Pay zero taxes legally.
Once outside your home country as a non-resident
and without visible assets, you pay no more
taxes.
Considerable thought to "doing it right" must go
into the implementation. Lawyers and accountants
want to keep you around forever paying their
annual retainers. I try to get people off on
their own, conducting their business affairs in
complete privacy. That is why I do not usually
recommend setting up trusts, foundations, holding
companies and any such structures requiring:
- Involvement of others who really shouldn't
know your business.
- Unnecessary overhead, legal registration and
annual tax charges.
Offshore corporations and such are mostly
worthwhile only where an active business is
involved and there is no better way to get a
regular cash flow of royalties, commissions or
interest out of a given country without paying
withholding taxes. We regard setting up such
legal entities only as a last resort. The
exception to this is when you work with someone
who lets you run the show, who does not want to
get any signing powers or a say in your business
and who shares our view that the more you can do
yourself, the better. Most offshore advisers will
milk you every year with hefty annual fees and
charges.
Usually, offshore centers are rich in crooked
"corporation mills" that churn out steep bills
but do not care about you or your business. many
Americans, for example, do not realise that there
is nothing illegal about transfering all their
shares of stock, cash or other assets to a
custodian bank based abroad. Even real estate may
be transferred to a foreign based corporation.
British based corporations cost only a nominal
sum to establish and run. It used to be the rule
that if they did no business in the U.K., they
were tax-exempt in Britain, a rule that was
lifted in 1988. Now, all U.K. companies have to
file and pay British taxes regardless of where
their source of income may be. Neighbouring
Ireland was swift to take advantage of the new
British rules. When Britain closed down
tax-exempt companies, the Republic of Ireland
passed legislation allowing for tax free Irish
non-resident companies. If no directors live in
Ireland and all source of income comes from
outside Ireland, then the Irish company does not
pay tax at all.
There are no restrictions on the freeflow of
capital in and out of the U.S.A at the present
time. This freedom to transfer assets abroad
exists in most of Europe, Japan and the "free
world". Reporting requirements are a different
matter. For instance: if you cross the USA
borders in either direction with cash, amounts of
around 5,000 US dollars are supposed to be
reported. If you are searched by customs
officials, and are carrying undeclared cash, it
may be confiscated. But if you carry cash or
checks abroad, as to tax-paid, legally earned
money, you can take 100 billion US dollars - as
long as you report it at the time you cross the
borders. We hear that many US customs officials
at many border points do not have the proper
report forms. They tell the traveller who asks
for them to "forget about it". Thus, as is
typical with governments, Big Brother's iron fist
is often rendered impotent by bureaucratic
bungling under an avalanche of information and
forms. They are brought together only if you do
something "high-profile" to trigger a look at
your affairs.
If you are after a "secret account", this is
sometimes referred to by the euphemism "offshore
account" is that to keep it a secret from your
potential enemies (creditors and tax collectors)
ir must be kept secret from everyone. Generally,
a stranger you meet at a bar isn't the person who
turns you in to a tax collector or otherwise
blows the whistle on you. Besides Big Brother,
your potential enemies include your spouse,
lover(s), your business associates or partners,
your own kids. These days you must add to the
list of potential informers against you, your
accountant or lawyer. Your accountant, lawyer,
stockbroker or local banker in many
jurisdictions, particularly the USA, is
personally liable for criminal prosecution if he
has knowledge of any concealment of assets, tax
frauds, or other peccadilloes; if your hired
hands don't turn you in they may be breaking the
law.
New regulations make these profesionals in your
home country little more than government agents.
They act like Deputy Sheriffs. If you don't want
sheriff Big Brother to know exactly what you are
doing then for heaven's sake, don't tell the
Deputy Sheriff. These profesionals are not on
your side. Because of laws that will take away
their licenses, livlihood and possibly their
freedom, they have been co-opted. They are now in
the enemy camp. As such, accountants and lawyers
are the last persons you should trust with
sensitive information or from whom you seek
advise on "offshore matters". Bottom line? You
must now establish your secret offshore accounts
or secret asset stashes without telling anyone in
your home country, and especially without telling
anyone in the above catagories.
