Posts Tagged UBS settlement

Regarding the hype and misinformation around the issue of jurisdictions relaxing their secrecy laws and allowing for exchange of information, reality ends up being far removed from what the anti-offshore protagonists like to claim is really happening.

Take the case of the current UBS settlement deal between the U.S. and Switzerland that is being reached. What is quite clear is that the wholesale lifting of banking secrecy in Switzerland is clearly not happening as many in the U.S. government and its media mouthpieces had been hoping.  Instead it’s a much more limited exchange of information based on a very small fraction of the 52,000 U.S. account holders probably based on documented details of tax evasion being first presented rather then a wholesale “fishing expedition”.

Of course, even with Panama, we can expect to see some “tinkering around the edges”, such as removing the largely irrelevant but highly irritating (at least to the OECD) bearer share option that has always been a characteristic of Panama corporate law.  Banks worldwide, in any case, require account holders to state who is the actual beneficial owner, so the anonymity it sustains has largely to do with situations where banking is not involved – such as in a transfer of a piece of property owned by a bearer share company.

In actuality even if countries like Panama or Belize ended up relaxing banking secrecy for documented cases of tax fraud, (unlikely at this point) it would not make any difference to our offshore planning advice. This is because our offshore planning strategy has never really relied on banking secrecy and financial privacy in the first place.

Therefore, whether or not any concessions end up being made is largely a non-issue. This is because we regularly recommend “layering” techniques that use multiple structures and jurisdictions along with the use of shareholder foundations, properly structured with beneficiaries such as legitimate charities or testamentary trusts. We can also set up a true charitable public foundation where international recognition of the charity is vital.

We have always offered this type of “bullet proof” offshore protection to those that need a more thorough and robust system but in the past many people did not feel they had a sufficient incentive and would cut corners by just setting up a basic structure relying on financial privacy laws to do the rest.  In many cases this may have been because many did not want to invest that much more then what was required for a company and a bank account.

However, even a sophisticated system with a layered design using multiple jurisdictions, bank accounts and several different structures does not need to cost much more then $5,000 or $6,000 at most. Yes, it’s more costly then just setting up a company but it will make the ongoing debate and fear mongering largely irrelevant as you will be protected come what may.  There is no doubt that changes will happen, but don’t expect the type of drastic changes being hyped, and even if they eventually do sleep well at night knowing that you planned for the worst contingencies.

Contact us if you need to set up a “bullet proof” offshore strategy that will work as effectively now as it will in the future no matter what changes lay in store for the world.