December 2006 Archives

The OECD, the Paris-based anti-taxhaven group, just hates bearer shares! They have gone out of their way to brand any country that allows bearer shares as an "uncooperative" country. But they have a problem: in the words of the comic strip character Pogo, "we have met the enemy and they is us!" Switzerland is an OECD member and many major Swiss corporations still issue bearer shares, and such shares are regularly traded. Another well-known OECD member nation is the United States, one of which, Nevada to be specific, allows bearer share corporations.

Here today, gone to Rio. Be back in 2007.

Please read our Season's Greetings

Since we've been covering Marshall Islands lately, I thought it appropriate to add an excerpt from a press release from a Bahamas conglomerate (after completing an IPO on the NYSE), to demonstrate how they use Marshall Islands LLC's....

Teekay Offshore Partners L.P. (NYSE:TOO), a Marshall Islands partnership recently formed by Teekay Shipping Corporation (NYSE:TK ), is an international provider of marine transportation and storage services to the offshore oil industry. Teekay Offshore Partners owns a 26.0% interest in and controls Teekay Offshore Operating L.P., a Marshall Islands limited partnership with a fleet of 36 shuttle tankers (including 12 chartered-in vessels), four floating storage and offtake units and nine conventional crude oil Aframax tankers.

Continue reading Teekay Offshore Partners IPO

In a surprising about-face the Italian government has announced it is going to issue 17,000 licenses for betting shops, casinos, online gaming and sports books. This is 180° change from October when Italy was still pursuing strict suppressive measures. The "big boys" of the industry are already lining up for licenses.

This will almost certainly have a cascading effect throughout the entire EU. Already Greece, Ireland and the Czech Republic are watching these developments very closely with an open mind. Spain has already decided to follow Italy's lead. They are even reports that Canada is going to defy the US and go forward with the extension of online gaming.

No one seems to care what the Bush administration or the U.S. Congress will think about this.

... because the 10% on top is glistening and gleaming and looks wonderful, and 90% of it that is hidden is filled with unknown dangers. The history of tax shelters in the United States has at best, been dubious, and at worst disastrous.

The biggest problem with a tax shelter is that it is intrinsically self-destructive. For a tax shelter to work it has to be a reportable item on one's tax return: in the form of a credit, a reduction, a set off, etc. As such, it is easily quantifiable by the IRS. As soon as any tax shelter really become popular, and starts to cut into the revenue collected by the IRS, they act to destroy it. In virtually every case, except for the venerable and sacrosanct home mortgage interest deduction, Congress agrees with the IRS that the tax shelter in question is an abuse and must be wiped out.

The Southron’s Guide to Living in Uruguay is the most comprehensive and authoritative book available on moving to and living in one of the least known Expat retirement and Investment location in the world: URUGUAY!

One of the most common motivations for those who venture offshore is the belief that they can avoid or defer U.S. income taxes with a foreign bank account, a foreign trust or a bearer share foreign international business company. Some of that belief is based on very old and outdated information. Some of it is caused by articles and information that is grossly over-simplified or taken out of context and therefore mis-understood. And, then there are the outright sharks and crooks who have no concern about giving blatantly false information to gullible U.S. taxpayers.

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The recent death of former Chilean President and strongman General Pinochet, and the subsequent scramble to find the money he stashed around the world is yet one more illustration of the hypocrisy of major world banks, and the completely amoral behavior in which they regularly engage.

While dictators are in power banks are thrilled to take their deposits. After all, from a technical legal standpoint, what can be cleaner than funds deposited by someone who enjoys sovereign immunity.

From all that's been written lately about General Augusto Pinochet of Chile, here's an interesting opinion from William F. Buckley

ANY KIND WORDS FOR PINOCHET?

He wore a smoking jacket of sorts, made drinks, and I was told to proceed with my line of questioning. I can maneuver in the Spanish language but had a problem with the Spanish I was hearing, and was informed by the lady intermediary that the general was using the rough dialect of his native region. I went quickly to the pivotal questions:

The LLC is a: A) Corporation; B) Partnership; C) disregarded entity; D) any of the above.

The correct answer is D) Any of the above. As you know, the US IRS classifies every non-trust Company as either a partnership, corporation, or disregarded entity. This applies to both domestic US LLCs and foreign LLCs. While there are default rules for the classification of both foreign and domestic LLCs, one has the option in both cases of selecting a different classification simply by checking the box on IRS form 8832.

Since the Navigator and I both reside in South America, I thought this article contributed by "The Commodity Investor" was quite appropriate.

The year of the election in South America ended rather undramatically as Hugo Chavez won his bid for re-election in South America. A year ago, his policies and his anti-US stance were drawing in fans across the continent and indeed across the world.

As the Navigator is on Shore-leave, today's post is courtesy of Vernon K. Jacobs from the Offshore Press

QUESTION: I work in the Middle East and I am paid by the joint venture from the Middle east. The joint venture is half American and half Oman. Do I have to pay taxes?

In the world of international finance you will hear a number of confusing terms to describe various kinds of banks. These include A banks, B banks, C Banks, offshore banks and shell banks.

A shell bank is one which has no substantial presence, staff, or independent existence. These banks are often nothing more than a banking license lodged at an attorney's office with the nameplate on the door from which they have also come to be called, brass plate banks. Under the Patriot Act, these banks are de facto presumed to be criminal operations. The most famous purveyor of these banks was Jerome Schneider, who has since been convicted of various felonies.

Panamá has a currency arrangement unlike any other in the world. The official currency of Panamá is the Balboa (B/). The Balboa has always been pegged at 1:1 to the US dollar. Further, not one Balboa note has ever been printed. Balboa denominated coins are minted in exactly the same size, shape and value as the US penny, nickel, dime, quarter and half- dollar. In practice, this means that the US dollar changes hands in Panamá as the local currency. In practice, Panamá has always been “dollarized” like the British Virgin Islands, the Turks & Caicos Islands, and more recently, El Salvador and Ecuador. Nevertheless, legally, Panamá’s currency is still the elusive Balboa.

Is it I, asked the Cayman Islands? NO, said the mirror. Is it I, asked Switzerland? Nein, said the mirror? Is it I, said the Channel Islands? Not bloody likely, said the mirror?

It’s me of course, barked the US! And the mirror said, YES! But only for non-US Persons!

Imagine an offshore jurisdiction where a person can form a tax-free company, over the phone in minutes using a credit card. Imagine in that same country that non-residents could receive bank and insurance company interest tax free. Imagine in that country that non-residents could buy and sell securities with tax free profits?

One of the most powerful estate planning tools available to the modern international financial planning practitioner is the FOREIGN DEFERRED PRIVATE ANNUITY (FFDPA)

An FFDPA is a contract between an individual (the "Annuitant") and a foreign entity that is neither an insurance company nor in the business of selling annuities (the "Company").

Forced heirship rules in many civil law countries are an ongoing source of family problems which have frustrated proper estate planning and divided families into warring camps for generations.

While there are a number of very good solutions for this problem, one of the most popular is the use of a foreign trust structure to hold the assets indefinitely without ever triggering heirship rules since a trust never dies.

The following questions need to be asked when determining which IBC is best for your specific needs. There is no right or wrong answer to any of these questions. But there are some answers that are better for you, and others that are worse.

Q. What specific kind of IBC do you require? (A corporation, limited liability company, limited liability partnership, to name the most common.)