way back to the client the next day.
In January, 2001, I became an "Overseas Agent" for the Anguilla Government Registrar of Companies, and as such, have a signed "official" Agreement with them. I also have same agreement with a barrister in Anguilla - also working directly with Anguilla Government.
We/I can and will provide you with bank contacts and application information for good banks in the following jurisdictions: Isle of Man (a major institution) + Anguilla (2 banks there - one used by the Anguilla government) + Bermuda (one of oldest banking institutions in offshore world).
NOTE: All offshore banks today have tough "due diligence" rules and procedures. More stringent screening of their clients and his activities is now the norm. If you can't tell your bankers what you do and who you are, you can forget about banking offshore.
Once bank accounts are opened, your confidentiality is usually protected under the jurisdiction's "statute" - within a Confidentiality Ordinance or an "Act"
NEWS FLASH AND UPDATES
Post date: 08.01.02
The New York Daily News reported that Harken Energy Corporation--President Bush's now-infamous oil firm -- set up an offshore subsidiary in the Cayman Islands to minimize its taxes. Was this illegal? No Was this immoral? Some say "no," but many say "yes."
And, unfortunately for Bush, Republicans have been among those saying "yes."
"The president is concerned about corporations in America who take advantage set up operations outside of America, in an effort to lower their taxes," White House press secretary Ari Fleischer said just this week. "It's notillegal, but it is immoral," said Charles Grassley, the Republican chairmanof the Senate Finance Committee.
As you might have guessed, both comments were made before the latest Harken revelation. (A day before, in fact.) But Fleischer and Grassley can't exactly disavow them now that they're part of the public record. That'd be unseemly--even for this administration and its supporters.
So the White House has been reduced to trying to find some distinction between other companies fleeing to offshore tax havens and what Harken did. And the distinction the administration has come up with is: Harken didn'tmake any money. "In order to save money [on taxes], you would have to make money, and they didn't make any. They found no oil," White House communications director Dan Bartlett told the Daily News.
Sources: Jonathan Chait is a senior editor at TNR + New York Daily News Only at TNR Online
(views and opinions of of Jon Chair are his own).
For the Tax Haven Reporter's Offshore Request Form click on (or paste in your browser) .....
http://www.bahamasbahamas.com/
In January, 2001, I became an "Overseas Agent" for the Anguilla Government Registrar of Companies, and as such, have a signed "official" Agreement with them. I also have same agreement with a barrister in Anguilla - also working directly with Anguilla Government.
Copyright - "Tax Haven Reporter" - All Rights Reserved
Tom Azzara
New Providence Estate Planners, Ltd.
(Consultants)
54 Sandyport Drive
P.O. Box CB 11552
Nassau, Bahamas
Fax/phone: (242) 327-7359
email: taxman@batelnet.bs
"They have no right to put their hands in my pockets." - General George Washington (1732 - 99)
One of the most effective applications of offshore trusts is in an ownership combination with a limited company. - Richard Graham-Taylor, partner Ernst & Young, Grand Cayman (January 1990)