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Offshore Banking and Trading

post #1 of 16
Thread Starter 

I just started researching this tonight.. as I am bored and markets are closed tomorrow.. Here is where my mind has wondered to.. all of this is legal by the way.. US companies use this to avoid paying billions in taxes.


Being tax season.. and the ridiculous amount of capital gains tax I have to pay (I'm sure it's chump change to quite a few) I started thinking about opening an offshore account and using an international broker to trade US markets.


First step: Create Offshore Bank Account

I have selected Belize as the destination for my offshore account (so far) Belize is recognized as a great tax haven. There are NO capital gains taxes in Belize foreign or domestic. Many huge US corporations and wealthy US citizens use Offshore Belizean Banks to reduce US taxation. It is a controversial topic to some.. but I've always believed if you can't beat them, join them. Belize has also been a stable democratic country for some time and they use a fixed rate of 2 BZD = 1USD and the topic to adopt the USD as official currency has been brought to the table more than once (though in an Offshore Belizean Bank you will never convert your currency to BZD)


The process for setting up an Offshore Belizean Bank account is pretty straightforward and secure. The first step (it seems) is to setup the bank accounts in the name of an International Business Company (IBC) which  gives you absolute secrecy and protection (anonymity is paramount in offshore accounts) "A Belize IBC is exempt from all forms of taxation and assets are fully protected from confiscation orders or similar actions by foreign governments." There are no annual company returns to furnish and directors and shareholders remain anonymous (no financial reporting?) Setting up an IBC sounds intimidating but it isn't.. It mostly seems to be the first loop to jump through in the tax evad.. I mean tax reducing.. loopholes. Offshore Belizean Banks offer a one-day offshore incorporation service with their law firm in Belize with your IBC documents couriered right to your doorstep anywhere in the World. Most demand (checking) accounts require $1,000 - $5,000 minimum balance. Boom. Offshore account setup and funded. Right?


Next step: Use International Trading Platform to Trade US Markets

Not much research has been done here on my part.. currently still researching step one.. stopped mid-way to write this thread and get some thoughts down before they flew out of my coo coo nest.


But my understanding of how this process would work goes like this.

Setup an International trading account funded by the Offshore Belizean Bank account and IBC registered in Belize. Seems to easy.. where's all the red tape and loopholes?



What are some reputable International Trading Platforms?

*I have been referred to Interactive Brokers. http://www.interactivebrokers.com/en/main.php They trade on all the exchanges I am looking for except OTCBB.


Are there any International Trading Platforms that trade OTCBB?


Can I open a mainland discount brokerage account with a major US broker in the name of the offshore IBC and still be tax exempt?

*As I understand it, it will be treated the same as any other foreign company trading on the US or any other mainland market with no capital gains tax to pay.


As mentioned in step two, where's all the red tape and loopholes?


Can funds be transferred from the Belizean account to a US account and still not be subject to taxation?


Any other information that can be provided will be greatly appreciated.. and like I said.. I just started researching today and will be updating as I find more information.

Edited by Rymo - 2/22/11 at 7:00pm
post #2 of 16
Thread Starter 

Found this funny..


On the 2008 campaign trail, Obama made his hostility toward offshore jurisdictions clear:

"There's a building in the Cayman Islands that houses supposedly 12,000 U.S.-based corporations. That's either the biggest building in the world or the biggest tax scam in the world, and we know which one it is."

It made no difference that a similar building in Wilmington, Delaware, home to his vice president, Joe Biden, houses more than 50,000 corporations.


Also.. still haven't found anything explicitly saying this is illegal..(with an IBC).. there is most certainly a legal way to do this..


And some fun facts....


• $1.2 trillion dollars on deposit in Cayman Banks - up 10% in 2005 says Cayman Government.

• Sixty percent of these monies comes from US investors says Manhattan District Attorney Robert Morgenthau.

• Did you know there are two online stock broker firms located in a no tax haven (offshore) - and both are 100% owned by the Bank of New York? Hmmm so not only are the Market Makers not paying fees.... they also aren't paying taxes.. that's the American spirit ;)

• Did you know that non-resident aliens (including foreign companies) can trade "publicly traded stocks" (i.e., NYSE, NASDAQ, AMEX) under the tax code and not owe capital gains tax?

• "One of the most effective applications of offshore trusts is in an ownership combination with a limited company." - Richard Graham-Taylor, partner Ernst & Young, Grand Cayman (January 1990).

• 2005 revenues for Ernst & Young worldwide were $19 billion... What's 35% of $19 billion? Hahaha... because that is what they didn't pay!

post #3 of 16
Thread Starter 


 A decent Q & A from Belize.com...


What is Legal Offshore Banking?

It is simply banking in a jurisdiction other than the one in which you live or have citizenship or residency.


What are the benefits of Legal Offshore Banking?

Offshore Banking may have tax benefits. For example earned interest on offshore accounts and investments is paid without the deduction of tax. You may also be able to reduce your tax liability in your home country by transferring savings and investments to an offshore bank account. Added benefits include high levels of confidentiality, security and convenience, as well as global access.


Do I have to travel overseas to bank offshore?

No. You never actually have to visit your offshore bank. You can simply bank from wherever in the world you live, via a secure Internet connection, secure e-mail, post or telephone (either through a touch tone phone or by contacting your banking representative or registered agent). You can also use an ATM card provided by the offshore bank.


How do I get an offshore account?

There are several companies that specialize in setting up offshore bank accounts. We suggest the British Caribbean Bank located in Belize and the Turk and Caicos Islands. You may also consider law firms and Belize lawyers that act as Registered Agents for offshore banks. We strongly recommend due diligence by personally visiting the bank or law firm and making your own assessment as to the pros and cons of a service provider. In Belize we can suggest the following lawyers: Rodwell Williams or Emil Arquelles. Kindly mention Belize.com if you decide to contact these attorneys.


Is it legal for me to get an offshore account?

Yes, absolutely legal. Offshore banking has been routinely and legally used for many years by individuals, companies big and small and organizations worldwide. Once the purview of high net worth individuals, offshore banking has come of age and is accessible to most anyone. Because many countries encourage international trade and enterprise, there are usually only limited restrictions on residents doing business or having bank accounts in other countries. However, reporting requirements on these accounts differ from country to country.


What about income tax on income I've earned offshore?

Some countries require residents to declare their income on a worldwide basis and tax is payable on all your income. In certain circumstances the income of an entity which you control may also be taxable. For this reason, most countries have no restrictions on where your business interests, investments or bank accounts may be located. It is your responsibility to report income to your appropriate tax authority. Belize has no such requirement and best of all no Capital Gains Tax. U.S. News and World Reports says Belize is one of the Top Ten Retirement Destinations In The World.


If I have to pay taxes why should I bank offshore?

There are many other reasons to bank offshore apart from minimizing your tax liability. Other reasons include asset protection, estate planning, confidentiality, better returns and the ability to advance active business interests overseas from a zero tax jurisdiction with near hermetic confidentiality.


I would like to keep my personal affairs confidential for reasons other than tax minimization. Are confidentiality and privacy ensured?

Offshore jurisdictions offer extraordinary levels of confidentiality but they cannot offer absolute secrecy. All financial institutions have a legal obligation to report suspicions of serious criminal conduct. Foreign authorities can seek information through the legal system, where there are well-founded suspicions of serious crime. A serious crime is defined as anything which is a crime in the offshore jurisdictions and would warrant a prison sentence of at least twelve months. Near absolute anonymity and confidentiality are achievable via a combination of various offshore vehicles, including International Business Companies (IBCs) and Offshore Trusts. Otherwise, all personal data is subject to modern data protection legislation, and there are severe civil and criminal penalties for breach of confidentiality and unauthorized disclosure of client information.


post #4 of 16
Thread Starter 

Wanted to get this down.. will edit later.. will also look up and post all forms and laws mentioned..

Talks more about US residents and IBC's towards the end..


Under the U.S. Tax Code, only when a foreign company, foreign trust or nonresident alien individual takes up permanent residence within the United States will he be subject to U.S. capital gains taxes in the same way as domestic taxpayers. For a corporation permanent residence would be a U.S. office or warehouse. Capital gains realized by foreign corporations and other nonresidents "not engaged in a trade or business within the United States" are exempted from tax under IRC Section 871 and IRC Section 881 & IRC Section 897(c)(3). Moreover, U.S. Treasury Regulations Section 864-2(C)(1) & (2) provides an exception for what embodies being "engaged in a trade or business within the United States". Under U.S. regulations, a nonresident's Stock Market transactions carried-out through a U.S. stock broker, independent agent, or an employee are not considered to cause the nonresident to be "engaging in a trade or business within the United States".

Publicly traded stock market gains (from NYSE, NASDAQ or AMEX listed stocks and bonds) accruing to an offshore company are free of US capital gains taxes by the Internal Revenue Tax Code's statutes, but "US Shareholders" can have a tax liability (indirectly) if the offshore company is a "Controlled Foreign Corporation (CFC) (i.e., "more than 50% of voting and non-voting stock is owned by US SHAREHOLDERS). See sections 951 thru 958 of the IRC. See especially Code-Section 951(b) for the definition of US SHAREHOLDERS.

American taxpayers that use tax havens are taking more risks (generally) than a foreign non-resident alien (not a US citizen). Whether an American citizen taxpayer will have a tax liability on the offshorecompany profits depends on a lot of things - including what kind of income is produced by thecompany (i.e., Subpart F or non-Subpart F) and how many shares in the company you own, and whether the offshore company is a CFC - as defined in the Internal Revenue Code in Sections 957 and section 958.

Disclaimer: Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice in this communication, including any attachments or enclosures, was not intended or written to be used, and it cannot be used, by any person or entity for the purpose of avoiding penalties imposed under the Internal Revenue Code.

Tom Azzara
New Providence Estate Planners, Ltd.
(Lawyers and Consultants)
54 Sandyport Drive
P.O. Box CB 11552
Nassau, Bahamas
Fax/phone: (242) 327-7359
email: taxman@batelnet.bs

post #5 of 16
Thread Starter 
Originally Posted by Jamluneek View Post

If you need an offshore account you can rent it or just buy it. I have its in this zones: British Virgin Islands Cyprus Singapore Panama All accounts have internet-banking system with online access, also some account have issued debit card. I accept payment by Paypal, my account is verified Business paypal account. For prices contact with me jamluneek@yahoo.com

see.. this is what you have to watch out  for when looking into this or actually doing it... scammers.. like this boner here... he joined today and this is his first post.. people just trolling looking to scam you out of money.. of course they should never get your money... unless you are an idiot.. 


gonna leave this up for now for people to see.. but it will come down eventually.. and Jamluneek.. GTFO

post #6 of 16

Interesting I'll have to look and see if Canada is the same as the U.S. Would like to see what else you have found.

post #7 of 16

thanks for sharing your research. Interesting topic to say the least. 


post #8 of 16

You MUST have a US Tax ID to open an account and trade. I do not know of any bank or broker who allows access to US Markets without a Tax ID - Pretty sure that this is standard AML (anti money laundering) and Patriot Act stuff but this is not my area of expertise.


You can set up all the offshore accounts you want but just remember you are sending post-tax dollars there to fund the account and then you are only able to avoid paying taxes on non-US earned income. To move the money back into the US you would need to report it as a taxable event and associate it with a tax ID (EIN or SSN).


There really isn't a way to (legally) trade US Equities tax-free.


The other piece to the offshore accounts is the veil of protection they offer an individual or LLC. This is similar to registering your company in DE vs. WY - WY is cheaper however DE offers the best veil of protection. There are many offshore locations that are much more desirable than Belize such as Cayman, Ireland, Hong Kong, etc.

post #9 of 16

I trade US stocks from Canada and I have no U.S. Tax I.D.


I don't know what the situation is for using an offshore account from the U.S. but I can tell you that it is no problem from Canada. I ran a business using an offshore account in Gibraltar, never paid a dime in taxes and it is LEGAL, I got the idea when at the time Paul Martin was running for prime minister and it was made public that he owns businesses and does his banking offshore in order to avoid paying Canadian corporate taxes, meh he lost the election but helped this Canadian's bottom line. Cheers!

post #10 of 16

Very interesting!

post #11 of 16

You said you were looking at Belize to open your offshore bank account. I don't know much about Belize, but I do know that Panama is a growing area for offshore banking. I can't tell you the pros and cons of Belize vs. Panama, but if you are interested in looking further into it, here is basic overview of offshore banking in Panama. And if you are interested in learning even more, you can talk to some Panama offshore law firms. These firms specialize in Panama offshore services.



Do I need a lawyer to open a bank account in Panama?
R. No. A lawyer will usually facilitate the account opening procedures due to the fact it is more familiar with the requirements, nevertheless, It is important to note that it is not required an attorney to open a Bank Account in Panama; you could perform this procedure directly with the bank. However, according our experience opening a corporate account takes time and continued communications with the bank in order to comply with all the requirements. Usually clients does not want to be involved in these details and prefer to have an attorney or law Firm to take care of these procedures for them. Our Firm will be glad to provide bank introduction services for corporations established by our Firm.

Is it necessary to come personally to Panama to open the account?
R. According to new regulations all the bankers in Panama are obligated to know their clients intimately. For that reason it is suggested that the client (account signatory) come personally to Panama for a brief interview with the bank and to sign the bank application forms. This depends strictly of the banks, some banks requires it and some not.

How long should I stay in Panama for opening the account?
R. Usually a short trip of one or two business days will suffice for this purpose. The bank interview and signature of bank documents can be accomplished swiftly in one business day, however, it is important to note that the bank account will not be opened this same day. our Firm will keep track of the procedure until the account is finally approved (approximately 2 weeks later).

How long does it take to open the account?
R. Approximately 2 weeks. Once we have the interview with the bank and sign the bank application forms, the bank compliance department will study all the information and documents provided. If everything is in order they will authorize the opening of the account. The bank compliance department might request additional information or documents if they consider it necessary; in this case, our Firm will inform the client about these new requirements and will present the additional documents or information to the bank officer.

Is the information provided to the bank private?
R. All the information and documents requested by the banks are required for the bank private records. This information is kept totally confidential and can’t be shared with any country or institution, unless they are formally and officially requested by the local Panama Authorities.


One firm, Mata & Pitti, "can also refer some high rated banks in other offshore jurisdictions such as Belize and Switzerland," if you are still looking at Belize and want a second opinion. Good luck.

post #12 of 16
I have thought about try to do this too. The thing that I would think that would hold me up if I signed up for interactive brokers with my French bank account ( I'm have us passport and French residency and bank)
Would probably be a citizenship box, when I say American citizen, automatically I have to use my ss number.

Now lets say I moved to Uruguay, ( planning to in the future if I can find solid online employment), I stay 5 years and I'm lucky enough to get a second passport, opened a bank and corpoation in panama, then signed up for a broker account and claimed Uruguay as my nationality..., I should be alright. It's my long term plan, but I would say its not worth it unless you plan on making more then 300,000 trading every year.
post #13 of 16

On the offshore broker, I'm with International Brokers, Inc. (www.ibworldwide.com) registered in Belize. Very professional so far. PM me if you have any questions about my experiences with them.

post #14 of 16

seems like a lot of work to avoid taxes....read this article:




Probably cheaper to just move in some cases. I am sure some of you already live outside of the USA, but there's probably ways for you to lower your taxes without using "back door alley ways"...laughing.gif

post #15 of 16
Originally Posted by ivan75 View Post

On the offshore broker, I'm with International Brokers, Inc. (www.ibworldwide.com) registered in Belize. Very professional so far. PM me if you have any questions about my experiences with them.



Hannes Anderson, is that actually you? Wow, I've never replied to an in-the-flesh international con artist before!



post #16 of 16
Originally Posted by IAmBroom View Post


Hannes Anderson, is that actually you? Wow, I've never replied to an in-the-flesh international con artist before!



cant never understand how ppl get involved in such delicate task on an internet posts!!!!!

stay away unless you know personally the person ... there is many "legal" way to open  offshore acc. 


well done IAmBroom  to post that 

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