Tax havens today

TA X

H AVENS

TODAY

The Benefits and Pitfalls of

Banking and Investing Offshore

HOYT BARBER

John Wiley & Sons, Inc.

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Copyright © 2007 by Hoyt Barber. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data

Barber, Hoyt L.

Tax havens today : the benefits and pitfalls of banking and investing offshore / Hoyt

Barber.

p. cm.

Includes bibliographical references.

ISBN-13: 978-0-470-05123-8 (cloth)

ISBN-10: 0-470-05123-X (cloth)

1. Tax havens. 2. Tax planning—United States. 3. Tax planning—Canada. 4. Tax

planning—Great Britain. I. Title.

K4464.5.B373 2006

343.05'23—dc22

2006030739

Printed in the United States of America.

10 9 8 7 6 5 4 3 2 1

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“To the hunted, not the hunter;

to the passage, not the path.”

Special dedication to my friend,

the late Manuel G. Espinosa, Esquire,

a true gentleman and a scholar.

Also, in memory of Harry Browne,

fellow author, economist, freedom fighter.

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CONTENTS

Preface ix

PART ONE THE OFFSHORE CONTROVERSY 1

1. Why Are so Many People Going Offshore? 3

2. Whipping the Taxpayers into Shape 7

3. The Big Squeeze 10

4. The Changing World of Tax Havens 15

5. The International Dragnet 18

6. The Global Laundromat 21

7. The Tax Police 23

8. Barbarians at the Gate 26

PART TWO BUILDING A SOLID OFFSHORE

FINANCIAL FORTRESS 31

9. The Benefits of Going Offshore 33

10. Best Strategies for Going Offshore: Personal and

Financial Lifestyle Changes 35

11. Expatriating 37

12. The $80,000 Annual Loophole 39

13. New Citizenship and Renouncing Your U.S. Citizenship 42

14. Eight Ways to Sunday 44

15. T-7 Tax Havens: The Green List of the World’s Best

Offshore Havens 48

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16. Selecting the Best Tax Haven for Your Plans 54

17. Establishing an Offshore Presence without Leaving Home 61

18. Offshore Business Structures 63

19. Secrets of Offshore Banking 73

20. Offshore Financial and Investment Strategies 81

21. Offshore Estate Planning 89

22. The Swiss Angle 97

23. Placing Your Assets Offshore and Avoiding

Fraudulent Transfers 105

24. Offshore Business 107

25. International Tax Planning 110

26. Offshore Privacy 117

27. Offshore Caveat 119

PART THREE TODAY’S TAX HAVENS 121

28. Tax Information Exchange Agreements 127

29. Mutual Legal Assistance Treaty 129

30. Profiles of Tax Havens 131

Andorra, 131

Anguilla, 133

Antigua and Barbuda, 135

Aruba, 136

Austria, 138

The Bahamas, 140

Bahrain, 143

Barbados, 143

Belize, 146

Bermuda, 147

British Virgin Islands, 151

Brunei Darussalam, 154

Campione (Italy), 155

Cayman Islands, 158

Channel Islands—Guernsey,

162

Channel Islands—Jersey, 166

Cook Islands, 171

Cyprus, 173

Dubai, United Arab Emirates,

177

Gibraltar, 179

Grenada, 182

Hong Kong, China, 183

Isle of Man, 187

Labuan, Malaysia, 192

v i CONTENTS

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PART FOUR RESOURCES—THE BIG PICTURE 237

Offshore Citizenship and Retirement Opportunities 239

Dominica 239

Saint Kitts and Nevis 240

Profiles of Retirement Havens and Foreign Residency: Andorra,

Argentina, Austria, The Bahamas, Belize, Bolivia, Brazil,

Campione (Italy), Canada, Chile, Costa Rica, Czech Republic,

Dominica, Dominican Republic, Ecuador, Guatemala,

Hong Kong, Ireland, Italy, Malta, Monaco, The Netherlands,

Panama, Portugal, Saint Kitts and Nevis, Switzerland,

Turks and Caicos, United Kingdom, Uruguay 241

More Countries to Investigate 254

Travel Destinations 263

Offshore Reading 264

Offshore Reference Works 264

Newsletters 265

Travel Books 267

Travel Bookstores and Map Dealers 267

Travel Information 267

Financial Information and Business Opportunities 268

Bank Resources 269

Antisurveillance and Privacy Sources 269

Books of Interest 270

Publishers of Unusual Books and Hard-to-Find Information 271

Periodicals 272

Real Estate 272

Liechtenstein, 194

Luxembourg, 197

Madeira, 200

Malta, 202

Mauritius, 206

Monaco, 209

The Netherlands, 211

The Netherlands Antilles, 214

Panama, 217

Saint Kitts and Nevis, 220

Saint Vincent and

the Grenadines, 221

Seychelles, 224

Switzerland, 225

Turks and Caicos, 229

Vanuatu, 231

Western Samoa, 235

CONTENTS vii

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Expat Information 272

Expat Books 273

Retirement Resources 273

Health Insurance for Expatriates and Travelers 273

Organizations 274

Government Web Sites 275

Financial and Investment Services 275

Immigration Services 279

Tax Problems 280

Worldwide Serviced Offices 280

Global Mail Drops 281

International English Language Newspapers 281

Online Resources 281

Government Publications 281

Offshore Dossier 281

Offshore Evaluation Service 282

Offshore Financial Services 282

Appendix 283

About the Author 316

Index 317

viii CONTENTS

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PREFACE

Fifteen years have passed since I wrote a book on the subject of

tax havens and offshore banking and investing. The year was

1992 and I was writing Tax Havens: How to Bank, Invest and Do

Business Offshore and Tax Free for McGraw-Hill in New York. There

weren’t too many good books out on the subject, and I felt the timing

was good for a book on these themes.

Offshore has transformed a lot since then, and many people have

discovered, often recklessly, that there are pitfalls to avoid that could

cause financial loss and even jail time. The more I thought about it,

the more I liked the idea of a new book. But, I decided it couldn’t be

treated in the same way as last time, and that this time might be my

last good opportunity to share what I know and what I have drawn

from personal experience. So I would have to make it a real tour de

force—the “Offshore Bible”—a single place where readers can find all

the information they need on the topic, including reliable answers

and important connections.

A new book of this nature seems more urgent with each passing

day. National and world events are playing havoc with our personal

sovereignty and freedoms. I hadn’t planned to write this book, but it

came to me overnight, and I realized that I could provide a valuable

tool for Americans, and others, to get a quick lesson in alternative fi￾nancial solutions and thereby increase their investment choices. Okay,

I decided that I would write it. But it would have to be more than just

another offshore book.

Since my first tax haven book was published, dozens of related ti￾tles have come and gone. Amazingly, mine stayed in print and re￾mained on the market for a full decade. From my time in the business

and from fresh new research, I realized there was huge public interest

in these topics, and little material was getting out that was truly accu￾rate and reliable. As for the Internet, the stuff found there is often en￾tirely questionable and sometimes clean off the map.

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The result: I have the pleasure of bringing you Tax Havens Today:

The Benefits and Pitfalls of Banking and Investing Offshore. I have to give

credit to my publisher, John Wiley & Sons, Inc., and specifically to my

senior editor, Mr. David Pugh, who took a personal interest in this

project, and who had the vision to recognize the timeliness, and need

for a book on the topic, and indeed, one with deeper themes than the

mere subject of tax havens.

Tax Havens Today is designed for easy use. In Part One: “The Off￾shore Controversy,” you will find up-to-date information on the state

of the offshore world, against the backdrop of current world events.

Changes have occurred rapidly in this business in just the past few

years, and more changes are coming. It is important to know what to

expect so that you can avoid the pitfalls while implementing your plan

of attack. After all, that is what it is all about today—the barbarians

are standing at the gate, right now.

Part Two: “Building a Solid Offshore Financial Fortress” includes

the reasons the offshore angle may be your best choice of methodology

and defense, and it will provide you with valuable hands-on informa￾tion and strategies for going offshore. There is a diverse selection of

offshore banking and investment options to accommodate any investor

and any set of goals as well as tax-planning ideas to provide inspira￾tion. You will learn how to reduce taxes, defer taxes, and invest tax￾free while protecting your assets and planning your estate, meanwhile

staying out of the reach of creditors and growing confiscatory govern￾ment practices. In Part Two, you will also learn how you and your

spouse can earn up to $160,000 a year tax-free simply by relocating.

Part Three: “Today’s Tax Havens” gives you an accurate picture of

the advantages and drawbacks of 40 important tax havens. Twelve cat￾egories of information are provided so that you can make an intelli￾gent decision on the best tax haven for you and your purposes. And,

that is not all. This book contains over 500 contacts, including names,

addresses, telephone, fax, e-mail addresses, and web sites of the most

important investment, banking, and financial advisors in the world.

These are organized by tax haven or other jurisdiction, and a brief de￾scription of their areas of expertise is included. After reading this

book, no matter what questions you may have, an authority on the sub￾ject is just a phone call or e-mail away.

Part Four: “Resources—The Big Picture” provides contacts for

developing new financial plans and includes other information

sources to help you further pursue the concepts presented in this

book, including exploration of tax-advantaged offshore retirement

x PREFACE

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havens, and other countries, with strong appeal to aspiring investors

and expatriates.

Ninety-five countries are profiled in Part Four as possible alterna￾tive places to live or retire. Thirty-one countries where you can secure

residency and possibly naturalization are covered in detail, along

with two very attractive Economic Citizenship Programs where you

can get a second citizenship and passport just by writing a check.

These countries are also reviewed with taxation in mind, as well as

their individual and unique benefits. Then, an additional sixty-two

countries are included where you can possibly live as an expatriate,

either temporarily or permanently.

Now, does it sound like I left anything out? That’s it, all rolled

into one tight package. I believe you will find herein everything

you need to get started on your road to reducing taxes, protecting as￾sets, increasing your profits, and living a better life. And, as I un￾cover more opportunities, I’ll gladly share them with you. Just send

me your name and e-mail address, and I’ll make sure you get my

latest take on what’s happening offshore—and elsewhere. You may

e-mail me direct at [email protected] or to my office at

[email protected].

One last thought before I leave you to explore your new options.

You have already contributed to some important causes by the mere

action of looking into this topic: yourself, your family and a brighter

future. And I believe in more action and less talk: In that spirit I de￾cided while writing this book to contribute my royalties to a worthy

organization known as DownsizeDC.org. It is a nonprofit organization

co-founded by one of my long-time (since 1970) favorite investment

writers and philosophers, Harry Browne and his associate, Jim Babka.

Among a world of other things, Harry Browne was the 1996 and 2000

libertarian presidential candidate. When I heard the news while writ￾ing this book that Harry Browne had passed away, I was compelled to

make my contribution to reducing bureaucracy. As they say, I may be

a day late and a dollar short, but if enough people in this country re￾ally want to make an impact, then we can make a difference, and

there is truly no time like the present. I hope this book will inspire

others, the way Harry Browne and others have inspired me. For more

information on DownsizeDC.org, please refer to Part Four.

Best of luck as you make your way through these pages. Only you

hold the key to your future. Let me know how you fare on your voyage

to a better, richer, and more independent tomorrow.

HOYT BARBER

PREFACE x i

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PA R T O N E

The Offshore Controversy

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