Tue, Apr 15, 2014
Subject: Top 7 Ways To Go OffShore 2014
And the money trail leads to…
From Mark Nestmann, Nestman.com
Foreign banks, brokers, and trust companies are falling head over heels in their rush to get rid of as many U.S. clients as possible.
It's no surprise why, either. Federal laws like the Foreign Account Tax Compliance Act (FATCA) have literally made Americans financial outcasts worldwide. It's far easier for foreign firms to fire their U.S. clients than to try to comply with ever-increasing demands from the IRS and other three-letter agencies.
If you've ever wondered why laws like FATCA exist, the answer is more elusive than you might think. Contrary to what Obama and his friends at the IRS are telling you, it has nothing to do with collecting taxes. In fact, official government estimates for FATCA say it will bring in less than $800 million annually in new revenues. That's about two tenths of 1% of the $3.9 trillion budget for 2013.
The real answer is a case of "follow the money."
Wall Street and big U.S. banks don’t want overseas competition. This gives them a huge incentive to promote laws that restrict the investment choices available to Americans to "U.S. only."
In the case of FATCA, this just might backfire on the banks.
But there are numerous lesser-known examples that have been highly successful at eliminating foreign competition to the Wall Street, Big Bank financial elite.
A case in point is the Dodd-Frank Act. Wall Street was officially horrified by this law, which officially sought to end some of the practices that led to the financial collapse and big bailouts of leading U.S. investment firms in 2008-2009. But buried in the bowels of this 2,319-page law was a provision targeted squarely at "foreign investment managers."
Simply put, the new rule forced every foreign bank, brokerage, or financial advisor with 15 more U.S. clients to register with the Securities & Exchange Commission. This is an expensive and time-consuming exercise that involves oodles of red tape. One Swiss-based investment manager who went through the process told me he spent more than $100,000 in legal fees to do it – not to mention the hundreds of hours he and his staff spent filling out forms and talking to lawyers and SEC bureaucrats.
As we're now finding out, many foreign firms won’t bother, and as a result, our ability to use safer, more stable and potentially more lucrative options offshore is reduced.
In a sense, it's just another example of the government telling you what you can and cannot do. In this case, though, instead of directly coming out and saying it (which would make them look bad), they're making it nearly impossible to use the services of the people who would protect you from our inherently predatory system.
Now, granted, I can't prove that Wall Street teamed up with Congress to slip this new rule into the Dodd-Frank Act. But what I can say is that we're getting the raw end of the stick.
Americans have stuffed trillions of dollars into U.S. brokerage accounts. Most of them offer only U.S. securities. The only non-U.S. securities offered to their clients are those traded on U.S. exchanges: the generally less liquid (and thus less desirable) "American Depository Receipts," or even worse, so-called "Pink Sheet" listings. As a result, we're missing out on the best growth the world has to offer.
What's worse is that many of these firms have language in their customer agreements allowing them to use your money to help back their own high-risk investments. How’s that for a fair shake?
And we all know how well that can turn out: M.F. Global was the perfect textbook example.
This is the reason why it's so important to get some cash outside the U.S. financial system. With Wall Street – and specifically the Big Banks – in bed with Washington, I'll bet you a Benjamin that they aren't going out of their way to protect your interests.
They'll protect theirs. You should do the same.
Other articles you might like to read:
No Statute of Limitations for Failing to File U.S. Tax Returns
The One Place They Can’t “Bail In”
~~My 7 Favorite Ways to Go Offshore in ‘14
From Mark Nestmann, Nestman.com
Imagine you’re cruising down the highway, top down, your favorite song on the radio. Then you notice the blinking lights behind you. You get pulled over for doing 80 in a 65 mph zone.
The officer asks permission to search your vehicle with his police dog. You consent. After all, you have nothing to hide. But there is a wad of cash – maybe money you’ve just taken out of the bank – in your glove compartment. And the sniffer dog alerts his officer that there’s a trace of cocaine residue on some of the bills.
Of course, it’s not from you. Who knows where those filthy dollars have been? But it’s enough for the officer to remove your own cash from your possession in an act of “civil forfeiture.”
"Civil forfeiture" is a legal procedure in which police can seize your property without accusing – much less convicting – you of any crime. The civil forfeiture racket raises billions of dollars for federal, state, and local governments every year. And its spread throughout the US legal system is one of the very best reasons I know to diversify your assets internationally.
Civil forfeiture advocates justify the practice because it supposedly strips drug kingpins and other criminals of their ill-gotten gains. But, in almost all cases, the seizing agency gets to keep the money it confiscates, creating a bounty hunter mentality throughout every layer of the law enforcement system.
For this reason, civil forfeiture laws are especially popular with cash-strapped police agencies. And predictably, such “policing for profit” has led to horrific abuses.
Voters in a few states have tried to reign in civil forfeiture laws. For instance, a 2000 ballot initiative in Utah forced cops to turn over forfeited property to the state, rather than keeping it for themselves. Civil forfeitures plummeted, and one county prosecutor admitted, "Doing forfeitures is way down the line in my priorities."
If civil forfeiture exists only to separate criminals from their ill-gotten gains, wouldn’t you expect police to not care who gets the money? Well, that’s not how it works in the real world.
Quietly, unanimously, and with no debate, legislators in Utah recently “recodified” the state’s civil forfeiture laws. The new law guts all the important protections voters approved in 2000.
Policing for profit is back in Utah. No doubt that makes Utah cops and prosecutors happy.
It also means Utah residents – and anyone travelling or doing business there – are vulnerable. You can expect cases like that of Emiliano Gomez Gonzolez, who had the misfortune of being stopped by cops in Nebraska – a state where police get to keep what they seize. State troopers found bundles of currency totaling $124,700 in his car.
Police seized all the money, alleging that it was the proceeds of drug trafficking. Gonzolez tried to get it back in court but lost his case, despite the fact that police found no drugs, drug paraphernalia, or drug records connected to the cash. Nor was he ever accused of any crime. And the Nebraska cops kept it all, less a 20% commission paid to the feds for their assistance in prosecuting the case.
If that’s the shape of things to come, you can only imagine what other nasty things lie just around the corner – making it a little harder for you to keep what’s rightfully yours.
As you’ll no doubt guess, my preferred solution lies offshore. Here are just seven of my favorite ways to “go international” in 2014…
1. Get an offshore bank account: Yes, it’s gotten harder, but it’s not impossible. In fact, we’re currently working with three offshore banks with low account minimums that allow Americans to set up accounts without an on-site visit and, in one case, electronically. And while some countries will enforce US civil forfeiture orders, these agreements all require proof of some actual underlying criminal conduct. For this reason, an offshore account is one of the best ways to avoid “policing for profit.” (Offshore Freedom Inner Circle members are welcome to contact our member services team to get a referral. Not yet a member? Click here to fix that in the next two minutes.)
2. Create a truly private offshore “stash.” You’re legally required to tell Uncle Sam about your offshore bank accounts, but there are other international investments you can still hold privately. For instance, offshore real estate can still be a non-reportable investment. And it’s obviously beyond the reach of the domestic “forfeiture squads.” If you care about your privacy, move some of your wealth offshore into such a non-reportable asset.
3. Consider a legal residence offshore: It takes a bit of time, but it’s easy to do with the right help. Best of all, there are multiple jurisdictions – within a short flight of most places in North America – that offer great get-out-of-Dodge options without the need to actually reside in the country or pay any non-locally earned tax.
4. Put that second passport on your early Christmas wish list: For the ultimate insurance policy, consider a second citizenship and the passport that comes along with it. But if you want to wrap it up before the end of the year, now’s the time to get started. The reputable (i.e., legitimate) economic citizenship programs take anywhere from six to nine months from start to finish.
5. Go “radio silent”: Make it harder for those three-letter agencies to follow you around by going “dark.” That means finding a reputable virtual private network (VPN) provider that will help you travel around the Internet with no one (spook, criminal, etc.) looking over your shoulder. As always, my preferred source is Cryptohippie, run by my friend Paul Rosenberg.
6. Protect your online email privacy: That starts by keeping your stored emails out of the US. The Offshore Freedom Inner Circle runs such a service for our clients that is based in Zurich, Switzerland, but any non-US service with reasonable security precautions will do. As always, do your research. As amazing as it might sound, there are plenty of so-called “offshore service providers” that ultimately rely on US-based services, such as the Amazon cloud.
7. Earn as much as $100,000 offshore each year, tax-free. This is possible thanks to a little-known section of the US Tax Code. There is a catch: You have to actually live offshore to take advantage of this law, and only income from wages or employment qualifies – not passive income. But if you comply with the rules, this is a great way to get yourself – and your income – out of the US legally tax-free.
While other New Year’s resolutions fall by the wayside, your decision to go offshore and protect what’s rightfully yours need not. And remember, I’ll be with you all along the way.
Tags: american depository receipts, and the money trail leads to, Dodd-Frank Act, Economic Collapse, fatca, Financial Collapse, foreign account tax compliance act, m f global, mark nestmann, MF Global, nestman.com, off shore banking, offshore banking, tax reforms