operating offshore really protect your wealth? It sounds great on paper, but
once you move beyond the basics, you begin to realize that there’s more to
operating offshore and offshore banking than you may have first thought.
Giovanni Caporaso Gottlieb, Founder of Caporaso Gottlieb & Partners Law Office of
Panama provides insight into
operating offshore and provides informative tips that will help you have a
better experience with operating offshore and offshore banking.
What does offshore mean?
Offshore literally means outside of territorial waters or, in the case of a
financial operation, carried out outside of the country of residence.
Why go offshore?
Simply to protect one’s capital and to reduce tax burdens. Presently, more than
50 jurisdictions exist that offer one or more incentives to non-resident
investors; some of these countries are also true vacation paradises.
country that is considered to be a tax shelter offers some advantages limited
to residents or corporations domiciled there. For example, in the Principality
of Monaco, you don’t pay personal income taxes, while corporations are very
highly taxed. In Panama it’s exactly the opposite, as long as the corporation
domiciled there doesn’t carry out their activities on national territory.
the USA, during the years of prohibition and when gambling was prohibited, some
bold businessmen opened up floating casinos where, outside of territorial
waters, gambling flowed on rivers of alcoholic beverages.
offshore industry is small and mysterious, although according to the latest
estimates, it manages more than 60% of the world’s capital.
What are the benefits of an offshore company?
Offshore companies basically offer the anonymity of their owners and generally
have a reduced cost compared to companies in many industrialized countries.
from an offshore territory, other than reducing the responsibility of the
shareholders, you can also reduce the fiscal burden. Generally, 1-3 directors
in the Statute and the shares are made out to the bearer. If the client doesn’t
desire to appear, our legal firm offers the managers and a notarized and apostilled
(recognized by the Foreign Ministry) general proxy is furnished to the
owner/shareholder for the administration of the company—buying, selling,
opening bank accounts, opening branches, etc. Shares are usually consigned to
the bearer. The capital doesn’t have to be deposited; you only pay a tax on the
same thing that is comprised in the price of registration.
Why open an offshore company or foundation?
There are many reasons to open an offshore company or foundation, such as:
To open accounts abroad and/or stock exchange investments, and be able to
conceal the real beneficiary in case of need (divorce, distraint of goods,
2) To participate in national companies,
concealing the real partners.
3) To buy and sell merchandize to your own national
business, or to others, putting the desired price in the invoice.
To invoice services as though they had been performed abroad, avoiding the
payment of taxes, (consultations, web services, projects, books, articles,
5) To protect your goods in Italy or abroad.
To avoid judiciary distraints.
To avoid inheritance taxes and to guarantee a better future for your family.
To create an economic alternative in complete anonymity.
To reduce tax burdens.
To invest abroad.
There are several offshore jurisdictions, even some in Europe and USA. Which
are the best?
When you decide to take the offshore step, the further away from home you go,
the better your advantages will be. We prefer choosing the Panamanian companies because of their low costs, administration ease
(practically, there are no requirements), and because of the fact that since
1932, Panama offers the best offshore tax laws.
Did the crisis affect tax havens?
We provide tax planning solutions for companies looking to locate offshore. We
also believe that those who are new to offshore banking are thinking twice
about moving in that direction. Those who are familiar with its mechanisms feel
it is a haven in the present climate.
and Europeans are really worried about the situation at the moment. If you see
big banks collapsing, you may think small ones are too—it’s not true. If you
see crisis in Europe and the U.S., you may think there is also a crisis in tax
havens, but it’s really not like this. There is a decreased demand from new
clients, but an increase from people who know the offshore system, as they
think the crisis didn’t affect tax havens.
What is the difference between on-shore banking (that which you do from your
home territory) and offshore banking?
Offshore banks are those that prefer working with VIP clients, with private
banks and promote investments. They don’t like moveable accounts, or rather,
those where 1,000 enter and 999 go out. If you don’t have a large volume of
business, it’s better to alternate between two banks so that the banking system
doesn’t pick up on the entrance and then immediate exit of the funds.
Which bank should I choose and in what country?
It depends on your economic assets and on the degree of security that you
desire. The banks that have an A classification may be the best choice, while
the large AAA banks may be more compromising. Essentially, these large banks want
nothing to do with poor clients. If you can tell us about your estimated
business volume and inform us of the amount that you can deposit or invest with
the bank, we can inform you of the best option.
Offshore banking: institutional vs. personal accounts
The breakdown between Institutional and Personal accounts is thought to be
evenly split. It’s difficult to make an exact determination of the relative
volume of accounts for personal against business use, as there is a tendency
for clients to keep their savings in commercial accounts.
we do not recommend a personal account to our clients because a personal
account has a name.
What about regulation?
We advise clients on the workings of tax havens in both Europe and Latin
America, and we have been finding difficulty advocating European destinations
for our clients.
I don’t recommend because it has become too co-operative. The problem is in
Europe, when they are investigating tax evasion, they also try to put money
laundering on the investigation in order to get the authorization from the
judges to check accounts.
What are the reasons for going offshore?
It all depends on the client. Sometimes we use several different banking
centers and accounts in one country, credit lines in another and a company in a
prefer to deal with international banks because local banks, which are often
more conservative, deal more with Latin American clients. About 90% of our
clients are from outside the region and are looking to invest abroad.
dealing with those looking to locate offshore, our law office pre-checks
clients so that we know where the money is coming from. In the current climate,
many institutions take great care with their reputation. At the moment, all
banks are concerned with their image, so they conduct a very thorough review on