Excellent Offshore Numbers

October 10, 2008

In 1907 American humorist Mark Twain, in his “Chapters from My Autobiography” wrote: “Figures often beguile me, particularly when I have the arranging of them myself; in which case the remark attributed to Disraeli would often apply with justice and force: ‘There are three kinds of lies: lies, damned lies, and statistics.’”

That familiar saying refers to the persuasive power of numbers, the use of statistics to bolster arguments, and the habit of disparaging statistics that don’t support your positions.

Here, I’m going to address hard statistics about offshore tax havens — and the hopeful picture these numbers paint, even after a decade of leftist attacks and high tax government campaigns to discourage tax haven use.

Counter-Revolution of Real Reform

If, in recent years, one listened to the leftist, statist, socialist mouthpieces of the world — for example, the bureaucrats of the Organization for Economic & Community Development (OECD) — their official propaganda line has been that offshore tax havens would (and should) soon become extinct.

That wishful thinking reflected the tax collector mentality of the major welfare G-7 nations that see global tax competition as some sort of evil tax evasion cloaked in sinister financial and banking secrecy. But in a sort of perverse counter reaction produced by all the outside pressure on offshore financial centers, tax havens really have reformed themselves — and in so doing have made themselves even more attractive to wise investors and those seeking strong asset protection and financial privacy.

It’s true that offshore banking secrecy has been diluted somewhat by “know your customer”‘ and “suspicious activity” reporting rules, plus cash transfer report requirements. Some new taxes have been imposed in some havens, mostly as a result of the European Union’s savings tax directive, which now extends through the United Kingdom to its traditional overseas territories, (Channel Islands, Isle of Man, Bermuda, et al).

But offshore “tax neutral” jurisdictions still have a great appeal for investments, banking and the use and creation of tax-free legal entities. It’s finally getting through even to the thick heads of the prejudiced media that tax havens are way ahead in financial reforms, especially compared to the places that are the major money laundering centers of the world — New York and London.

Eye Opening Statistics

To prove that the state of the offshore world is improving, certainly not diminishing, Professor William H. Byrnes IV of the Thomas Jefferson School of Law in San Diego, California, has written an interesting piece in the current issue of Offshore Investment.

He shows that since 1998, the offshore financial services sector client base has expanded with the number of high net-worth individual (HNWI) clients having more than doubled to just over 10 million individuals. Their offshore assets have also more than doubled, from US$17.4 trillion to US$40.7 trillion.

In the next four years, the value of HNWI clients’ assets is projected to grow abother 50% to nearly US$60 trillion. The average HNWI, excluding the value of primary residences and collectibles, is now worth more than US$4 million. HNWIs banking and investing offshore has expanded their assets from US$5.8 trillion in 1998 to US$11 trillion in 2008.

All this impressive offshore growth has come in the face of negative attacks embodied in the OECD phony blacklists and their “anti-harmful tax competition” campaign, the 2001 U.S. Internal Revenue Service Qualified Intermediary (QI) rules, signing of U.S. Tax Information Exchange Agreements (TIEAs) with numerous offshore centers, the European Union tax savings directive, and the Financial Action Task Force’s (FATF) zealous efforts at curbing alleged money laundering and terrorist financing.

Join the Offshore Movement

Capgemini Merrill Lynch’s World Wealth Report 2008 describes exactly what the Sovereign Society always has recommended; that people of even modest wealth should establish relationships with offshore wealth management experts and advisors who can help you navigate complex strategies in personal and family finances, business partnerships, tax savings and smart estate planning.

On a related point, I am often asked about the possibility of the U.S. government imposing currency controls.

Some experts see all these anti-offshore initiatives as a thinly disguised effort to block the capital flow from OECD countries to independent financial centers such as Switzerland, Panama, Dubai, Hong Kong and Singapore. Dr. Marshall Langer has suggested that the OECD’s anti-offshore attacks, combined with the incessant PR campaigns to demonize offshore tax havens, is in reality an attempt to re-impose the hated currency exchange controls of the pre-Thatcher/Reagan era.

Act Now, While You Still Can

Certainly with the radical anti-offshore legislation sponsored in the U.S. Senate by Senator Barack Obama, his election as president could well be followed by, not only currency controls, but government controls on offshore financial activity of all kinds, a course he repeatedly has advocated.

In my opinion the appeal of low and no tax havens is as strong as ever before, plus the current world economic problems dictate financial diversity offshore.

The place to find out about the offshore world is right here — at the Sovereign Society — while you still can go offshore.

PS: Setting up your offshore plan takes time and effort. And that’s why we at The Sovereign Society started the Offshore Advantage Academy two years ago. To bring some of the biggest names in offshore banking together in one place and make it easier for our members to access all the benefits of the Offshore World. Join me and The Sovereign Society’s Council of Experts in sunny Cancun, Mexico to learn everything you need to know and to get the ball rolling on your offshore plan as soon as possible. Enroll before October 13th and receive a special discount.

Posted in RSS