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ASSET PROTECTION - Can You Bank On Your Haven?

There are more offshore banking havens thanrights.
you can shake astick at. Nicholas Pullen
tells you how to separate thewheat from the6.  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 toits Gross Domestic Product isrepresented by
placing some ofyour hard-earned money inforeign 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 yourCook  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 offshoreA haven's confidence in its liquidity can be
is greatly protected against anynegativejudged, atleast to some degree, by its
actions your government might take, orwillingness to put in placesolid depositor
legislationit  might  introduce,  tomorrow.protection. Enquire of financialinstitutions
in the haven whether or not
Secondly, you get protection from predatorsdepositorprotection  exists.
and  parasites.
7. Is The Haven Free Of Trouble? Will It Stay
Offshore wealth is shielded from theThat  Way?
attentions of assethunters. Avaricious
litigants, thieves, fraudsters,Does the haven have a trouble-free history
conmen,blackmailers (disgruntled ex-businessand a secureculture? A country which has
partners and ex-spouses) who all seek toexperienced only moderatepolitical, economic
pinpoint, target and eventuallyattackand social change, and where politicaland
individuals with visible wealth. These sharkssocial violence is uncommon, is a
haveweapons at their disposal, and they usetrouble-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. Assetfuture.
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 youare definitely not right forbanking purposes.
are insuredagainst the unknown eventsCash held in a banana republic is high-risk.
tomorrow might hold. You neverknow when youFuture flash points in volatile regions can
might be mighty glad of offshorerenderyour  cash  lost  or  worthless.
cashreserves. If circumstances at home make
it impossible orunwise for you to stay, orLook at the human rights record of the
impossible to access yourdomestic funds, yourhaven's government. Agovernment with high
offshore funds provide you with afinancialregard 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 knowledgebecomegovernment  property.
that you havea secret nest-egg. You can build
and grow a private stash ofcash beyond theCheck 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 theyour nest-egg. Political upheaval,
benefits of anoffshore bank account, is tonewideologies and attendant legislation can
select a good offshore bankinghaven where youchange a haven'sattractiveness overnight.
can open your accounts. This is easierEnsure there's little likelihoodof an ultra
saidthan achieved. You aren't short ofleft-wing political party sliding into power
choice, from the Bahamasto Vanuatu, Cyprus tointhe  foreseeable  future.
the  British  Virgin  Islands,
Is the haven free from racial tensions and
Switzerland to the Cayman Islands. Countriesother socialproblems? These can trigger
the world overare in the market for, and onlycrisis  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 allcountry. 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 theAreas and regions seldom become hot spots
wrongcountry, it can prove very costly inovernight. 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 howtrouble.
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 somestable  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 saveindustries? Does thelocal population
time, trouble andmoney further down the road.appreciate that international
bankingoperations are effectively supporting
I suggest you measure the quality of anythe  country's  economy?
haven whichinterests you by subjecting it to
my  Ten-Point  SuitabilityOr 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 toSubscribe to newsletters coveringsuch
visit your cashregularly? If so, is itdevelopments. Read the local press. The
convenient or practical to have itstashed inwriting isoften, literally, on local walls in
a banking haven thousands of miles awaythe 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 everyMake 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, visiblehavens are existing or former
(visa recordsare a paper trail) trips to aBritishcolonies, such as Bermuda, Cayman
known banking haven is likewaving a red flagIslands,  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 yourhavenBritish citizens should find out if their
during business hours at home? Are you happyprospectivebanking haven has tax treaties in
to waitup until the early hours to speak toplace 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 financial9.  Does It Offer Enough Freedom For Capital?
management depends onfluent communication. Do
bankers and professionals in yourhaven speakAre you free to take money in and out of the
English or some other language with whichhaven? If thereare severe restrictions, the
you'refamiliar? You may need to discusshaven 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 areconfusedthatthe 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 telephoneMake 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 surfaceFor 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 theseeach occasion? Ask financial institutions
areas, it maybecome difficult to maintaininthe  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 taxhavens 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 havenssharks. Does your haven,and/or the
imposewithholding tax" on foreign-held bankinstitutions operating there, have a history
accounts. Are yousatisfied that this is fairofrolling over when exposed to external
exchange for the benefits youraccount willpressures?
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 basedthe law if he passes data relating to youand
on Englishcommon law? Is the judiciary of ayour financial affairs to a third party. Be
high standard? Is itindependent? Is the Courtaware  that
system effective? Are there rulesto resolve
conflicts of law? Are the banking"confidentiality" laws allow local government
regulationsstiff? Or is there ampleaccess to youraccount details (although they
opportunity for a fly-by-nightmerchant tocan't  pass  the  data  on  to athird party).
slip  through  the  nets?
Solid banking privacy legislation is the best
Are banking services registered withprotection foryour cash. A strong, secure
regulatoryorganisations that upholdhaven will have banking privacylegislation
professional  standards  andprocedures?which carries stiff penalties (financial
andcustodial) for any professional who
Satisfy yourself that the haven has localbreaches them and passesdata on to third
laws and legalpractices which provideparties.
adequate protection of your fundsand investor



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