| There are more offshore banking havens than | | | | rights. |
| you can shake astick at. Nicholas Pullen | | | | |
| tells you how to separate thewheat from the | | | | 6. Is Your Haven Financially Stable? |
| chaff, and make sure the haven you choose | | | | |
| isreally a safe-house for your money. | | | | Check your prospective haven's financial |
| | | | stability, bycalculating what percentage of |
| There are definite and strong advantages to | | | | its Gross Domestic Product isrepresented by |
| placing some ofyour hard-earned money in | | | | foreign aid. Foreign aid is as high as 70% of |
| offshore bank accounts: | | | | |
| | | | Gross Domestic Product in some havens. The |
| First of all you get protection against your | | | | Cook Islands, |
| government. | | | | |
| | | | Nauru and Vanuatu being recent examples of |
| Nobody knows what a government will do next, | | | | this. |
| anything ispossible. But, unlike funds held | | | | |
| in your home country,wealth stashed offshore | | | | A haven's confidence in its liquidity can be |
| is greatly protected against anynegative | | | | judged, atleast to some degree, by its |
| actions your government might take, or | | | | willingness to put in placesolid depositor |
| legislationit might introduce, tomorrow. | | | | protection. Enquire of financialinstitutions |
| | | | in the haven whether or not |
| Secondly, you get protection from predators | | | | depositorprotection exists. |
| and parasites. | | | | |
| | | | 7. Is The Haven Free Of Trouble? Will It Stay |
| Offshore wealth is shielded from the | | | | That Way? |
| attentions of assethunters. Avaricious | | | | |
| litigants, thieves, fraudsters, | | | | Does the haven have a trouble-free history |
| conmen,blackmailers (disgruntled ex-business | | | | and a secureculture? A country which has |
| partners and ex-spouses) who all seek to | | | | experienced only moderatepolitical, economic |
| pinpoint, target and eventuallyattack | | | | and social change, and where politicaland |
| individuals with visible wealth. These sharks | | | | social violence is uncommon, is a |
| haveweapons at their disposal, and they use | | | | trouble-free country. |
| them. They routinelyrun asset searches to | | | | |
| identify just who has what worthtargeting. | | | | A stable past is a good predictor of a stable |
| But offshore assets are safe. Asset | | | | future. |
| searcheswon't uncover offshore assets, these | | | | |
| remain totallyinvisible and safe from attack. | | | | On the other hand, countries with a history |
| | | | of civil war,military coups and civil unrest |
| Thirdly, with an offshore bank account you | | | | are definitely not right forbanking purposes. |
| are insuredagainst the unknown events | | | | Cash held in a banana republic is high-risk. |
| tomorrow might hold. You neverknow when you | | | | Future flash points in volatile regions can |
| might be mighty glad of offshore | | | | renderyour cash lost or worthless. |
| cashreserves. If circumstances at home make | | | | |
| it impossible orunwise for you to stay, or | | | | Look at the human rights record of the |
| impossible to access yourdomestic funds, your | | | | haven's government. Agovernment with high |
| offshore funds provide you with afinancial | | | | regard for its domestic population islikely |
| lifeboat. | | | | to regard you equally highly. A government |
| | | | whichtreats citizens like cattle to be |
| "Not all banking havens are suitable, safe, | | | | reared, milked andslaughtered is likely to |
| or secure." | | | | come to view you in the same casualmanner. In |
| | | | such a climate private wealth may suddenly |
| Finally, you can rest secure in the knowledge | | | | becomegovernment property. |
| that you havea secret nest-egg. You can build | | | | |
| and grow a private stash ofcash beyond the | | | | Check if there's a strong socialist political |
| gaze of anybody in your home country. | | | | faction in thehaven. Overtly socialist |
| | | | governments can't be trusted tolook after |
| The first thing you need do, to enjoy the | | | | your nest-egg. Political upheaval, |
| benefits of anoffshore bank account, is to | | | | newideologies and attendant legislation can |
| select a good offshore bankinghaven where you | | | | change a haven'sattractiveness overnight. |
| can open your accounts. This is easier | | | | Ensure there's little likelihoodof an ultra |
| saidthan achieved. You aren't short of | | | | left-wing political party sliding into power |
| choice, from the Bahamasto Vanuatu, Cyprus to | | | | inthe foreseeable future. |
| the British Virgin Islands, | | | | |
| | | | Is the haven free from racial tensions and |
| Switzerland to the Cayman Islands. Countries | | | | other socialproblems? These can trigger |
| the world overare in the market for, and only | | | | crisis which may affectdeposited funds. |
| too happy to accept, asmuch foreign capital | | | | |
| as they can get their hands on. | | | | What about the prospect of foreign invasions |
| | | | and war? Theseare slight for an isolated |
| However, you must bear in mind that not all | | | | country. But keep an eye on thetreatment your |
| banking havensare suitable, safe, or secure. | | | | haven receives in the international press. |
| Some are excellent. Othersare ticking time | | | | |
| bombs. If you open an account in the | | | | Areas and regions seldom become hot spots |
| wrongcountry, it can prove very costly in | | | | overnight. Look atrecent political |
| more ways than one. | | | | developments and events in the haven |
| | | | toestablish if there is any potential |
| What you need to do is to find out how | | | | trouble. |
| particular bankinghavens measure up before | | | | |
| you lodge any of your cash orassets there. | | | | "A stable past is a good predictor of a |
| This will require you to perform some | | | | stable future." |
| researchand investigation. This is well worth | | | | |
| doing, and thoroughly. | | | | Consider local attitudes. Is there wide local |
| | | | support forthe financial services and banking |
| Mistakes avoided at this early stage save | | | | industries? Does thelocal population |
| time, trouble andmoney further down the road. | | | | appreciate that international |
| | | | bankingoperations are effectively supporting |
| I suggest you measure the quality of any | | | | the country's economy? |
| haven whichinterests you by subjecting it to | | | | |
| my Ten-Point Suitability | | | | Or does the presence of foreign capital breed |
| | | | resentment? |
| Test. Satisfy yourself on all points crucial | | | | |
| to yourparticular requirements. | | | | Is there a foreign-bashing agenda? |
| | | | |
| 1. Location, Location, Location? | | | | Be sure to keep abreast of events and the |
| | | | socio-politicalclimate in your haven. |
| Where is the haven located? Do you want to | | | | Subscribe to newsletters coveringsuch |
| visit your cashregularly? If so, is it | | | | developments. Read the local press. The |
| convenient or practical to have itstashed in | | | | writing isoften, literally, on local walls in |
| a banking haven thousands of miles away | | | | the form of graffiti,for months before |
| fromwhere you live? | | | | anything actually happens which mightaffect |
| | | | your bank accounts. |
| Can you access your haven by air - directly | | | | |
| or indirectly? | | | | 8. Does Your Haven Provide A Back Door For |
| | | | Your Government? |
| Is it a problem getting entry to your haven? | | | | |
| Will you needto queue for an entry visa every | | | | Make sure your banking haven doesn't provide |
| time you want to visit? | | | | your governmentwith a back door into your |
| | | | accounts. For example, sometraditional tax |
| Also, be aware that making regular, visible | | | | havens are existing or former |
| (visa recordsare a paper trail) trips to a | | | | Britishcolonies, such as Bermuda, Cayman |
| known banking haven is likewaving a red flag | | | | Islands, the Channel |
| at any government snoop who might betaking an | | | | |
| interest in your affairs and movements. | | | | Islands, and the UK government is exerting |
| | | | pressure onauthorities there to release |
| Give some consideration to time differences. | | | | information relating to UKaccount holders. |
| Can you manageyour financial affairs | | | | |
| efficiently if it's midnight in yourhaven | | | | British citizens should find out if their |
| during business hours at home? Are you happy | | | | prospectivebanking haven has tax treaties in |
| to waitup until the early hours to speak to | | | | place with the UK. If so,be aware that the |
| financial managers? | | | | treaty allows for the free sharing |
| | | | ofinformation between the authorities in the |
| 2. Do You Speak The Language? | | | | two countries. |
| | | | |
| Effective, smooth-running financial | | | | 9. Does It Offer Enough Freedom For Capital? |
| management depends onfluent communication. Do | | | | |
| bankers and professionals in yourhaven speak | | | | Are you free to take money in and out of the |
| English or some other language with which | | | | haven? If thereare severe restrictions, the |
| you'refamiliar? You may need to discuss | | | | haven is no use to you. Even ifthere are no |
| complex financial mattersin technical detail. | | | | exchange controls in operation now, check |
| It could cost you dear if things areconfused | | | | thatthe haven doesn't have a history of |
| or compromised by language barriers. | | | | exchange controls. Youdon't want your cash |
| | | | trapped in a country which iseffectively |
| 3. How Easy Is It To Stay In Touch? | | | | stemming flight capital. |
| | | | |
| Are there sufficient and reliable telephone | | | | Make sure you have adequate guarantees that |
| and fax lines? | | | | you'll be ableto do what you need to before |
| | | | opening accounts in the haven. |
| Are email facilities available? Is airmail | | | | |
| deliveredquickly? How efficient is surface | | | | For example, are there restrictions on |
| mail delivery? | | | | converting foreigncurrency into local |
| | | | currency and visa versa? Are reportsfiled on |
| If your banking haven is deficient in these | | | | each occasion? Ask financial institutions |
| areas, it maybecome difficult to maintain | | | | inthe haven. |
| regular and instant contactwith your advisors | | | | |
| and account managers. Is this acceptable? | | | | 10. Does The Haven Offer Sufficient Privacy? |
| | | | |
| 4. Is The Tax Situation Right For You? | | | | Seek out banking havens which recognise and |
| | | | actively promotesolid banking privacy. Many |
| Ensure your haven provides the exact tax | | | | havens claim to do so only on aninformal |
| treatment you need. | | | | basis. Under pressure bank managers and |
| | | | financialadvisors may sacrifice you to the |
| Mistakes can prove expensive. Some havens | | | | sharks. Does your haven,and/or the |
| imposewithholding tax" on foreign-held bank | | | | institutions operating there, have a history |
| accounts. Are yousatisfied that this is fair | | | | ofrolling over when exposed to external |
| exchange for the benefits youraccount will | | | | pressures? |
| deliver. | | | | |
| | | | Check whether banking privacy is tradition or |
| 5. How About The Legal System? | | | | actual bindinglegislation. Check whether a |
| | | | professional in a particularhaven is breaking |
| Are the laws in your prospective haven based | | | | the law if he passes data relating to youand |
| on Englishcommon law? Is the judiciary of a | | | | your financial affairs to a third party. Be |
| high standard? Is itindependent? Is the Court | | | | aware that |
| system effective? Are there rulesto resolve | | | | |
| conflicts of law? Are the banking | | | | "confidentiality" laws allow local government |
| regulationsstiff? Or is there ample | | | | access to youraccount details (although they |
| opportunity for a fly-by-nightmerchant to | | | | can't pass the data on to athird party). |
| slip through the nets? | | | | |
| | | | Solid banking privacy legislation is the best |
| Are banking services registered with | | | | protection foryour cash. A strong, secure |
| regulatoryorganisations that uphold | | | | haven will have banking privacylegislation |
| professional standards andprocedures? | | | | which carries stiff penalties (financial |
| | | | andcustodial) for any professional who |
| Satisfy yourself that the haven has local | | | | breaches them and passesdata on to third |
| laws and legalpractices which provide | | | | parties. |
| adequate protection of your fundsand investor | | | | |