Kindly note that prior to incorporating a company targeted to providing services in Foreign Exchange, the following procedures would apply:

Seychelles is an interesting jurisdiction, plus we have banking options in Mauritius as well.  Seychelles, in its attempt to offer all things to all people has come out with a whole smorgasbord of competitive options include a new foundation law, a mutual fund law and an alternative to the IBC known as the CSL which is a regulated and lightly taxed corporate vehicle that could benefit from the growing number of double taxation treaties the country has signed with the likes of China, Indonesia etc.

In its attempt to become the financial hub of the Indian Ocean it has concluded more double taxation treaties than any other offshore financial center.  Some view this as a negative, while others put a very positive spin on this as Seychelles is not even on the OECD list as you will notice because it had already signed the minimum viewed as necessary to avoid being on the list in the first place.  Panama may be cautiously treading in the Seychelles direction pursuing double taxation agreements which can be far more advantageous then simply becoming tax collectors for the bloated welfare states of Europe, America etc.

More information on this can be seen at http://www.chinaeconomicreview.com/cer/2010_02/Two-way_street.html.

For more information on our Seychelles incorporation options go to our Seychelles IBC page or contact us with questions.

St. Lucia: We have an excellent banking option here with one of the largest banks in the Caribbean region. They offer many more currencies than any other Caribbean bank we know of. However, it is not available for U.S. persons.  St. Lucia has signed a few TIA’s with mostly smaller countries as has St. Vincent.  They also are a good alternative to St. Vincent for establishing a Private Fund since such a fund in St. Lucia can have up to 100 clients.  The normal in most other jurisdictions for this cost effective licensed fund option is 50 and instead of $100,000 being the minimum investment they lowered the bar to $50,000, lower than any other jurisdiction we know of.  St. Lucia was a latecomer to become an offshore center but has implemented its own version of the financial and legal ordinance platforms that characterize St. Vincent.

Please contact us if you have any questions about banking in Saint Lucia.

Continued at Seychelles – OECD Tax Sharing Treaty Update, part 7 of 7.

St. Vincent: We continue to offer a St. Vincent bank account opening option.  Unfortunately, they are quite slow but there is flexibility if no bank reference letter available. St. Vincent, in common with the other Caribbean nations has signed a number of tax information treaties, with mostly the same countries that others like Nevis and Antigua have. However, despite that there is a lot to recommend about St. Vincent.

We also recommend its licensed private investment fund option for those that want a cost effective venue to establish a regulated Private Fund without having to pay a small fortune in ongoing administration fees as is the case with more well known jurisdictions such as BVI, Caymans and Anguilla. A Private Fund can accept up to 50 investors investing a minimum of $100,000 each and no independent third party administrator is required. An annual audit is required and each investor must be registered with the Registrar. (An investor of course is more often than not an IBC, foundation or trust that most investors will choose to use as investment vehicles rather than their own names).

Our complete fee for the Fund set up is $12,500 and annual fees start at around $6000 per annum. It is a small amount to pay for creating an environment of credibility and safety in the minds of your prospective investors.  Contact us to learn more about the other options that  Saint Vincent offers.

Continued in part 6 of 7, St. Lucia – OECD Tax Sharing Treaty Update.

Hong Kong:  Absolutely the best option out there that we know of for a multi-currency (10 different) corporate account with internet banking with one of the largest banks in the world in one of the world’s premier and largest offshore banking jurisdictions.  Their business integrated accounts combine  efficient low cost online multi-currency banking with a sophisticated online trading platform for securities in multiple markets and forex.  No physical presence and even no bank or reference letters required under this program! Only US$700 is needed for the minimum account opening balance. Bank account opening accomplished within 3 business days and requires the formation of an HK Private Limited Company which can be joined to a Panama foundation and with the use of a nominee director can give you the best of all worlds – anonymity and privacy without having to sacrifice service and pay high fees. One of the most hassle-free bank account opening options we know of unless you are already an HSBC premier customer in another country.  Even then you will find it possible only to open a personal account in Hong Kong through your local branch’s international department and expect it to take weeks and probably months.

The simple requirement is to take your account opening paperwork which will be provided to you, along with your passport and utility bill and have your signature and documents witnessed by an HSBC bank officer in any branch anywhere in the world. That’s all there is to it along with the submission of a simple 2 page business plan according to a pre-approved format we will provide you with.

Hong Kong has an incredibly sophisticated financial services sector with over 160 major banks established there, who are liquid and robust.  Couple that with fact that China owns Hong Kong and will not be pushed around by the OECD countries means that there will probably never be any tax treaties on the horizon with the rest of the world.  Also all deposits in the territory are 100% covered by deposit insurance. Banking secrecy while not enshrined into law like Panama’s and therefore not as robust is still adequate and respected.  We can’t recommend it enough which is why we have moved much of our own business banking to the territory. For more information on our Hong Kong incorporation and banking packages go to our Hong Kong Corporation page.

To continue reading, see St. Vincent Company – OECD Tax Sharing Treaty Update, Part 5 of 7.

Belize:  this country and its banks are still very much open for business.  Unfortunately, Belize has just signed a Tax Information Sharing Agreement with the U.K.  in common, we might add, with every other Caribbean tax haven.  Overall, the common strategy with all the Caribbean havens is to reach the magic number of 12 treaties “mandated by the OECD , with mostly smaller European countries such as the Scandinavian countries, Iceland, Faroe Islands and countries like New Zealand, which will then make it considered a jurisdiction no longer on the “grey list” but on the “white”.  What is interesting is that they have all avoided signing agreements with the U.S. and Canada, their biggest client source market by far and the ones most likely to be sending the highest volume of exchange requests.

We now have a bank in Belize that will open accounts in just two business days which includes the incorporation of a Belize IBC, if desired, in the same time frame!  Also no bank reference letter required since many banks will not provide these letters. Last three statements will be asked for instead.

Belize also has in our view the best licensing regime for those that want to license an international securities / forex brokerage firm and/or investment consulting / management business.

To continue reading, see Hong Kong Company – OECD Tax Sharing Treaty Update, Part 4 of 7.

Panama:  we have cemented a new banking relationship in Panama that will allow our clients the ability to open bank accounts without having to travel to Panama.  The requirements are quite strict compared to many other countries but if you want the best banking privacy likely to remain intact this may be a good option.

It is becoming increasingly hard for foreigners to open bank accounts in Panama, especially without visiting first, because of the Superintendant of Banking’s compliance crack down to make sure that the banks have a rigorous “know your customer” policy in place.  In part this is a governmental reaction to the fact that they do not intend to be signing any one sided tax information sharing treaties, so the banks have been told to keep an extra clean house by the government.  Panama’s policy is to only sign selective and advantageous double tax sharing agreements with countries where there are mutual business interests and advantages to both sides to do so.

There are going to be no one-sided agreements, which is the problem with the normal Tax Information Sharing agreements.  Also, the burden of proof to show that a fiscal crime has taken place is quite exacting.  This is designed to prevent the “fishing expeditions” that would otherwise be the end result.  Panama and Mexico have signed such a treaty with more in the works with Italy, Belgium and Spain.  Expect Panama to do as little as minimally possible and avoid putting anything in place with the U.S. or Canada, while at the same time possibly causing local banks to react by be overly cautious due to heightened compliance and inspections by the Superintendant of Banking’s  office.  For more information on banking in Panama, see our Offshore Banking in Panama page.

Of course our advice is to put in place structures that do not raise any compliance/reporting issues so that one does not need to be concerned about any possibility of a future tax treaty.  For many, depending on your country of residence, this may need to include not having any exposure either as a beneficial owner, nor a director, shareholder nor other principal /manager of the company and/or foundation.  Therefore using an offshore foundation designated as a family or charitable private interest foundation that then owns one or more companies with everything managed by competent third parties is what we have recommended for years. Our Foundation page  is helpful for more information on that topic, found here: http://www.offshore-protection.com/ibc-foundation.html.  For a completely managed offshore structure see this page:  http://www.offshore-protection.com/international-fiduciary-structure.html.

In the following days and weeks, we will be posting our updates on this topic for the following jurisdictions: Panama, Belize, Hong Kong, St. Vincent, St. Lucia, and the Seychelles.   If you have questions, please contact us here.

For Part 2 of 7, see Panama – OECD Tax Sharing Treaty Update.

For U.S. taxpayers this is probably one of the few and best loopholes to take advantage of.  The Obama administration has recently abandoned its plans to go after overseas corporate income.  Current tax code allows US corporations to defer paying taxes on income earned overseas until that money is repatriated to the United States.  Obama wanted to change this law, but has recently abandoned his plans.
Entrepreneurs with overseas income can greatly benefit from this tax rule.  With a properly planned business structure, businesses can defer paying taxes on overseas income, indefinitely, until the funds are brought back to the US.  The same rules apply if you are a taxpayer from any other country of the world that we know of where income derived from overseas operations can remain tax free until repatriated.  The reason why the U.S. government backed down on this is that US companies forecasted another round of deep job cuts if the tax hike were passed, citing the fact that companies from other countries enjoy these same tax benefits, and it would put them at a severe competitive disadvantage were they to be put in place.

For U.S. taxpayers there are still some reporting requirements involved if you have an ownership interest in the business in excess of 50% so we recommend forming a foundation to place the shares into, and for the foundation beneficiary to be someone other than yourself and family members.  Also there are much more complicated and cumbersome rules if some of the business income is derived from passive investment sources. More guidance on this strategy can be found in our IBC/Panama combination section.

If you are ready to go global, all that needs to be done is to choose one of our quick and easy offshore corporation and banking packages and you can be ready to start operations in as little as two or three weeks. In the event of an audit the tax authorities in some countries like the U.S. and Canada may require actual proof of a physical office structure as well as other domiciliation documents as evidence, such as a company utility bill, although an offshore virtual office arrangement ill usually suffice for most uses. In the case of internet businesses web hosting should be contracted for overseas and anything else that would show a domestic connection on the website should be as far as possible avoided.  See our offshore E-Commerce solutions page for information specific to setting up a global e-commerce related business in an overseas location.