As we often point out here at Q Wealth, there is really no need to engage in tax evasion – the illegal way to pay no taxes. Governments are getting desperate. The penalties for getting caught are just not worth it.

I was sitting in a cafe the other day, in a little tax haven country (Malta to be precise… check our article on residence in Malta: Malta, Little Known Tax Haven Within the EU), having just this conversation with another expat. Why on earth, we agreed, would anyone choose to remain in a high tax country and pay taxes against their will, when they could so easily move offshore or live internationally? The quality of life is better offshore, provided of course you do your research. There are countries that are great for business, countries that are great for kids, etc etc.

And you can still legally earn money in your home country, from your existing business, without paying any tax. How? By working from overseas. I found this example on Vernon Jacobs’ excellent Jacobs Report tax site.

QUESTION: Assume that a US citizen renounces citizenship and is now a sole citizen of the Federation of St. Kitts & Nevis. That person has an IBC in Belize through which he advises companies in the USA for a fee. However, that person does not physically need to be in the USA to perform the services and has no bank account in the USA. The Belize IBC doesn’t pay Belize taxes on the advisory income. If the Belize IBC pays a salary to the citizen of St. Kitts, the St. Kitts citizen doesn’t pay taxes in St. Kitts on the salary. Does the US government have any claim on this revenue stream?

ANSWER: No. An expatriate (one who has renounced US citizenship)  is not subject to U.S. tax unless the income is deemed to be U.S. source income. Income from services is subject to tax in the country where the services are performed.

Therefore, provided the services are performed from offshore, the income is completely tax free.

The same principle applies in the UK, only UK citizens don’t need to renounce citizenship – they simply need to leave the UK and establish residence elsewhere. A UK Limited Company may have a full time employee, director etc working outside the UK. Provided that one is careful not to perform the job in the UK, then no tax is payable on the salary – which, of course, remains tax deductible in the UK company’s books.

With the ease of remote working by phone, over the internet, videoconferencing, Skype etc today – it is so easy to avoid taxes. Tax avoidance is completely legal and is good business practice.

Using Q Wealth’s information, you too can learn the details of using offshore companies to protect your assets and grow offshore wealth. If you are not yet a subscriber to Q Bytes, our free weekly newsletter, please sign up now by clicking here.

A guest post by Jeff Clark, Senior Editor, BIG GOLD. I suggest you read this. Yes, it was written to sell you something. It’s something we here at Q Wealth endorse and believe in because we think there’s a lot of good points in the following article. It’s written about events in the 1970s, about bank nationalizations, about paper money that becomes worthless, checks drawn on banking systems that no longer function… could it happen in your country today? You decide. Enjoy.

In 1975, as Saigon was falling, South Vietnamese refugees were air-evacuated into Guam and the U.S. The company Deak-Perera was hired by the State Department to serve as the official “money changer” for the refugee camps, and it quickly became apparent to the employees that even the most prominent of Vietnamese citizens arrived with nothing but the clothes on their backs and whatever belongings they could carry. It was a somber scene.

The problem facing the refugees was that the banks in their home country had been nationalized (along with most everything else in the economy), meaning they couldn’t write a check that was cashable. This presented obvious financial roadblocks for many of them, who were already dejected about their circumstances and insecure about the future.

Perhaps the most dramatic example was a successful Vietnamese businessman and his family who had been uprooted by the war. Though his suit was haggard, it was readily apparent the man had been wealthy back in his home country. He approached the exchange desk with two large suitcases full of piasters, the paper money issued by the Republic of Vietnam. The Deak-Perera worker, Michael Checkan, gulped and, with as much empathy as he could muster, explained to the refugee that piasters no longer existed. They were worthless, and the employee could not give him any money.

The reality of the situation visibly struck the man, and his face suddenly looked like he’d been told he had 30 days to live. He protested, but there was nothing the company or Michael could do. The currency simply wasn’t worth anything. The man was broke, in spite of suitcases full of his country’s money. As he trembled, his wife began crying and the children became frightened. They shuffled away, hopeless.

Later that day, Michael had another well-dressed refugee approach the exchange table with his family. He carried a ragged satchel, and explained that he had been a banker in Vietnam. As the man began pouring the contents of the bag onto the table, Michael braced himself, knowing he would have to explain that piasters could not be exchanged for anything of value.

His mouth dropped open, however, when he looked down and saw, gleaming in the sunlight, stacks of 24-karat gold TAELs, a form of gold bullion indigenous to South East Asia. They looked like wafers, thin sheets of gold delicately wrapped in paper. Each TAEL was .9999 pure gold and weighed 1.2 ounces. The man had dozens and dozens of them.

Michael peered back up at the man; he was brimming with hope. The employee calculated the bullion’s value and moments later bought the gold TAELs, issuing the refugee a traveler’s check for a large amount. The family hugged as they walked away.

As an American, you may not have to flee your country due to a military conflict. But there is something far more likely; you may have to flee your currency. There are many threats to your hard-earned wealth, and the most insidious is a weakening of the U.S. dollar.

For the United States, the invoices are piling up. Out-of-control government spending, rising healthcare costs, increasing entitlement programs, burgeoning military expenditures, etc., all add up to a number well in excess of revenue. The only politically acceptable solution is to print more money and devalue the dollar. The money you use for everyday life will buy less and less over this decade. Remember, as gold rises, it essentially means the dollar is losing value, eroding the purchasing power of every greenback in your wallet.

If you own any form of gold, you are already well aware of those facts. But have you considered the implications of traveling with that gold?  Sure, coming from Vietnam in 1975, you probably got barely a sideways glance for carrying gold TAELs, or even a suitcase full of cash. But today, in the age of TSA “love tap” pat-downs and full-body x-ray scanners, and when you must declare any amount of cash over $10,000 on your way in or out of America, leaving the country with a stack of gold bullion is probably going to raise a few eyebrows – if not land you in a TSA backroom somewhere.

That’s why it is important not just to own gold, but to consider owning it in various forms that give you both discretion and portability. There is no substitute for gold bullion, but there are far more portable alternatives, and which are far less likely to raise eyebrows (sure, numismatics are collectibles, but good luck explaining to customs the difference between a Gold Eagle and a Saint Gaudens).

Take 24-karat gold jewelry, for instance. To the casual observer, or the TSA agent, it’s not unlike any other necklace or bracelet. To you, it is a portable store of wealth. A “money belt” customs will ignore. And a great insurance policy should you find yourself in need of money on the road.

Not only does 24K gold jewelry make moving with your money simpler, it also makes giving wealth to heirs or as a gift simpler. In fact, there are a number of advantages that are frequently overlooked: it’s significantly cheaper than most numismatics and carries far lower premiums than traditional gold jewelry; it’s subject to less of the complexities of taxes; it’s more accessible than gold stored in a vault or certificates that take time to redeem; and as jewelry, it would avoid gold confiscation if that ever came to pass again.

Unfortunately, you are not likely to find real 24K gold jewelry of any significance in your local mall’s jewelry store. Instead, they are probably selling 14K gold, and at premiums of 100% or more to the value of the precious metal. It’s simply not practical to use designer jewelry as a store of wealth –-  you won’t find a numismatic-like resale market for that Tiffany necklace.

Instead, you need to find a dealer that can provide you with pure, certified 24K gold jewelry that was designed specifically for use in passing down or traveling with your wealth, and at a reasonable markup. It helps if the jewelry uses a common unit of measure as well … each piece being an ounce or in some way easily divisible. That way you can quickly account for how much you have, and if the time ever came where you needed to sell it for emergency cash like our Vietnamese friend above, you could easily do so.

At Q Wealth, we’ have found just such a partner with First Collector’s Guild, which specializes in 24K gold jewelry for people who think like us and value portable wealth.

If you own bullion or any other form of gold, consider how portable it really is. A little forethought and you may just realize it’s not all available the moment you need it. If that’s the case, a little bit of portable wealth protection might be in order. 24K jewelry is not an investment, but in the right circumstances it can be a great form of insurance.

But don’t mistake it for just bullion; this is beautiful jewelry: These pieces are very elegant and sophisticated. It’s something you can enjoy for many years and generations to come. And they’re perfect for gifts. Which, of course, is why we are writing about them at this time of year.

If you want attractive, wearable bullion that allows you to store value safely, then 24K jewelry is it. And it might be just the right way to sneak some gold into a loved one’s stocking this year!  But hurry:– since every one of the beautiful necklaces and bracelets is custom-made, you have to order by December 10 for delivery by December 25. To see all the different choices you have and learn more about Heirloom jewelry, click here.

I continue to get lots of mail about the new USA-Panama Tax Information Exchange Treaty that was actually signed last week and was the subject of my earlier blog posting. This has certainly stirred up a hornets ne’st in terms of Panamanian offshore banks, law firms and corporate service providers.

One thing that is rather irritating as a writer is when people say “such and such a person doesn’t agree with you, here’s the link” … when in fact they don’t even know what I think, and the person writing the other link probably also has some hidden agenda like collecting taxes, or like selling consulting services to move to another jurisdiction.

What I said last week was in essence that while I hadn’t seen the treaty yet, I didn’t think there was cause for immediate alarm for my clients. I also explained that I had written an article explaining my position in the next Q Wealth Report that is due out next week in the Members Area.

Now the treaty is actually signed and published. You can download it here. Perhaps the most surprising thing about it is that it is retroactive to 2007. That is, the US can now demand information dating back to 2007 from Panama relating to tax investigations. Panama, in theory, can demand the same from the US on Panamanian tax evaders.

This is certainly bad news for those American taxpayers who may have set up non-compliant structures in the past and opened accounts with Panamanian banks. Such individuals need to take expert legal advice urgently. With the approaching holiday season the few US attorneys who actually know anything about this are going to be super busy/unavailable. I hate to say I told you so, but the people in trouble are going to be the ones who tried to save a thousand bucks on set-up fees by going with cheap internet-based ‘lawyers’ who try to sell important financial structures as if they were groceries.

In the case of our consulting firm, we can refer clients to licensed US attorneys if necessary, but we like to do a confidential consultation through our firm first. This generally saves the client a lot in attorney’s fees compared to going direct to an attorney, as we are able to brief the attorney fully on the situation. Sometimes we can even do so anonymously.

Let’s be very clear on one thing. Neither Q Wealth nor my consulting firm has ever recommended tax evasion. We find the principle of stealing people’s privacy in order to collect taxes to fund things like bailouts, unnecessary wars and high level corruption extremely distasteful. That is the direction we are coming from. But if you want to live in or be a citizen of a country, you have to follow its rules. Not to do so would be plain stupid, because they are more powerful than you are.

IT’S SO EASY TO OPT OUT OF TAXES LEGALLY

It’s really so easy to opt out of taxes and government control legally if you don’t like things the way they are. Americans have it slightly harder than our other readers because they have to opt out of citizenship, not just residence. This, of course, is unjust in itself. Anyone else can just make the move.

There’s a world of choice out there. First there are the well-known tax havens like Monaco and Andorra. Several of our clients have gone down to Nevis recently in search of instant second citizenship that come with purchasing real estate there. Then there are countries like Dominican Republic or Paraguay where it’s cheap to get a residence permit, you don’t have to stay there much, and there are no taxes on foreign sourced income. Then, there are mainstream countries like France, Spain or Canada where – with good pre-immigration offshore tax and asset protection planning – a foreigner can live almost tax-free and unmolested.

I would take this opportunity to remind you that if you are looking at citizenship and residence in Paraguay, I’ll be there in January. Why not make it your new year’s resolution to obtain an official foreign residence and start the clock ticking on a second passport, that could solve all your troubles once and for all and help you sleep better at night? Details here.

“THE OECD STUFF IS A FIG LEAF, A DIVERSION”

While we are on the boring but somehow important subject of tax information exchange treaties, here’s something interesting that happened this week, that was not widely reported.

Tax Justice Network is a group who want all the world’s governments to join together in collecting taxes. Apparently they believe that if there were no tax competition, no bank secrecy and a ‘level playing field’ when it comes to taxes, there would be no poor people in the world any more. Such utopian ideas may appear beyond help to pragmatic realists like us… but they do have an interesting blog.

This week, they finally admitted they might be wrong. An anonymous person, not me but someone clearly benefiting from an intimate understanding of private banking and politics, wrote them a tirade which I agree 100% with – and they admitted might actually be right. Here are some selected extracts:

The OECD stuff is a fig leaf, a diversion. The real power mongers want the whole system to keep going, and to put out these diversions. While they are all doing all this stuff for the popular press, for the NGO world and Civil Society who don’t know how it works from the inside – at the same time they are saying to their clients (as on the BFSB website) ‘all is hunky dory in the world of confidentiality.’ They are all saying to their clients: it is business as usual.”

It is a fee-earning opportunity too – I don’t have any statistics on this – but you can say to your clients: ‘just for an extra level of safety, we can restructure your accounts to this or that other centre, or in this other structure’, and then they can charge fees for it.

You can read the whole blog entry here. I suggest you do.

This is Peter again. Panama is a country with an amazing amount of intrigue. I think it has something to do with the heat and humidity. Personally, I love it. What is said on paper is not usually what happens in practice. Once you understand that, and combine it with other countries to create a multi-jurisdictional structure, you can turn it to your advantage. If you don’t understand how Panama works, it is dangerous.

All this hype about tax treaties, that came out of nowhere a week or two ago, is certainly a diversion. If the US had wanted tax information on US citizens from Panama before, they could have got it just as easily as they will now be able to get it. This is all about show. The way is now paved for another round of the IRS voluntary compliance program that has been targeting Switzerland and UBS until recently, and we will certainly see more of this and other jurisdictions targeted during 2011.

In the meantime the USA will continue to haemorrhage funds, because smart businesspeople (and Americans are nothing if not smart business people) see that their money will be better off elsewhere.

TJN ended by quoting the latest Le Carre novel:

“Money’s got no smell as long as there’s enough if it and it’s ours. Above all, think big. Catch the minnows, but leave the sharks in the water. A chap’s laundering a couple of million? He’s a bloody crook. Call in the regulators, put him in irons. But a few billion? Now, you’re talking.”

Bear all this in mind when you look to manage your wealth and offshore investments.

If you haven’t yet read our Free Report on Panama, do so now. It explains some of the hidden truths of doing business in Panama. It was written before the tax information treaty was announced, but it’s still essential reading for anyone looking to invest offshore in Panama.

by Peter Macfarlane for The Q wealth Report

It’s ironic that while residential and commercial real estate investors must take much of the blame for the current crisis, some of the best offshore investment and asset protection opportunities right now involve international real estate.

International or offshore real estate should be part of any savvy investor’s portfolio. Why? Because it’s a great hedge of value, a way to protect the real underlying value of your assets during difficult times.

With Quantitative Easing in the USA and Irish banks the latest in a long line of European bailouts, it doesn’t take a genius to work out that the dollar and the euro are both going to lose value over both short and long term.

With the dollar and euro collapsing, those seeking a safe haven have turned to investing in gold. I believe gold will still go much higher, or the dollar will go lower – whichever way you look at it. But I also believe it would be irresponsible to put your entire net worth into any one thing… gold included.

Real estate, when purchased at its real value as opposed to an inflated, easy-money value, is an excellent hedge. People will always need somewhere to live, and – even more to the point – people will always need food. Food requires agricultural land. As farm subsidies in major economies, like Europe and the USA, are necessarily pruned back, more agricultural production will move to emerging economies. South America, for example, is very well positioned to capitalize on this. Myself and a few clients are putting funds right now into a Hong Kong-based private fund investing in agricultural land in the Southern Cone of South America: Uruguay, Paraguay, Brazil and Argentina in particular.

There are also great bargains to be had investing in international residential real estate at the moment. Some prime properties in Europe, for example, are going at ten percent of their former asking prices. Even assuming they were wildly overvalued before, this now represents a fantastic buying opportunity.  Rather than watching the value of your dollars being eroded daily, you can hold real estate that is virtually guaranteed to increase in value over the long term. Smart real estate investors know they can also flip these properties quickly if they have bought well.

The key to international real estate investing, in my view, is common sense. Buy something that has intrinsic value. Residential property in the downtown areas of most major cities, for example, will always be in demand. Buy in cities where you can see growth.

Farmland also has an intrinsic value. With more and more mouths to feed in the world, I think buying cheap agricultural land is a great investment at the moment. If you are not yet ready to buy a ranch, there are ways you can get in to such opportunities via reputable third party investment managers, private offshore hedge funds and the like.

There is, however, a big mistake that many novice international real estate investors make. I would strongly caution against is buying into new developments in ‘exotic’ countries, especially buying off plan or touristic/retirement style developments. Buying intrinsic value means buying what can you see right now – not what a developer tells you will be there five years from now.

Too many retirees end up paying through the noose for lots that have barely been marked out on the ground and have very little infrastructure. They make the mistake of trusting a developer who speaks their language, or who has been recommended by nominally independent third parties or internet promoters who are in reality getting large kickbacks. They don’t talk to locals and see how much a lot the same size a few hundred meters down the road would cost – if they did, they might be in for a shock!

When buying in a planned retirement or touristic community, you must also consider that you will realistically be unable to resell before the developer has sold off the entire project – something that could take years in the current environment. The safest investment deals in international real estate right now are undoubtedly in existing properties – those that have already been built and are in established, popular locations.

The smartest real estate investors, when going into a market they don’t know, will actually rent a home and spend time there on the ground before they even consider buying. It may takes weeks or months and the patience to listen to all kinds of conflicting opinions, but gradually they will build up an intricate ‘insider’ knowledge of how the chosen market functions. Remember: this ‘on the ground’ form of due diligence is best.

One final word of advice: the best deals are not on the internet. The best international real estate deals always go before they are even advertised. Unlike stock markets, with real estate insider trading is the norm not the exception. The only way to find these best international real estate deals is by getting to know the right people in the right places and asking around.

If you would like to be kept up to date on international real estate investing opportunities, please sign up today for our free weekly newsletter Q Bytes.

Executive Summary in two lines: Panama has announced plans to to sign a tax information exchange treaty with the USA next week. Should you be worried? If you’ve followed our advice in the past – no. If you’ve set up a non-compliant Panama offshore structure, then it’s time to review it – start here. But Panama remains an excellent place to incorporate your Foundation or IBC.

Here’s my view of TIEAs. Tax information exchange agreements (TIEAs) are usually printed in black and white, and they nominally promote transparency. However, those are about the only aspects of these treaties that are black and white, or transparent. They are more about show. Politicians want to show they have achieved something. In reality, as I’ve said before,  most exchange of information takes place informally.

With the recent news that Panama has agreed to sign a tax information exchange agreement with the USA, I received, as usual, a flood of e-mails from worried clients asking “what should I do?” or “what do you think of such and such?”

Panamanian President Ricardo Martinelli is a smart guy, and in my opinion he knows what he’s doing. Don’t worry. He is not going to destroy the Panama financial services and banking industry, on which much of the Central American country’s economy is based.

I’ve already written a detailed article on this subject for the next Q Wealth Report that is due out shortly.

Those of us who grew up in major economies like the US or the UK tend to think that everything is black and white. However, most of the world doesn’t think quite like that – and neither do politicians anywhere. Politics is about horse trading. You give up something here, you gain something there. Perception by third parties (like voters) is more highly prized than substance.  And that is exactly what is going on here.

The reason for signing this particular treaty is to appease US left-wingers like Senator Carl Levin, who were threatening to block the US – Panama free trade treaty that was already approved some years back but has never entered into force. Obama can now claim credit for getting Panama to cave in on bank secrecy, even though they are doing nothing of the sort. On their side Panama, to quote verbatim their announcement, get to say:  “Panama has already reached 13 separate taxation accords with other nations. By signing those deals and the one with the US, we’re going to get the certification of the world that Panama’s banks are trustworthy.”

Panama and the US need this free trade agreement. Both governments agree. Panama, whose economy is anchored by the Panama Canal, has a service-based economy and is one of the few nations that run a trade deficit with the US. This in itself demonstrates Panama’s strength. It is very different from the other economies in the region who are dependent on the US. American companies shipped $4.3 billion in goods and agriculture products to Panama last year and imported $302 million.

This Free Trade Agreement is going to make it much easier to operate internationally with Panama companies. Once it is signed, the US can no longer discriminate against transactions with Panama companies. In this regard it is excellent news.

But the most obvious benefit of all: Panama won’t be blacklisted. It will have the full ‘certification of the world’ as they call it. This can only be good for the long term future of the offshore finance industry in Panama.

But what about information exchange on beneficial owners who don’t want to be identified?

First of all, this mainly affects Panama banks. We’ve always been careful to advise clients, especially Americans, against banking in Panama. We always said, take your Panama corporation and foundation and bank elsewhere, like in Europe or Asia. Similarly, Panamanian banks have always been notoriously reluctant to do business with Americans.

Even in light of that, Panamanian corporations with accounts at Panamanian banks are domestic, resident Panama business as far as the law is concerned. Nobody is suggesting revealing this information to the United States or any other country.

Secondly, we’ve always advised readers and clients not to do business directly with law firms in Panama, but rather to buy a Panama company or Foundation through a law office in another jurisdiction. Panama has never required us to pass beneficial owner information, so nobody in Panama knows anything about the beneficial ownership of Panama companies set up through my firm, for example. There is no information to exchange. We particularly like Panama because most offshore jurisdictions do require beneficial ownership information. Panama doesn’t. Panama still allows bearer shares.

Panama is apparently attempting to pass legislation, again to please the gringos, that will require identification of beneficial ownership of corporations. This will be practically impossible.

First of all, Foundations do not have owners according to Panama law. Corporations of course do. However, the companies register in Panama goes back to the 1920s. Unlike other jurisdictions, companies are never struck off the register for non-payment of annual dues. It is a practical impossibility for anyone in Panama to identify beneficial owners of companies that technically exist but might have disappeared or stopped trading decades ago.

Well, there will be much more information in my article for members: there are a few other tips and tricks that I don’t want to publish on the public internet for obvious reasons. I’m reminded if the French proverb plus ça change, plus c’est la même chose. The more things change, the more they stay the same. That is the case here. There will be some minor positive changes we as offshore planners can take advantage of. There will be some minor negative changes we can easily get around. Nothing significant is changing, but the politicians on both sides can hail a victory. Perhaps the perfect political deal?

If you wold like to be kept informed of news like this, please remember to sign up for our free weekly e-mail newsletter, Q Bytes.

It’s almost a year since I wrote the original article How to Open an Offshore Bank Account in Singapore, and it has consistently been the most popular article on the blog archives almost since day one. I have been thinking for a while, therefore, that it was time to revisit the subject of Singapore offshore bank accounts. Then finally I was stirred into action by my friend Simon Black, who is in Singapore at the moment. Simon wrote an article this week on Why Singapore is the ‘Easiest Place to be an Entrepreneur.’

Do you want to open a bank account in Singapore? How can you do so as a non-resident? Do you need to go there or can you open your multi-currency account by mail? These are some of the questions I’ll be answering in this article.

The city-state of Singapore has developed in recent years into one of the best private banking jurisdictions. But besides targeting their traditional but fast growing market of wealthy Asian business people, the best offshore banks in Singapore today are also developing products and services tailored specifically for North Americans, Europeans and Aussies. Despite the big time zone differences, Singapore’s business culture and use of the English language makes this easier.

While in most of the world opening a bank account seems to be getting harder and harder, in Singapore it is actually getting easier!

Ask anyone in Singapore what the easiest way is to open a bank account as a non-resident, and they will almost certainly point you in the direction of one of the foreign banks. Citibank, for example, is a major player in Singapore and you can contact them via their site. They will return calls to wherever you are in the world.

I’ve always liked Citibank. Citibank is culturally very different from most American banks, having a much more international outlook. Back in 1897 they were the first US bank to establish international banking operations. Whereas most US banks don’t even allow you to send an international wire transfer online, today nearly half of Citibank’s branches and offices are outside the USA. Wherever they go they settle into local banking culture and generally offer excellent internet banking, credit cards, 24 hour call centers and the like. They are completely comfortable doing business in multiple currencies – something essential in Singapore’s business and banking environment.

Citibank, like other international banks that are big in Singapore – HSBC, ANZ or the British emerging markets bank Standard Chartered for example -  would be ideal for those who cannot travel to open an account. The process would be first to contact the Singapore offices, then ask about procedures for certifying documents in an overseas branch or affiliate that is located near to wherever you are. Big international banks can generally arrange this – even more so if your investment is substantial enough to qualify for a premium service like Citigold ($1 million minimum in Singapore) or HSBC Premier.

However, if you are looking at banking offshore for privacy reasons, you’ll probably want to avoid American banks. Citibank will, for example, require a social security number from US citizens or a National Insurance number from British citizens, and will likely make you sign a waiver of Singapore banking secrecy law, allowing them to make reports to your home country authorities, as a condition of opening the bank account.

Whilst I hope none of you would be unsophisticated enough, given all the how-to info on this site, to rely on banking secrecy to hide or fail to report a personal account… I still think it’s undesirable that you should have to waive legal rights that are there for your protection, if it’s not absolutely necessary.

One international player that might be less subject to pressure from foreign governments in Standard Bank, a South African bank that has established a significant presence in emerging markets from China to South America. Standard Bank should not be confused with Standard Chartered Bank by the way – they are different institutions.

Ultimately, however, the best confidentiality is to be found with local or Asian market banks. OCBC Bank for example (Overseas China Banking Corp) would be a good place to start. They also have an excellent online trading portal, iOCBC. Last time I asked, they did still accept offshore brokerage accounts for US citizens, though given the provisions of the HIRE Act, who knows how long this will last.

During the coming year I’ll be focusing more on Singapore banking. I’m looking forward first to Simon Black’s Sovereign Man workshop in Panama in February, which is a chance for those from the American continent to meet Singapore bankers in person without flying right around the world. Then, I’ll likely be attending the Shorex Singapore event for offshore professionals in April. If you are going to be in the area, let’s meet up.

If you are not yet a subscriber to our free weekly Q Bytes newsletter, be sure to sign up here right now, and I’ll inform you via the newsletter as soon as our updated Singapore report is available. In the meantime, paid up Q Wealth members are welcome to contact our offices for referrals to more discreet private offshore banks that wouldn’t want their names publicized here. We also now have a great provider for opening accounts in Hong Kong and we can make referrals on request.

The following article by Peter Macfarlane appeared in this week’s Q Bytes, our free newsletter dedicated to international asset protection, offshore wealth creation, investing and private banking. We are republishing it here on the Q WEalth blog as we feel it is of general interest. If you would like to receive future editions of Q Bytes free of charge, be sure to sign up here.

Hardly a week seems to go by at the moment without Gold being a hot topic here at Q Wealth. But this last week has been an especially rough ride, with gold ‘pulling back’ quite substantially. Is this cause to start crying, or is it an opportunity to stock up on gold?

I thought this week I would briefly discuss some divergent opinions and strategies on gold, and propose a couple of solutions that I believe will put readers into profit.

A reader from California recently wrote me:

“Thank you, Mr. Macfarlane, for accepting my divergent opinion in good spirits….” he begins. Well, everyone is entitled to their opinion and as I always say, I may be wrong! I may be way off track. Maybe Bernanke and Obama will save the world shortly and we’ll all live happily ever after. I doubt it, but anyway I am one of the biggest believers in the world in free speech and liberty of expression.

May I add an additional comment related to gold ownership in ones portfolio?” continues our reader. “When the market price increases from one day to the next, the purveyors of gold advise purchasing the metal for its price is only heading higher. When the price declines from one day to the next, the decline is characterized as a ‘buying opportunity’. One thing is consistent among the purveyors of gold though, they never – repeat, never – issue a “_sell_” recommendation? It’s always buy, buy, buy.

And, least I forget, if one truly believes that the market price of gold is headed higher, why not purchase a gold futures on contract on the Chicago Mercantile Exchange? – which can be rolled over for a distant contract indefinitely. The CME affords the trader enormous leverage on such futures contracts, and there’s no applicable interest charge for the market price that exceed the initial “earnest money” deposit. And the traders’ earnest funds can be in the form of Treasury bills, which are segregated from the funds of the futures merchants account.

Well, I guess we are coming at this equation from polar opposite perspectives. This reader is clearly valuing his gold holdings in US dollars. I do the opposite – my base currency is gold, and dollars are a forex speculation for me, just like euros or yuan or Paraguayan guarani.

My reasoning behind this is that gold is the stronger currency, that has been around infinitely longer than the dollar. The dollar is ‘fiat’ money (see for example these earlier articles) that is created, figuratively speaking, by a printing press currently controlled by Bernanke and partners. The dollar can come and go, but gold won’t. The purchasing power of an ounce of gold has been pretty much constant for generations – whereas the same can certainly not be said for the dollar.

What is the dollar backed by?

One of the better arguments for the backing of the dollar that I’ve heard recently, is that it is backed by the work and entrepreneurialism of the American people. There’s some truth in that. Basically if they keep working hard and handing over the fruits of their labour to the government, there is something of value backing the dollar.

I’m just not sure that those hard-working American people really agreed to have their futures – and that of their sons and daughters and grandchildren – mortgaged in this way by a small subset of politicians and banksters. Maybe it was like the sub-prime mortgage borrowers who didn’t really understand what they were getting into. Cheap and plentiful short term money trumped long term prudence. And we all know how that ended up. Now we are just seeing a much expanded version of it.

I’m far from convinced that investing in the dollar is good business. If it were a case of supporting a stock of a company where the management were borrowing to the hilt for short term fun, while treating stakeholders reprehensibly and not giving a damn about the future, there would also be an ethical argument against getting involved. And I don’t see why governments should be treated any differently than companies. Abuse of the American people is not something I want to get involved in, any more than I would support abuse of cheap labour in Asian shoe factories.

Now I know this may be hard to swallow for people who have valued everything in one reference currency – be it dollars, or pounds or something else – for their entire lives. It is quite a leap of thinking. But it’s totally possible. You need to become a Sovereign Individual, not reliant on any particular country or currency. You need to think in different currencies and look at all currencies, including the one in common circulation in your home country, from the perspective of an outsider. If you were from another country, would you be investing in that currency right now?

Of course, I am not talking about day-to-day expenses. You certainly need some local currency on hand to buy the groceries. Multi-currency credit cards per se don’t exist, but you can easily, for example, obtain a regular credit card billed against a multi-currency bank account. You can sign charges in any currency you like, converting only what you need at that moment. You’ll find information on this, including how to open a foreign multi currency bank account in some of the world’s safest and best offshore banks, in the Practical Offshore Banking Guide 2010

The Dollar Bear Market Continutes

With that in perspective (that I value currencies against gold, not the other way around) let’s get back to the reader’s question. I don’t see so much of a gold bull market right now, as a dollar and euro bear market. My personal view (and there’s no substitute for taking professional advice here) is that this situation will continue as is for the foreseeable future.

Wild swings are caused by day to day speculations, but don’t affect the overall trend. So to turn it around, I believe the price of gold valued in fiat money will continue to rise, and will do so significantly. The more Quantitative Easing that takes place, the less the dollar will be worth. This is what I have written about in the past: stealth devaluation. If there’s more of something, it’s worth less. This logic is hard to argue with.

After all I’ve said above, you can probably figure that US Treasury Bills are the last thing in the world I would want to sink my money into. For me, that would be like buying bonds in a company that I know is about to go bankrupt. Unfortunately, as Ron Holland has explained in the report Are You Ready for the Coming Obama Retiement Trap (available in the Q Wealth Members’ Area) that is exactly what US retirement funds are being encouraged, even forced, to do. This is a seriously scary prospect.

As for buying contracts on the CME, well why not… I’m all in favour of speculation. There are lots of ways you can obtain leverage through brokerage accounts within the system. I keep a large portion of my personal wealth in physical gold, safely outside the financial system. I also keep a ‘play money’ account that I leverage to the hilt and buy financial contracts like this with. It’s doing rather well at the moment. But it’s money I know I might have to lose, for example if a sudden catastrophe hits and the financial markets are closed down. I would put the odds of something like that happening in the foreseeable future at perhaps 15% – 25%. Not a huge risk, but definitely not one I would bet my entire net worth on.

The fact that you can roll over CME contracts indefinitely is part of the problem, of course. It’s extremely likely that the counterparties would be completely unable to fulfill their obligations if everybody wanted to exercise their right to physical gold at once. The whole system relies on punters rolling over.

So, why I don’t like the idea of buying gold futures using T-bonds as earnest money? Because you are using one form of promise to buy another form of promise, when nobody – not even the people involved, I am sure, if you could talk to them and get a straight answer – would really earnestly claim that the promises are backed by anything of value. That is just unsustainable in my view. You might make short term paper profits, yes. Fine… I have nothing against speculation, just as I have nothing against casino gambling – but when I go to casinos I just enjoy the ambience, I don’t gamble.

If you want to use leverage to speculate on the price of gold, here’s what I would do. Get yourself a regular brokerage account that allows you to trade on margin. Get yourself a subscription to Casey’s International Speculator – they even have a 25% discount offer running at the moment. Casey’s International Speculator is one of the longest-running, most respected newsletter services of its kind anywhere, so it’s got a track record. It was founded by Doug Casey, self made international man.I have a subscription and consult it frequently. Then go speculate. That way you’re investing in companies that actually have intrinsic value, rather than pure promises.

At the end of the day, it’s big picture against small picture, short term against long term. We live in interesting times. Enjoy the rest of your weekend!

Once you’ve secured your assets offshore in a protected structure, what next? How do you put them to work for you? How do you really ‘create wealth offshore’?

Certainly there’s no point in keeping much cash in an offshore bank account. Interest rates are at record lows, and offshore banks typically pay lower interest rates even than what you are used to offshore. Precious metals like gold and silver are an essential part of any portfolio… but you don’t want to keep all your assets in those, either. Stock markets are good for speculation with a small amount of capital, but frankly they are so manipulated that you as a small player will depend more on luck than judgement.

That leaves one asset class that we haven’t covered for a while: alternative offshore investments, like private offshore hedge funds. I’m moved to write about these because in the last week I’ve come across a couple of interesting opportunities from people I trust.

A WARNING AND CAVEAT FIRST
Those last three words are very important: ‘people I trust.’ Offshore investments are generally subject to little or no regulation. They are intended for sophisticated investors. Unfortunately there are some people out there who are just bad investment managers, and worse are outright offshore investment scams, so you need to go with people you trust.

The good thing, however, is that with alternative investments you can have a much greater involvement with management. You can typically get to interact and meet with managers. One of the opportunities I heard about this week even includes the fringe benefit of being able to use properties owned by the fund in South America.

So it’s all about finding people you trust. The very best way to do this is to get on a plane and do your due diligence in person, seeking second and third opinions along the way. Fortunately, there are people who can point you in the right direction by providing you with the benefits of their research as you start off. In this week’s free Q Bytes newsletter that has just gone out to subscribers, I mention three such people. I won’t name them here because I want to respect their privacy, but if you don’t want to miss out in future, be sure to sign up for Q Bytes.
FOR SOPHISTICATED INVESTORS ONLY

When investing in this kind of opportunity, who you know is everything. Funds like this don’t accept investments from the public, and even less from US residents unless they can certify themselves as sophisticated investors. Fortunately, such limitations don’t apply to participations from entities like Panama offshore corporations, Panama Foundations, or offshore LLCs, though entry levels are typically six figures.

I’m keen on Latin America not least because of resource investment opportunities. And earlier this year a number of Q Wealth readers got involved via Linda Dixon, our long-time  friend from Canada who moved into the gold and silver business in Peru and few years ago, with an alternative investment in a silver mine. These investments are coming to fruition now with huge returns. I talked to Linda a couple of weeks ago and she is preparing some interesting articles and videos for us, that will be available shortly in the Members Area.

If you don’t yet have access to our Members Area, you can see a summary of benefits (in essence, a list of all the info and tools you are missing out on) right here
Another trusted friend who has made a detailed study of alternative investments in frontier markets lately founded Alternative Latin Investor. Nate has been based in Buenos Aires for quite some time, and is just back from a four-month stint in Africa seeking to expand coverage of frontier markets over there. I’m trying to persuade him to join us on our residence, citizenship and investment trip to Paraguay this coming January.

Nate is putting on a very interesting webinar with some big-name experts on alternative investments in Latin America. It is scheduled for November 10th and requires advance registration – with an early bird discount before November 2nd.
NEW PETER MACFARLANE INFO SITE
Finally, just a notification that the new Peter Macfarlane & Associates site is finished. It’s nothing flashy or exciting, but explains a little more about why my consulting firm does in terms of corporate structuring, precious metals and second citizenships. Feel free to check it out at http://www.petermacfarlane.info

The following is an edited version of an article by Peter Macfarlane and a special offer that was published this weekend in our free weekly newsletter, Q Bytes. If you would like to receive Q Bytes every week (no obligation, and of course you can unsubscribe at any time) be sure to sign up here.

Yesterday I had a very interesting meeting with a personal consulting client at which we discussed physical gold and silver, the dollar and the euro. Particularly, how to buy physical gold and silver offshore. I think it will be very relevant to Q Wealth readers, so I’m going to tell you a bit about this meeting, and then offer you an ‘insider’ recommendation on physical precious metals free of charge.

This client, we’ll call him Jim, was in a great mood and treated me to a nice lunch. We talked about a recommendation we made in a Q Bytes free conference call earlier this year with Q Wealth Expert Linda Dixon, to get into silver: not only did Jim follow this advice and buy silver at around the $17.00 spot mark, but when he did so, he bought it at a 20% discount direct from the mining company. Now, with silver well above $23.00, he’s about to start taking physical delivery, something he’s keenly looking forward to. The best part is that all this was done without involving the banking system at all.

Buying silver and gold direct from the mine is something we’ve certainly heard about before, but Jim told me Q Wealth was the only place he had received the practical instructions and direct contact information necessary to make the purchase. In fact, this particular silver deal was a relatively small affair designed to test the system. I don’t quite know how much Jim put in, but the minimum was only $10,000. So this is really accessible to almost every reader.

But the story gets better (or worse, depending on your perspective.) Jim also told me about one of his buddies, Fred, an ultra high net worth investor who deals in millions and billions, who had tried contacted larger mining companies trying to buy gold direct – rather than through middlemen. He had been told that yes, they would be happy to sell him some of their production…. but he would have to join the line, behind the big buyers like JP Morgan and HSBC.

The same day, a new article by Jeff Clark of Casey Research arrived in my inbox, touching on the very same subject. “We’ve got it easy right now,” comments Jeff. “Click or call, and you can quickly and conveniently own a gold coin or bar. But if global concerns cause another panic or the dollar breaks down, you could find yourself standing in a line at the local coin shop or getting a busy signal. Simply … you may find it very difficult to get your hands on physical gold when that time comes.”

Don’t believe it could happen? Back in the 1980s it did. There were no precious metal ETFs in 1980, and the demand for physical gold was so great that you literally had to wait in line at a coin shop to buy, with plenty of occasions when you would have been turned away due to lack of inventory. And it happened again in 2008… you may recall we saw serious shortages, unexpected delays, and soaring premiums on gold coins towards the end of that year.

Jeff asks a simple question: “Given the fragile state of global affairs and the waiting-in-the-wings crisis for the U.S. dollar, I’ll be surprised if we don’t see another panic into physical gold. And the question is, will there be enough metal to go around when the public – 95% of which own none – wakes up and wants to buy it? Answer: No.” I do recommend you read Jeff’s full analysis here. And just skip ahead now if you want to get something we’ve never offered before – a copy of a presentation about physical gold and ETFs given to our delegates at the recent Q Wealth event in Ireland.

First, however, I should comment on the euro. Probably if you’re reading this, you are not surprised that gold is hitting new records and silver is shooting up even faster. What might have surprised you, though, is the Euro’s strength over recent days. Conventional wisdom, especially on US-based libertarian websites, is that the euro is doomed. So why is it getting stronger?

Here’s something else I learned in Cork. This is not analysis – it’s practical, on the ground experience. There we heard a presentation by real estate millionaire Thomas Bolther, who started investing into the German real estate market in 2006. Germany, Europe’s largest economy, is doing just great according to Thomas. Property prices have increased, interest rates are low, and there’s plenty of money floating around in the banking system.

An American delegate at our conference later commented to me that he was shocked. Shocked to hear that banks in Germany were financing 80-90% LTV on multi-family real estate units. Shocked to hear that the Euro zone was doing well, despite the dismal picture portrayed in the media that focuses on Greece and Ireland – two bankrupt economies that are tiny even by European standards.

The US dollar, however, continues to devalue. Some people say it will hold its value until after the 2012 elections. Personally I doubt that. The US continues to meddle in world currency markets and support quantitative easing – ie, printing more money. The opposition to this is growing in the rest of the world, most recently in the BRIC countries. (See for example BusinessWeek: Russia’s Kudrin Says ‘Too Early’ for World Currency Decision)

Now I’m not saying you should rush to put your money in the euro. Far from it. Paradoxically, the reason German real estate is doing so well is that Germans don’t want to keep their money in the euro. They too are worried it will collapse. Real estate in good locations in big cities is a safe haven for them. So, of course, is gold. Demand for both has skyrocketed in Germany.

In fact I’m not going to give you any advice here. I just wanted to present a few nuggets of information, based on personal experience of the last few weeks, that you probably won’t hear elsewhere.

Here’s something else you might be interested in too…

Our Q Wealth events are strictly ‘closed door.’ As a matter of policy, we don’t sell CDs and videos. We don’t even allow recording devices into the room. This is so our experts can speak freely. However, we’ve decided to make a single exception…

Frank Suess of Global Gold gave a very important presentation in Cork, explaining not just the benefits of his physical precious metals program (besides gold, they also handle physical silver, palladium, and platinum) In a specially prepared presentation, Frank also explained exactly why investing in Gold ETFs is an extremely bad idea, although he mentioned one, ZGLD, that is the best of the bunch.

I believe that Global Gold represents the single best way you can get into physical precious metals today.

After talking to Frank, we agreed that this is important information that we should get out to all Q Wealth members. Good honest people are being misled by Wall Street into investing in products like GLD, where the weight of the evidence suggests that the gold doesn’t exist at all. These structured products are brought to you by the very same financiers who brought you sub-prime mortgage securities a few years back. Now they are cashing in on folks seeking the safe haven on gold, by offering virtual gold – a numbers game.

Therefore, Frank has agreed to let us send you a copy of his presentation, converted to pdf format. You will be able to read through this presentation in about 20 minutes. After reading it, tell me if you still want to invest in gold ETFs!

If you are a Q Wealth member, you’ll find that we have just uploaded it to the Members Section. If you are not yet a member, I am so keen that you should see this that we are offering you an additional incentive – an extra $10 off membership if you sign up over this weekend (by Monday night). Just enter the discount code OCT10 in the box on the Q Wealth signup form here.

Numbered bank accounts don’t just exist in the movies. Discreet private banks are opening secret numbered bank accounts for their privacy-conscious wealthy clients more than ever before. Secret numbered accounts don’t just exist in Switzerland, but also in the best offshore banks in other European private banking havens including Austria, Singapore, Monaco and Andorra.

The main reason for this is probably recent high-profile data thefts by corrupt bank employees, hoping to turn a quick penny by turning over stolen data to foreign governments. A numbered bank account offers protection against the theft of data by corrupt bank employees. Although the holder’s identity is known to the bank, the files are kept in a safe using a paper based system accessible only to a few highly-trusted private bankers – typically the relationship manager and the branch manager. Anyone who may have access to the bank’s computer records only gets to see an account number – not a name.

Private bankers don’t, however, like to talk about these accounts!

“These accounts are subject to exactly the same duty of diligence as any other banking relationship,” UBS spokesman Dominique Gerster told swissinfo.ch. “We are obliged to know the origin of the funds and the identity of the beneficiary. If we receive a legal request, we can supply the authorities with information, just as we can for any other account,” he is reported as saying.

“We always know the identity of our clients, whether the account is a numbered one or not,” commented Jan Vonder Mühll, head of media relations at private bank Julius Bär in Zurich, in the same article.

“A colleague from another branch of our bank couldn’t discover the identity of a client who has an account with us,” an asset manager at the Ticino branch of a  Swiss co-operative bank told the swissinfo reporter. “Foreigners are now going for numbered accounts as a precaution…”

Apparently, smaller banks, particularly the independent co-operatives such as Raiffeisen banks, and the state-owned Swiss Cantonal banks which are both seen as bastions of strength, are profiting from the huge capital outflows at big international Swiss banks like UBS and Credit Suisse. Depositors feel safer dealing with smaller, more personal banks that better reflect the Swiss banking traditions of yesteryear.

“There’s no doubt that given the attacks by the Italian government in particular, or to ensure that their details do not fall into the hands of some untrustworthy bank employee, our customers are becoming more and more demanding as far as confidentiality is concerned. And there is nothing better than a numbered account to respond to their expectations,” he explained.

Fortunately, the article also points out that it  is not only for tax reasons that clients of private banks are looking for numbered accounts:

In cases of divorce, inheritance or even blackmail it gives the holder additional protection. If there is a court case, the plaintiff has to name the bank where he believes the funds in question are held before proceedings can go ahead. And that is a major advantage for potential victims of blackmail, such as politicians or celebrities.

Most bank orders pass through several hands within a bank and any bank slip normally includes the client’s name and address, but a numbered account avoids these risks.

Who can open a numbered bank account? Almost anyone with a private bank account in one of the European offshore banking centres can qualify for this type of account. Like anything else, it’s a service that costs money and the banks will charge extra for the additional administrative burden involved. But it’s not a service that is advertised in flashy brochures at the counter. It’s a matter of knowing who to ask.

More information on numbered bank accounts can be found in the Practical Offshore Banking Guide, available free to members of Q Wealth. Not yet a member? Click here to see what you are missing!