First, I Googled “company registration tax haven” and randomly picked three firms that set up accounts in offshore jurisdictions. Then I called each and explained that I was hoping to minimize my tax exposure and didn’t want anyone to know anything about my finances. Each company quickly noted that I should consult a lawyer to make sure that I wasn’t breaking the law. Then they calmly explained how to create an account that, it seemed to me, was unlikely to be discovered by the I.R.S. or any other authority.
I ended up working with A&P Intertrust, a Canadian company that I chose largely because I liked its Web site the best. (The other two companies’ sites appeared stuck in a late-’90s style with lots of flashing boxes.) A&P works with the governments of Panama, the British Virgin Islands and Belize. (Other companies that I contacted prefer the Seychelles, Cyprus or the Cayman Islands, where Mitt Romney has been reported to have money.) I decided to start my shell company in Belize because it would be exempt from all Belizean taxes and, as A&P’s site explained, “information about beneficial owners, shareholders, directors and officers is not filed with the Belize government and not available to the public.” And I’ve been to Belize and like the place.
Setting up the company was a lot cheaper than I expected. A&P charged $900 for a basic Belizean incorporation and another $85 for a corporate seal to emboss legal documents. For $650 more, A&P offered to open a bank account to stash my fledgling operation’s money in Singapore — a country, the Web site also noted, that “cannot gather information on foreigners’ bank accounts, bank-deposit interest and investment gains under domestic tax law.” And for another $690, it offered to assign a “nominee” who would be listed as the official manager and owner of my business but would report to me under a secret power-of-attorney contract. Then an A&P associate asked me to fill out the incorporation information online, just so she wouldn’t type in anything incorrectly. The whole thing took about 10 minutes. (...)
Setting up an account may be easy, but managing one is expensive. Following the law requires a team of lawyers and accountants to carefully monitor tax laws in dozens of countries and maintain accounts that stay on the safe side of confusing rules. It’s not really worth the cost for anyone other than wealthy investors looking to put aside money, tax-free, for future generations. Or for large multinationals who prefer to centralize their global cash-flow stream in a place that doesn’t tax corporations or require a lot of financial reporting. Why would a huge company like G.E. want to pay U.S. taxes every time its Spanish subsidiary sells parts to a company in Belarus when it could avoid them by incorporating offshore?
It’s easy to imagine that most other kinds of offshore activity are shady, but there is no definitive way to know, because we don’t even know how much money is in these centers. The estimates, however, are striking. The Bank for International Settlements, which collects voluntary reports from banks in 44 countries, offers the best single source of data. It counts around $31 trillion of foreign-owned assets in the world’s banks and estimates that about $4 trillion is in offshore financial centers. An estimated $1.5 trillion is in the Cayman Islands alone. The country of 52,000, which is about the size of Blaine, Minn., has more foreign-owned deposits than Japan or the Netherlands.
by Adam Davidson, NY Times | Read more:
