How to Evaluate Different Offshore Courts
How to Evaluate Different Offshore Courts

In today's world, there are plenty of shady businesses that will offer you a laundry list of jurisdictions to set up your corporation or bank account in. The problem is that almost all of these countries aren't any good anymore; for example, many of these companies are based on Caribbean islands and trick clients into thinking they are legitimate offshore jurisdictions that provide privacy benefits. Totally incorrect!
Let's take a look at what matters when choosing an offshore jurisdiction.
Bank Secrecy—We take no interest in anything that compromises this. In our ideal world, a competent court in the nation where the bank is based would be required before the bank could reveal any details regarding the account, including the existence of the account itself. Nowhere else in the modern world is there more secrecy than this. Accounts with numbers are no more. Even though I've seen some ads for "Sparbuch accounts" in Austria, I can assure you that they are no longer available. The relevant country's laws must explicitly prohibit the disclosure of financial information. Although there is no explicit legal requirement to keep financial information confidential in Belize, the public appears to have faith in banks there nevertheless. We are advocating for criminal and civil sanctions for violations of bank secrecy regulations, as well as the ability to sue banks for such infractions. Panama passes this evaluation.
Mutual Legal Assistance Treaty (MLAT) applies. These pacts have been signed by a lot of countries. Please click here to view the list of nations that have signed these agreements with the United States, courtesy of the US government:
visit this link: http://travel.state.gov/law/info/judicial/judicial_690.html.
How many countries have entered into such pacts is astonishing. Panama is also a party to such an agreement, however its scope is somewhat narrow; for details, see below:
A multi-national case involving drugs and money laundering is the main one in which Panama will participate. Child pornography and actual acts of terrorism are two other areas in which they will become involved. No need to be worried about this if you are not involved in the drug trade, money laundering (where large sums of money are usually involved), child pornography, or terrorism. According to the MLAT, in order to establish compliance, a criminal prosecution case must be filed in the criminal courts of the requesting government (i.e., no fishing expeditions). Then, requests for information must be made through diplomatic channels involving the embassies. After reviewing the requests, officials from Panama either decide whether to comply or ask for additional information. This process continues until a determination is reached. Cases like these can drag on for a long time. Please don't take this as an indication that Panama does this frequently; it is just something that happens from time to time around the world. When the home country of a bank is alerted to a problem, they may initiate their own investigation. This usually involves seizing relevant records and documents. As a result, the process can be delayed, sometimes for years. This is due to the slow pace of their justice systems. Any civil lawsuit, including those involving a business, a divorce, a bankruptcy, a civil judgment, a tax dispute, or any other type of civil action, is not subject to the MLAT. From a Panamanian perspective, this does not address any and all tax issues. A civil, rather than a criminal, crime in Panama is failing to pay one's income taxes. In cases involving allegations of fraudulent income tax returns (e.g., failure to declare all income or omission of certain items), Switzerland cooperates with the complaining country. No extradition treaties apply to Panama. Panama gets a passing grade.
Tax Agreements? Tax treaties include many so-called offshore jurisdictions. Look here for a rundown of nations that have tax treaties in place with the US. Except for the United States, Panama has no international tax treaties. Along with the majority of so-called offshore countries, even Switzerland and Belize are parties to tax treaties. To view a comprehensive list of nations with tax treaties, along with links to read the treaties themselves—a truly illuminating resource—click here:
The website, Panama Law, lists nations that have tax treaties.
Bank License Type—Instead of ordinary banking licenses, many of these offshore banks possess offshore banking licenses. Come with me. Bank licenses in these island jurisdictions typically fall into distinct categories. Banks typically encounter three types of licenses: one that restricts their business activities to residents only, another that allows them to deal exclusively with non-residents, and a third that permits them to deal with both types of customers. For obvious reasons, the government won't allow an offshore bank to conduct business with its own residents, therefore doing business with such a bank is fraught with peril. The Panamanian banks we work with are always accessible to locals and never restricted to foreigners. The vast majority of online banking services only work with banks that hold an offshore license.
Corporate Secrecy — This is a crucial consideration. Companies based in dozens of countries are being sold on a lot of websites. When it comes to protecting personal information, only bearer share corporations are worth considering. What this means is that whoever has tangible stock certificates of the corporation also owns a piece of that corporation. No documentation or reporting of ownership is required. There is no requirement to disclose a sale of the corporation. Countries that hold the view that individuals have no right to privacy strongly disapprove of this type of company, which is known as a non-transparent firm. No documentation or reporting of ownership is necessary in Panama for a bearer share business or S.A. corporation. The only thing that's needed is to employ our experienced directors, who will then serve as directors on numerous corporations. You can avoid being personally exposed as a director by appointing one of our expert nominees. They will supply you with the necessary paperwork, including a letter of resignation and a general power of attorney. There has been a recent incident involving the Swift System that revealed the United States was monitoring Swift transactions; the exact nature and duration of this monitoring are unknown, but it is prudent to assume the worst. This highlights the need of corporation privacy in light of the fact that governments have begun to monitor bank wire transactions. There is a lack of transparency when using an anonymous bearer share Panama Corporation since no one knows who owns the corporation; all they know is that the corporation received or delivered a wire and the other party's side of the transaction. In a big way, this protects your privacy. Just think about how ridiculous it would be to utilize an offshore organization when everyone knows who owns it and it's easy to figure out who's giving or receiving money in a matter of seconds thanks to technology. As an offshore firm tricks consumers into believing their privacy is being safeguarded, this is what is being offered online. Panama succeeds yet again.
Corporations must be able to avoid paying taxes on income earned outside of their home nation by establishing an offshore jurisdiction that does not impose such a tax. Not only does Panama pass this standard, but so do a great many other nations. Panama does not impose any taxes on inheritances or capital gains, making it an attractive destination for stock market investors. Panama gets a passing grade.
Considerations Regarding the Weather-Due to their island locations, several of these offshore governments experience blackouts during hurricanes. Seismic events, tsunamis, and volcanic eruptions should also be considered. The last thing you need is for a storm to knock out power just when you need to withdraw cash. The absence of potential hazards such as storms, tsunamis, volcanoes, and earthquakes is the primary rationale behind the location of the Panama Canal. Panama is declared test-free.
In order to assess an offshore jurisdiction, one needs examine its infrastructure, which includes its power generators, telephone system, and internet. You would like not to endure lengthy wait times whenever you want to access your bank's online services or speak with a representative over the phone. American forces largely constructed Panama before abandoning the country in the year 2000. Phones, power, roads, etc. are all American-style. Panama has cell phone service and internet that rivals that of the United States or Canada. Panama once again passes the exam.
Political Consistency—You wouldn't want to be banking in a tax haven offshore jurisdiction only to learn that a revolution has happened and that all of your money is gone. Another scenario could play out similarly to the one in Grenada, where widespread fraud led to the collapse and bankruptcy of offshore institutions, resulting in the loss of money for the local population. Democracy in Panama is stable. Controversy is anticipated to abound due to Panama's status as a neutral UN member. The Panama Canal, which the United States donated to Panama in 2000, is the subject of a treaty between the two countries. It is within the United States' legal authority to intervene in defense of the Panama Canal if it ever feels threatened. This means that the United States would send fighter jets to Panama within an hour or two in the event of a revolution, which is highly unlikely given the country's strong democracy. The following day, a fleet of navy aircraft carriers accompanied by an expeditionary force of marines could be spotted in Panama Bay. After that, there would be a nuclear submarine, paratroopers, helicopters, and an airlift. As far as invasions, attacks, or revolutions in Panama are concerned, it passes muster.
Money - The US dollar is the currency of Panama. The US dollar is the currency of choice for banks, ATMs, and even the use of US coins. For the currency, this bodes well. When I say stable, think of the Grand Cayman or Bahamian Dollars; I know some of you may argue that the Euro is better, and that's OK. When you use dollars in Panama, there are no conversion expenses. Yet again, Panama comes out on top.
In terms of EU ties, Panama once again passes the test without any linkages that could compromise privacy. Residents of the European Union are not required to register their income or pay withholding taxes. Any citizen of the United States can open a bank account, own a corporation, purchase real estate, etc. in Panama without providing their national tax identification number. Yet again, Panama comes out on top.
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