How to Use Tax Havens

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How to Use Tax Havens

Written by: abrowell 296 views

Are you considering moving your money to a Tax haven? Tax havens are domains, or countries, in which taxes are levied at a low rate or not at all. This can be of tremendous benefit to wealthy individuals or firms who are hoping to relieve themselves of the burden of paying the amount of tax they would otherwise owe. This is far from a mundane area of tax law. Get good advice as you proceed to move your investments offshore to tax havens, as you may find yourself in breach of tax evasion laws.

Steps

Who would use tax havens? Wealthy people or businesses that want to take advantage of no or low tax laws.
There are various Offshore Tax Haven tools that can be used such as offshore bank accounts, offshore company formations, asset protection trust, private banking, boat registration, international business companies and limited liability companies.
Tax havens tend to be chosen either by referral or from notoriety. The most popular are Switzerland, Bahamas, Gibraltar, Isle of Man, Jersey, Cayman Islands, Luxembourg and the British Virgin Islands.
Not much differs from one to another as they all offer more or less the same financial services, but it’s more a case of stability and recommendations swaying the user.
The very wealthy tend to use offshore private banks for wealth management and asset protection. The most popular being Swiss private banks, aka “The Rolls Royce of Banking”.
Offshore private banks provide wealthy clients a private banker for wealth management, pension and inheritance planning and tax consultations.
Offshore companies are good tax vehicles and asset protection tools to avoid possible litigation or tax burdens.

Tips

If you are looking for wealth management then go for private banking.
If you are worried about being sued or litigation, then an offshore company will protect your assets and wealth.
More and more North Americans are putting their assets and wealth offshore before they get married, for protection in case of divorce!
All banks will ask you where your funds have come from as part of international “Know Your Client” requirements. Here is a typical example of offshore account opening requirements.
You will have to provide identity for opening an offshore bank account or registering an offshore company.
Anonymous banking is not anonymous, the bank have to know your identity. It is only anonymous outside of the offshore bank. Anonymous bank accounts are also known as numbered accounts.

Warnings

You will have to provide due diligence for any offshore financial service.
Be careful about using UBS, the largest offshore swiss bank, if you are American. They were recently put under pressure by the SEC and revealed all of their U.S. account holders to the government.