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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Prosperity & Privacy in the Offshore World
Tuesday, October 22, 2002 - Vol. 4 No. 109
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In This Issue:
* COMMENT: Offshore Investment Myths
* OFFSHORE: U.S. Congress Recess Stops Inversion Bill; US Treasury Opposes It. Puerto Rican Loophole. Tax Reform? Labour Attacks UK Havens, Uses Them Secretly. Ireland Votes 'Yes.' EU Income Taxes? Andorra Treaty. Cyprus Haven? Swiss-EU Battle. Blacklist Updated. South Africa No Tax Haven.
* WEALTH: UK Foreign Residents Loophole OK. Islamic Banking. Saudi Terror Cash. Brazil Banks. Billions for Anti-ML Rules. Russian Flight Capital. Caribbean Bank Merger. Candidate Tax Shelter Woes.
* PRIVACY & RIGHTS: US Justice Dept. Out of Control.
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* COMMENT: Offshore Investment Myths
Dear A-Letter Reader:
The political circus surrounding American corporations offshore 're-incorporation' to save taxes has exposed the economic ignorance of; a) US politicians; b) US reporters and editorial writers; and, c) the American public.
The latter group can be forgiven for not knowing the truth; that the oppressive US tax code drives businesses to seek offshore tax breaks. But the first two groups, the pols and the press, supposedly have an obligation to inform and educate the public.
My colleague, Mark Nestmann, editor of the Sovereign Individual, addressed this anti-offshore attitude recently, exposing myths about foreign investment held by some Americans. Those myths include: * 1. 'Many offshore investments are illegal.' Fact: No US laws prohibit any offshore investments, although most are taxable and must be reported to the IRS.
* 2. 'It's not patriotic to invest offshore.' Fact: The US is the world's largest tax haven, attracting over US$10 trillion in foreign investment. But tax free access to the US is restricted to non-US persons. US persons who invest offshore are only taking advantage of the same opportunities the US affords foreigners, but unfairly forbids its own citizens.
* 3. 'I'm not rich, so I can't benefit from offshore investments.' Fact: You can open an offshore bank account for as little as US$15,000, with easy access to vast investment opportunities, including foreign stocks, bonds and CDs.
* 4. 'I'll be audited by the IRS if I invest offshore.' Fact: The great majority of IRS investigations of offshore investors are aimed at those who fail to report offshore accounts and profits, not those that do.
* 5. 'US investments are safer than offshore investments. Fact: Many international markets are safer than the US. Example: The Swiss insurance industry has never experienced a business failure in its 140 year history. About 1% of US insurance companies each year have serious financial difficulties, including bankruptcy.
* 6. 'It's more expensive to invest offshore.' Fact: Many offshore investments are much better cost deals than their US counterparts. Example: Purchase foreign currency CDs outside the US, and you receive higher interest rates and pay lower fees.
* 7. 'All investments I want are in the US.' Fact: Over 70% of global financial activity takes place outside the US. Offshore markets are essential to diversify investments internationally.
* 8. 'There are no longer any privacy advantages to offshore investing.' Fact: You must report and pay taxes on most offshore investments, but assets outside the US disappear from the domestic 'radar screen and from business competitors, sue happy lawyers and identity thieves. The fact is, international investing is safer and more profitable than ever, and it's perfectly legal for you to 'go offshore.'
That's the way that it looks from here.
BOB BAUMAN, Editor
P.S. To subscribe to our very own offshore investment advisory service please click here:
LINK: http://www.agora-inc.com/reports/GMI/WGMICA07/
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* COMMENT LINKS:
U.S. BEAR MARKET DRIVES INVESTORS TO EUROPE
A continental refuge from US corporate, stock woes. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/Story
FT/FullStory&c=StoryFT&cid=1033849150462
* UK mutual fund reforms aimed at European rivals business share.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=9728
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MAJOR REASON FOR AMERICANS TO GO OFFSHORE
US Chamber airs anti-lawsuit commercials attacking plaintiffs bar.
LINK: http://www.abanet.org/journal/ereport/oct18ads.html
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WHY HONEST BUSINESSES USE OFFSHORE CORPORATIONS
Sovereign Society Council of Experts member WILLIAM WOODS
explains how e-business can use offshore venues.
LINK: http://www.offshoreon.com/articles/3655.asp?docid=3655
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* OFFSHORE *
U.S. CONGRESS DROPS ANTI-OFFSHORE BILL WASHINGTON: As we reported Friday, the US Congress has recessed for Nov. 5 national elections, leaving anti-offshore corporate inversion proposals dead in the water. They could be revived later.
LINKS: http://www.tax-news.com/asp/story/story.asp?storyname=9742
http://www.electronicaccountant.com/ElectronicAccountant/index.cfm?
txtFuse=dspShellContent&fuseAction=DISPLAY&numContentID=
13250&numTaxonomyID=179
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US TREASURY OFFICIAL WARNS AGAINST ANTI-OFFSHORE BILL WASHINGTON: Official warns lawmakers against offshore bill. LINKS:
http://www.ptd.net/webnews/wed/cz/Qus-companies-offshore.RpXS_
COG.htmlhttp://www.tax-news.com/asp/story/story.asp?storyname=9734
* US offshore Puerto Rican corporate tax loophole under siege. LINK:
http://www.puertorico-herald.org/issues/2002/vol6n42/WashUpdate0642-en.shtml
* US Treas. Sec. O'Neill proposes radical corporate tax reforms. LINK:
http://custom.marketwatch.com/custom/iwon-com/news-story.asp?guid
={FB8BD0DF-9478-420B-AA9B-163AECCE47F3
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U.K. LABOUR'S ATTACK ON BRITISH TAX HAVENS
A good summary of the Blair government's systematic attack on the Channel Islands and the Isle of Man and their roles as tax havens.
LINK: http://www.thescotsman.co.uk/business.cfm?id=1155412002
* Hypocritical Labour denounces, but secretly uses UK tax havens. LINK:
http://politics.guardian.co.uk/economics/comment/0,11268,816010,00.html
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IRELAND VOTES 'YES' ON E.U. EXPANSION
Ten new member states now may be added to EU. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT
/FullStory&c=StoryFT&cid=1033849145998
* Plans for EU-wide individual income tax already under way.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=9735
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ANDORRA TRILATERAL TREATY PENDING ANDORRA-LA-VIELLE: New pact governs rights of Andorrans, French and Spanish citizens in Pyrenees tax haven.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=9740
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CYPRUS INSISTS IT IS STILL A TAX HAVEN NICOSIA: But financial privacy is curbed, IBC taxes raised. LINK:
http://www.ekathimerini.com/4dcgi/news/economy__9022745KathiLev&xml/
&aspKath/economy.asp?fdate=21/10/2002
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SWISS-E.U. TAX BATTLE SUMMARIZED
Offshoreon.com pulls together the Swiss-EU policy positions on tax information sharing, banking secrecy and withholding taxes.
LINK: http://www.offshoreon.com/articles/3666.asp?docid=3666
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OFFSHORE ANTI-MONEY LAUNDERING NEWS
* NASSAU: Clean cash the goal of BAHAMAS programs. LINK:
http://www.thenassauguardian.com/business/276106924608130.php
* COOK ISLANDS stays on FATF dirty cash blacklist.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=9723
* DOMINICA, NIUE removed from FATF blacklist.
LINK: http://www.offshoreon.com/articles/3645.asp?docid=3645
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SOUTH AFRICA WILL NOT BE A TAX HAVEN JOHANNESBURG:
Top ANC official says government will not
tolerate nation becoming a tax haven for foreigners.
LINK: http://allafrica.com/stories/200210200064.html
* RSA launches new anti-money laundering group.
LINK: http://www.mg.co.za/Content/l3.jsp?a=12&o=10714
* RSA-based De Beers reforms diamond distribution system.
LINK: http://www.mg.co.za/Content/l3.jsp?a=12&o=10525
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* WEALTH *
BRITISH BASED FOREIGNERS TAX LOOPHOLE PRESERVED LONDON:
Brown's promise to end tax free gap put off indefinitely. LINK:
http://news.independent.co.uk/uk/politics/story.jsp?story=344272
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ISLAMIC BANKING MOVING FORWARD
A look inside MALAYSIA and offshore Islamic banking. LINK:
http://biz.thestar.com.my/news/story.asp?file=/2002/10/18/business
/mmtajudin&sec=business
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U.S. TRIES TO STOP SAUDI TERROR CASH FLOW
Treasury official visits Switzerland, Liechtenstein, Luxembourg. LINK:
http://www.washingtonpost.com/wp-dyn/articles/A43643-2002Oct17.html
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THE BESIEGED BANKS OF BRAZIL PANAMA:
Sovereign Society Council of Experts member, DEREK SAMBROOK, offers his thoughts on the Brazilian banking crisis. LINK:
http://www.trustserv.com/Letter%20from%20Panama%20-%20
Current%20Issue.htm
* Jitters over Brazil debt mask optimism. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/
FullStory&c=StoryFT&cid=1033849139827
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U.S. CLIENTS STUCK WITH $11 BILLION IN ADDED COSTS
US banks, broker, dealers, insurance firms, clients will pay $11 billion in added costs for new American anti-money laundering rules. LINK:
http://www.institutionalinvestor.com/iiochannel/banking/20021017000900.htm
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RUSSIA BLACKLISTS WESTERN BANKS MOSCOW:
Government accuses flight capital banks in the West.
LINK: http://english.pravda.ru/main/2002/10/18/38327.html
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MAJOR CARIBBEAN BANK MERGER
KINGSTON, Jamaica: UK Barclays and CIBC of Canada merge. LINKS:
http://www.stockhouse.ca/news/news.asp?tick=CM&newsid=1354090
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SWISS BANK SHARES, CAYMANS CORP SNARE CANDIDATE KPMG
tax strategy created major losses; California GOP candidate for governor who used it may face major loss at the polls. LINK:
http://www.bayarea.com/mld/mercurynews/news/politics/4329861.htm
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* PRIVACY & RIGHTS *
HOUSE REPUBLICAN LEADERS KNOCKS ASHCROFT'S COPS WASHINGTON: US Rep.
Dick Armey tells Bush, and the ACLU agrees, the US Justice Dept. is out of control. LINK:
http://www.newsmax.com/showinsidecover.shtml?a=2002/10/17/101713
* Former US Senator warns against losing civil liberties. LINK:
http://www.lasvegassun.com/sunbin/stories/nevada/2002/oct/17/
101710581.html
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
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