Corporate Owned (or Foundation/Trust) Accounts vs. Personal
If your primary reason for going offshore is for more secure, more private, safer and more varied banking and investment options then you may want to think again.
Invest & Bank Offshore
If your primary reason for going offshore is for more secure, more private, safer and more varied banking and investment options the first thing you need to consider is the forming of one or more offshore structures. Without thinking many people assume they can simply open a personal account in their name and because that account exists in a country and bank that still observes strict banking secrecy, their identity will be protected by the bank and that nation’s privacy law.
The problem here is that every time you want to make a payment into the account or out of it, your name will be in effect broadcast to the world as the owner of that account. This is because the so called numbered accounts of the past are no longer available anywhere. Any incoming or outgoing payment from the account will always have your name associated with it on the bank-to-bank routing instructions. Therefore, it is imperative that the account be opened in the name of a company, foundation or possibly a trust rather than your personal name. Yes, as signatory on the account you will be still known to your bank, but your account will be anonymous to the world, so long as you bank in a country that still does not routinely share information with foreign governments and private investigators.
That way any payment into and out of the account is not automatically linked to yourself personally because the name of the company, foundation or trust will now only be on the inter-bank payment instructions and nothing else about the account will be visible. This concept of the “corporate shield” is one of the most important aspects of forming a foreign company even if you do not plan to conduct any business other than banking and investments. The company (or foundation) becomes a separate legal entity with its own life and rights under law. It is the whole basis behind the asset protection features of a foreign company formed in a country like Panama with favorable corporate laws that favor the ordinary person that merely wishes to shield their assets from predators.
The problem with all this is that you run into FBAR and OVDI IRS problems.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
By Lance Wallach, CLU, CHFC
Abusive Tax Shelter, Listed Transaction, Reportable Transaction Expert Witness
ABOUT THE AUTHOR: Lance WallachAbusive Tax Shelter, Listed Transaction, Reportable Transaction Expert Witness
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications,
Copyright Lance Wallach, CLU, CHFC
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.
