With banks failing, governments coercing and economies collapsing, establishing yourself offshore is more important than ever. Despite the attention grabbing headlines showing solemn face bankers being slapped with heavy fines by the IRS for tax evasion, the offshore industry couldn’t be doing better.
The very reason why the IRS, FATCA and the US government regulators are becoming increasingly tight on foreign banks, offshore accounts and international transactions, is because the offshore industry is growing at such an alarmingly rate due to the current international political and economic uncertainties, that they felt compelled to intervene in hopes that some of the deferred tax revenue might cover their increasingly large deficit.
With banks failing round the world (2008-2010 500 banks closed in the US alone); governments coercing (through FATCA compliance regulations, and stolen retirement funds in Hungary, Poland, France); and economies collapsing, (Venezuela, Greece, and Argentina without mentioning half of Eastern Europe which is on the brink of collapse) the need to protect your assets is higher than ever.
While the offshore industry has been given a bad rap as it is smeared through countless headline grabbing controversies. We have been built a narrative around offshore banking. Sitting on private yachts smoking cigars with panama hats, piles of cocaine sitting around cabanas in the Carribean handing over briefcases filled with cash, secret meetings with suited government and bank officials to lauder money through the banking system.
Offshore banking now is some exotic affair that has been romanticized. Money Laundering is almost made sexy. Provocative imagery is the only way to capture the imagination. And it seems like they did a good job, because now offshore banking is equated with tax evasion.
The simple fact is, that its a perfectly legal. Owning an offshore company whether in the Caribbean or Germany makes no difference. If I live in Canada with a UK bank account, I have an offshore account. If I live in Australia and I have a Cyprus Company, I have offshore company.
Foreign ownership of an offshore company or account is not as exotic and mysterious as all that its made out too be. There are many liberal tax regimes that provides serious incentives for foreign capital. If you run a global or digital business, why wouldn't you go offshore?
It is of no surprise, then, that over 70% of Fortune 500 companies use offshore companies as a means to lower their tax-burden. Despite whatever is said about offshore vehicles whether companies or accounts, they provide necessary services for companies conducting global business.
In such a rapidly changing international environment, its better to be prepared, than to be caught unprepared for the uncertainties that lie ahead.