Wednesday, September 5, 2007
Today many people around the world are worried about their bank accounts. Every time they check their balance they worry about what is going to be in there. It is possible to freeze a personal or business bank account pre-trial and have the assets held without even having your day in court. This can occur in many countries around the world.
Bank Account Location – Panama is the country folks. Forget about accomplishing this in the other countries. Panama has a set of laws pertaining to Foundations. Panama Private Interest Foundations can have assets that are non-embargo able and non-sequesterable, which in plain English means not-freezable or attachable in a pre-trial proceeding.
Pre-Trail Attachments – The way this process work is that someone decides to sue you. Perhaps you deserve to be sued or not. The lawyers may just be looking for a deep pocketed individual to go after; heck you may just settle they don’t know. The lawyers go to the judge privately behind closed doors. This is in some countries called an ex-parte proceeding. You as the defendant are not even aware that you are being sued. They lay out a scenario before the judge that you are a real bad guy and that you will be likely to run away or move your assets (bank account, real estate, stocks, boat, etc) when sued. They base this on a guess of course. Now if they are a big influential law firm the judge will be inclined to listen to these three guys in $900 suits. So they convince the judge to issue an order freezing your bank account, tying up the title on your real estate, cars, boats, etc. Of course they post a bond to the court for damages if they lose. They will not lose since they will just keep running up your legal bills until you quit. They pick their marks carefully. Do not think lawyers like these are different than con men, they aren’t. Now when your money and house is tied up you are going to be more open to settlement aren’t you? Let’s not even get into how you are going to pay for a lawyer when your funds are locked up and you never even had your day in court. Are you getting an idea why so many people bank offshore and have an anonymous bearer share corporation own their real estate?
Panama Private Interest Foundations – This are unique asset protection instruments modeled after the expensive European Foundations protecting the assets of the rich and famous for many years. The Panama versions are very inexpensive (under $2000) while the European versions can run more than ten times that amount. Panama Foundations can be formed in one week. The Panama Foundation is a combination of a will, trust and corporation. They are anonymous. The beneficiaries of the Foundation are not publicly available. The Founder of the Foundation can be an anonymous nominee. The Foundation really has no owner. The Foundation can have secret instructions as to what happens in the event of your death or incapacitation such as your spouse or children get control of the Foundation. Of course one of the nice things is the Panama Foundation can have assets like real estate, bank accounts, planes, boats, cars, stocks, bonds, collectibles, etc. and all of these assets are not attachable in a pre-trial proceeding. If the Panama Foundation itself did something wrong like break a real estate lease for no good reason then it could have its assets attached for the value of the lease. For this and other reasons we suggest that our clients do not have the Panama Foundation engage in any commercial activities directly. A Panama Foundation can own an anonymous Panama Bearer Share Corporation which can be engaged directly in commercial activities.
For more information, please visit:
http://www.panamalaw.org
email at: panamalegal@hush.com
Offshore Company Uses
What we are going to do here is explain to you some of the ways others have used Offshore Corporations. For purposes of this article when we refer to an offshore company or an offshore corporation we mean a bearer share corporation. It is the bearer share corporation that has the possibility of being anonymous. Not all bearer share corporations are as anonymous as others, the jurisdiction matters greatly. It seems the Republic of Panama has the best bearer share corporations in that the ownership of the corporation is based on who has the physical possession of the stock certificates. There is no requirement to report ownership anywhere so it is not recorded in any registry or database. There is also no requirement to record transfers of ownership of the corporation in whole or in part in Panama. Panama has no tax treaties with any countries and no treaties with any country regarding mutual enforcement or collection of civil judgments. To make the scenarios work effectively the offshore corporation must be formed by an attorney so there is attorney client privilege covering the formation of the corporation. If one uses a corporate agent the attorney client privilege is absent and the corporate agent could easily be compelled to reveal who formed the offshore corporation in question. If one took an attorney to court to get into the records concerning an offshore company formation the attorney would likely go to court kicking and screaming attorney client privileged communications all the way and give a heck of a fight to protect his client which in turn protects the livelihood of the attorney. If a corporate agent was use the corporate agent would need to retain an attorney to try to protect the records. The corporate agent has a case is weaker in terms of protecting you since attorney client privilege is a pillar of law in just about every country. The question of how much money the corporate agent would spend to protect your records is a scary question at best. You do want the security of dealing with a lawyer and having attorney client privilege. In Panama corporate agents do not exist, only a lawyer may form a corporation. Buying a corporation from an agent who bought it in turn from a lawyer does not make things any better in terms of the corporate agent still exists as a weak link in your privacy and security.
Panama also does not tax capital gains and offshore derived income without even a need to file any income tax returns if all your income was offshore derived.
1 – Use the offshore company to hold real estate. This works best when the real estate is free of mortgages and any other encumbrances. The title is transferred to the anonymous bearer share corporation and so recorded in the government registry. Now no one can tell who currently owns the property. This is a useful tactic employed by people residing in high crime countries where property owners are at risk for kidnapping, home invasion robberies/kidnapping, extortion and blackmail. It also works as a deterrent against frivolous litigation since most attorneys would run an asset check before filing a case to make sure there is something to collect and real estate is very hard to run away with.
2 – Use the offshore corporation to write a mortgage against real estate. This can be a first mortgage, second mortgage or third mortgage, etc. This so to speak removes equity from a property not leaving one as a target for kidnapping, and frivolous litigation.
3 – Use the offshore corporation to write a loan against property such as heavy equipment, boat, airplane, etc. This removes the equity from the item thus removing it from being a focus point for attorneys interested in filing a frivolous lawsuit. The loan can be a subordinate loan or a senior loan.
4 – Use the offshore company to own your boat. Register the boat in Panama like the major cruise lines do. This way snoops and criminals don’t know who owns that nice boat and this removes you from being a target. If you use a corporation with the words charter in it they will think it is a rented boat.
5 – Use the offshore company to register your airplane. Provides anonymity and asset protection.
6 – Use the offshore company to own art, coins, stamps, jewelry or other collectibles. Document and receipt the transfer to the offshore corporation.
7 - Use the offshore corporation to make loans. The loans can be secured or unsecured. They can have regular payments, interest only with balloon payment at end of term or whatever terms the corporation decides upon using.
8 – Work for the offshore corporation. The corporation can be a professional services company and can hire your services out. You would then be an employee or independent contractor of the offshore company. The corporation can decide how much to pay you, what benefits to provide for you such as full medical coverage, legal insurance, company auto, office, what expenses to give you, the company can hold conferences for all or some of its employees in exotic locations like the Caribbean or Las Vegas, etc.
9 – The offshore corporation can be used as an intellectual property company which holds copyrights, trade marks, software, and licenses.
10 – The offshore company can invest in stocks, bonds, futures, commodities etc. with everything in the name of the anonymous offshore company.
11 – Offshore companies can lease equipment, vehicles, machinery, real estate etc.
12 – An offshore corporation can own the shares of other companies or legal entities
13 – A offshore corporation can own bank accounts, trusts, fixed deposits, CD’s etc.
14 – The offshore corporation can be used for internet businesses. The web site can be owned and registered to the anonymous bearer share corporation thus providing anonymity and protection from personal liability.
15 – The offshore corporation can be used as a Bidding Entity where privacy is important thus concealing the true owners identity from the bid process.
For more information, please visit:
http://www.panamalaw.org
email at: panamalegal@hush.com
Why Go Offshore?
Today we read about a large number of people from a variety of different countries going offshore. By going offshore we mean opening offshore bank accounts, forming offshore companies and offshore foundations in tax haven countries. Some are even opening offshore stock trading accounts. This sort of activity and gets a lot of people wondering why all this sudden excitement over offshore banking and offshore corporations. We’ll try to provide some answers.
Taxes – Most people think the rush to go offshore is to avoid taxation which would in their minds explain why most are going to tax haven countries to form their offshore corporations and open their offshore bank accounts. A tax haven country is a country where offshore derived income is not taxed. The jurisdiction will usually look towards taxation on imported goods to derive their tax base. Generally a tax haven jurisdiction such as Panama will also not have any capital gains tax, no inheritance tax and corporate taxes are generally fixed in the form of a few hundred dollars that is paid each year as the filing fee for the corporation. Some countries allow people to earn money when offshore or out of their country tax free and other countries allow for partial exemptions and others offer no break of any sort. We do feel that people are going offshore for reasons other than tax avoidance or minimization. We often see large corporations are shifting their activities outside of their home country for reasons other than taxation although taxation is probably in there as a determining factor as well. Their operating expenses are so high there is precious few net profit dollars left to be taxed. These companies are trying to stay competitive in their market and are choking on the expenses associated with employee wages, employee benefits, employee medical plan premiums, litigation insurance premiums, discrimination lawsuits, unjust termination lawsuits, retirement benefits, disability insurance premiums, unemployment insurance premiums, and standards for health and safety imposed by their respective governments in the workplace which then brings us to high costs associated with office space. Few if any of these expenses follows the large corporation when they move offshore. Taxes tend to come into play but that is only one small piece of the equation. Today we see a large amount of phone rooms coming to Panama. These are usually not new jobs being created; they are jobs moving to Panama from other countries. These jobs are generally customer service jobs, support jobs and soft sales jobs where the salesperson offers more explanation than sales pressure. The companies tend to save in many ways enabling them to be competitive and offer a competitive level of service to their customers. Of course the effect of companies moving from the large North American and Western European countries is damaging to say the least to those economies they are departing from.
Privacy Concerns – Let us look at some of the reasons why people move their assets to an offshore tax haven that is also a privacy haven like Panama.
Tax Haven Status – These people already under the burden of taxation from many of their home countries do not want additional tax burdens. Contrary to popular belief most of the money moving offshore has already been taxed by the various home countries and if there are additional taxes it would be too burdensome. They want to be free of additional taxes.
Privacy – People like to be as private as possible in their financial affairs. How many of you would stroll through any major city of the world today openly displaying a solid gold Rolex full of diamonds along with a nice large diamond ring? Not too many! Why? Because you do not want to run the risk of becoming a victim of robbery or assault. So what do you think is different about having expensive real estate in your own name, boats, planes, bank accounts etc? Nothing is different. People with large amounts of assets are a target and they have every right to keep there financial affairs as private as possible and in many countries it is essential to their health.
Kidnapping – In many countries kidnapping victims are selected based on real estate holdings. The advantages to putting real estate in the name of an anonymous Panama bearer share corporation are obvious. When people look up the real estate they can not tell who the natural persons are behind the corporation that owns the real estate. In Panama the owners of the stock of a bearer share corporation do not appear in any public registry or database. When it comes time to sell the real estate the corporation that owns the real estate is sold, not the real estate. This prevents would be kidnappers from following real estate sales reports to look for potential victims thus protecting the subsequent owner. The same applies to the ownership of a yacht or an airplane. Another popular method of determining who is a good kidnapping victim is to have a bank employee on the payroll who scours through the files at the bank finding wealthy people for you. If you live in one country and bank say in Panama this doesn’t work very well since the kidnappers would need to cultivate bank employees in Panama who could isolate victims for them in their own country. This narrows the field quite a bit especially when you take into account that in Panama a bank employee is risking a felony to violate bank secrecy which is far from the case in many other countries that routinely complain about bank secrecy and offshore jurisdictions.
Identity Theft – Of course the prime identity theft target is one who has wealth and thus is capable of carrying large amounts of credit. With generally non existent bank privacy let alone secrecy in many countries scoundrels are free to roam through credit reports with bank details, credit card details etc and plan a devastating identity theft attack. These crooks even order private detective reports on their victims to really learn as much as they can about them. Of course the public records databases are all too accommodating providing details like drivers license records, who owns the loan on their house, cars, boats etc, what credit cards they have and so forth. Credit bureau secrecy is non-existent as evidenced by the vast amount of identity theft and credit card fraud. Offshore banks in Panama and other offshore privacy jurisdictions due to bank secrecy do not report to any credit bureaus. If you do not need credit why have regular credit cards. Use offshore bank debit cards that just sweep the money directly out of your bank account and thus you stay private with how much you spend and how much credit you have not appearing in any credit reports. The history of your purchases would also be immensely harder for say a private detective to get from an offshore bank; they seem to have no trouble getting this date from regular banks in many countries.
Frivolous Litigation – In many countries lawyer can operate on contingency and like to sue those who have deep pockets. The best way to see how deep persons pockets are is to run an asset check on them. If their assets are all private like they bank in bank secrecy jurisdictions like Panama, have real estate owned by anonymous Panama Foundations or anonymous Panama Corporations then the asset check will come back low on assets, probably too low to invest a lot of time and money in frivolous litigation. This also keeps the persons assets free of pre-trial attachment which is a favorite trick of unethical attorneys that is allowed in most of these non-privacy jurisdictions.
Privacy – Some people just want to keep their affairs private and they should be able to do just that.
For more information, please visit:
http://www.panamalaw.org
email at: panamalegal@hush.com
