If you’ve ever considered going offshore, banking, living, investing or doing business internationally in Latin American offshore financial centers like Panama and Uruguay,  or on one of the Caribbean islands (Cayman, Bahamas etc), I’ve got some important news for you below.  As Swiss banks are under pressure as never before to lift the veil of bank secrecy, places like Panama have become to look like more attractive options. But how does this work in practice? What is going on today in the secretive world of offshore banks?

The following missive was sent out in our free Q Bytes newsletter a week ago. Response from readers has been phenomenal so we decided to publish it here on the blog, in order to make it available to a wider audience. (If you would like to receive news like this in advance, directly in your e-mail box, be sure to sign up for Q Bytes – remember it’s free!)

As we noted in our last article on the benefits of Panama Corporations and Bank Accounts, Q Wealth has quite a strong Latin American bias when it comes to investing and carrying out offshore business. Although this may surprise some readers, especially in the face of the world-shaping events and undeniably huge money-making opportunities in the Far East that we’ve also recently covered in Q Bytes, we can assure you that ours is a well thought out and considered policy.

Some places in Latin America are very liveable – Panama, for example, for those who dream of living tax-free near a tropical beach, or Uruguay for traditional European style city living at a fraction of the cost of the original version.

This week we are pleased to announce a brand new report prepared by Alternative Latin Investor magazine in association with Peter Macfarlane and The Q Wealth Report. This brand new report covers in-depth the state of offshore banking and wealth management in Latin America and the Caribbean – from a completely new, independent perspective.

It’s based on exclusive interviews with hands-on people in the know, movers and shakers like top bankers and business leaders. And best of all, this report is available entirely free of charge to Q Wealth members. You can download your copy right now in our Members’ Area.

If you have ever considered setting up a Panama bank account, retiring to a vineyard in Argentina, or opening an offshore internet  bank account (or an e-commerce offshore merchant bank account), then you need to read this report. It will help you understand how offshore banking in Latin America and the Caribbean works today – not so much the nuts and bolts of how to do it that you can already get from our Practical Offshore Banking Guide, but things like why different jurisdictions offer different services, how and what the local people, expat bankers and retirees are thinking right now, how governments in the region are reacting to political pressure from the USA, G20 and OECD, and how to ensure the security of your bank deposits… this report will give you the geopolitical depth behind the headlines, essential information for anyone considering living, investing or doing business in the region. You might also enjoy reading our post on the best offshore banks.

We would especially recommend this report as essential background reading alongside our Practical Offshore Banking Guide 2009.

HERE’S WHAT YOU WILL LEARN IN OFFSHORE BANKING LATIN AMERICA 2009

Will reading this report be a good investment of your valuable time? I’m sure that’s what you want to know. So here are a few of the key points and quotes specifically covered in this report, that I thought you might find particularly interesting. I’ll try to expand on these in future articles, but in the meantime you can read the details in this Offshore Banking Latin America 2009 report…

• Diversifying location for capital is a significant trend in both the Americas and Europe. Those new to offshore banking may be thinking twice about moving in that direction, but those familiar with its mechanisms feel it is a haven in the present climate. You’ll find out why.
• Whereas before most people thought the worst couldn’t happen, now smart people are planning for worst case scenarios. For Americans, that means a total collapse of the dollar. While inexperienced investors may feel that foreign markets are risky during times of crisis, smarter investors are well aware that risk can be substantially reduced by diversifying offshore.
• Instability provoked by the financial crisis could spark the return of economic nationalism like currency controls or even expropriation around the world. This may be carried out via the back door. Learn how investors and banks in the region are protecting themselves and their assets. For example, learn why corporate accounts at Brazilian-owned banks in New York and Nassau have grown ten-fold since the beginning of 2008.
• Find out more about the breakdown between corporate and personal accounts, and how clients typically achieve stronger asset protection through the use of corporate structures
• Read candid interviews with bankers about how European tax directives could affect European banks with branches in Latin America… this is stuff you won’t read on banks’ corporate websites.
• Why Panama is “not so artificial” and has “a solid economy” – compared to certain Caribbean jurisdictions that might look great on paper, but where the rule of law may not be respected. What image do you want to project when people do due diligence on your offshore corporation? One offshore provider gives a few warnings about things that don’t appear in the official brochures, and names a couple of jurisdictions (including one island that is particularly popular with Americans) that have a less than positive reputation.
• Learn more in-depth about the Panama banking system by reading interviews with local bankers and business people. Legally speaking, there are three different types of banks in Panama – what are the differences? Which should you choose, if any? How does Panama provide security for bank deposits?
• Why asset protection is so important: “If you want to sue someone in the States it doesn’t cost you anything but you can go bankrupt defending yourself.” Learn how Caribbean jurisdictions easily prevent this kind of fantasy lawsuit from ever being filed.
• “Before you had to be a multi-millionaire to make it worthwhile. Now there are people with $100,000 looking to diversify into foreign currencies or invest overseas. This has been made possible by offshore internet banking.” Read about the latest internet banking technologies, debit and credit cards, and multi-currency accounts in the region.
• Read an exclusive interview with Gaetan Bucher, Swiss-Dominican banker and the founder of the $850 million ‘International Financial Centre of the Americas’ – the first financial free zone in the world. This is literally a new ‘financial city’ due to start construction by the end of 2009 with completion scheduled for 2012. IFAC will offer real time offshore banking as well as an electronic clearing and settlement house LAIFEX – backed up by sophisticated financial services from big names. The regulations are being drawn up by Washington law firm Patton Boggs and Deloitte Consulting in London. Lloyds of London are also involved in the project.  Crucially, it is completely aligned with ‘best practice’ guidelines from the OECD and G20. This interview in my view represents a fascinating vision of the future of offshore banking and investing, where borders become insignificant. What will the offshore landscape look like when IFAC opens in 2012? Anyone thinking of going offshore now should think very seriously about this last question.
• Discover a new free online networking opportunity aimed at Baby Boomers retiring offshore, where they can search for international real estate, ask questions of experts, and meet people with similar interests. It’s a chance to connect with people who have ‘been there and done that.’
• Nothing beats doing your homework on an offshore jurisdiction before you finally select. One banker comments how smaller banks are often more orderly than big banks. He says, “Look for a historic bank that has worked well for many years, that has a strong balance sheet and doesn’t do strange things.” And you’ll learn other due diligence tips too.
• Do people who are retiring in the region need offshore accounts, or can they get better services from local banks? An important question for those applying for residence or buying property. It’s answered in this report.

All the above and more is covered in Offshore Banking: Latin America 2009, available free for download in Q Wealth’s Members Area. If you are not yet a member, you can buy access online now for just $87 for a year’s membership. Sign up now and get this info while it’s hot of the press!

We write a lot of articles about Panama as an offshore haven here. This is not an accident, nor an unreasonable bias. We still consider Panama to be an excellent jurisdiction in which to set up an IBC, Corporation, or Foundation… and possibly an offshore bank account. But a reader asked me a question the other day which made methink back to basics… what is the real advantage of a Panama corporation? And what kind of services to Panamanian banks really offer?

The most obvious advantage is that Panama offshore corporations are completely tax free. That’s right – as long as they do business internationally (as opposed to in Panama) they don’t even have to file a tax return, let alone pay any taxes. Some people love the simplicity this offers.

Perhaps surprisingly, however, tax is not normally the major motivation for my clients who choose to go offshore in Panama. This is partly because most major jurisdictions these days have so-called CFC or “Controlled Foreign Corporation” legislation that severely limits the tax advantages of doing business in offshore havens these days.

No, most clients these days are not tax evaders. Instead, they are looking for offshore asset protection or wealth management strategies – diversification out of the US dollar for example. (This may seem strange given that Panama’s national currency is the US dollar, but please indulge me for a moment – more on this below)

Panama Private Interest Foundations are an ideal vehicle for ‘family office’ type asset protection applications – similar in many ways to a common law trust, but with a strong offshore privacy advantage. Panama Private Interest Foundations are the instrument of choice for those seeking to pass on their hard-earned assets securely to future generations.

Panama Corporations are often used for trading activities – like import/export, consulting, or – increasingly – e-commerce. You’ll find lots more on these topics in my articles and free reports on this subject in the Members’ Area. You can start with my Report on Panama Offshore Corporations and Banking that you can download immediately for free, with no obligation – right now!

But what about setting up a Panama Corporation, Foundation or Panama LLC?

The initial process is straightforward. The cost can vary from about US$1,500 to US$5,000. You might find some a little cheaper, but many law firms in Panama have an unpleasant habit of adding hidden charges later for documents you didn’t know you needed – so beware. More on this topic too in the free report mentioned above.

Not nearly as straightforward, however, is the process of opening a bank account in Panama. Let’s compare this to the USA for a moment. The USA is still one of the easiest places in the world to open a bank account. Answer a few questions, sign some forms, and, hey presto, you’ve got yourself a bank account.

However, the OECD, American and G20 wars on terror, taxes, drugs, and money laundering have made opening corporate bank accounts in Panama very difficult. These days, Panamanian banks view opening an offshore bank account not as a right but a privilege – especially if you are an American! Expect to jump through hoops.

Up front, you will probably be asked for two bank references. If you have only one bank account currently, you can probably substitute a letter
from a credit card company for the second bank reference. You will also
need at least one local professional reference – in other words an introduction from a Panamanian law or accountancy office. “Who you know” is very important in Panama.

A really good introduction might even avoid the need for the bank references, but then your introducer had better be a personal friend of the bank manager! I’ve seen it done (and, yes, I know how to do it for my clients in need)

Then you will need two forms of government-issued ID with photo: your passport of course, then a second ID, such as a driver’s license.

Armed with those documents, make an appointment to meet with a bank
representative, and prepare your trip to Panama. During your meeting (which will seem more like a job interview), expect lots of questions. Why are you opening this account? How much money will you be depositing initially? Where is that money coming from? How much money do you expect to receive into the account on an ongoing basis? What will be the source of those funds? How much will you be withdrawing from the account each month?

Can you open an offshore bank account online without traveling to Panama? Yes, in certain special circumstances…but it is frowned upon. It is highly preferable to make the effort to get to know your banker face-by-face.

You might however question if you need a bank account in Panama at all. Of course, most Panamanian lawyers will want to sell you a Panamanian bank account. But do you really need one? If your aim is to diversify out of the dollar, for example, it makes a lot more sense to take your Panama Corporation or Foundation, then go ahead and open your account in an offshore bank in another jurisdiction – maybe Uruguay for example. You’ll find more on this and similar pieces of advice in my Panama Report available absolutely free for instant download. Click here to claim your Free Panama Report.

Maybe you’ve read our recommendations on buying and storing physical gold bullion in a secure offshore location. Maybe you are looking for a secure storage solution for confidential documents. Anyway, a secure offshore safe deposit facility is a useful asset to any freedom-oriented individual.

The good news is that most Austrian or Swiss banks will be happy to rent you a safe deposit box, regardless of your passport. The bad news is that you need your passport! The famed Austrian and Swiss anonymous numbered bank accounts now only exist in the movies. Swiss banks usually want you to have an account from which they will deduct the annual box rental fee. Costs start at around 65 euro ($90) per year for a small box.

There is one exception: a safe deposit outfit in Vienna known as ‘Das Safe’- located in a beautiful Austrian palace. You’ll find more information in Peter Macfarlane’s Gold Report, available free to Q Wealth members.

Just about every bank in Austria or Switzerland also sells gold bullion coins. Purchases up to around CHF 25,000 do not require ID in Swiss banks.
Consider buying gold coins like the Austrian ‘Philharmonic’  a  one ounce Austrian gold coin, similar to the American Eagle, Krugerrand or Maple Leaf.

Austrian and Swiss law prohibits banks from opening your safe deposit box unless they are sure you are dead! Austria is one of the only countries in the world with this protection. I have been in Safety Deposit vaults in France and the USA where it seems half the boxes have stick-on government seals on them due to tax investigations, lawsuits, or  creditor claims. Those seals mean that the owner can’t get into his box, and it is scheduled to be drilled open for inspection if the owner doesn’t show up for an appointment with “the authorities.”

So Austrian and Swiss banks are great places to hold safe deposit boxes, but what if Latin America is your stomping ground? How can you buy and sell gold bullion bars and coins in major Latin American capitals like Panama City?

Unfortunately, buying gold in Panama is much harder. Banks selling gold are few and far between (though see the recommendations in Peter’s report) But there is a bit of good news… a new private, non-bank safe deposit facility is opening in Panama City, named “Best Safety Boxes” which is opening in the Credicorp Bank building in Panama City. Further details on Best Safety Boxes may be found here: Do Business in Panama – Best Safety Boxes article.

by Frank Suess, BFI Consulting

For centuries, gold has attracted investors seeking to protect their wealth and provide a ´safe haven´ in troubled or uncertain times. This remains a reality for modern investors too, although there are also a number of other reasons that underpin the widespread renewal of investor interest in gold. Gold can add an element of potentially outstanding capital gains to your safety-oriented portfolio. And, if structured adequately, gold will entail a minimal downside risk.

We consider buying gold “the right way” to be a HOT topic and unique opportunity in achieving the following benefits:

• Diversification out of continuously devaluing paper currencies, thereby protecting one´s assets against a loss of purchasing power AND, at the same time, setting it up for capital gains.

• Retaining liquidity and purchasing power for the next upturn in business cycles (which in our view has NOT arrived yet), thereby securing the opportunity of taking part and benefiting from it. It is important that the gold format one chooses is supported by a liquid market, i.e. you want to be able to buy and sell rapidly if need be.

• Safe haven: In volatile and uncertain times, there is typically a “flight to quality” as investors seek to protect their capital by moving it into assets considered to be safer stores of value. Gold is among a handful of financial assets that do not rely on an issuer´s promise to pay, offering refuge from default risk. It provides insurance against extreme movements that often occur in the value of traditional asset classes in unsettled times.

• Paper Currency Hedge: Gold is often used as an effective hedge against fluctuations in fiat currencies. In particular, a close relationship tends to exist with the U.S. dollar. When it appreciates, the dollar gold price falls, while a fall in the dollar relative to the other main currencies produces a rise in the gold price. While this may also be true of other assets, gold has consistently proved among the most effective in protecting against dollar weakness.

• Added asset protection and privacy: Structuring your strategy appropriately can provide a considerable level of privacy. Depending on the format gold is bought in, there are considerable privacy and safety related differences. More specifically, buying gold “the right way” can mean avoiding reportability and minimizing confiscation risks.

• Portfolio diversification: Most investment portfolios are invested primarily in traditional financial assets such as stocks and bonds. The reason for holding diverse investments is to protect the portfolio against fluctuations in the value of any single asset or group of assets that react in a common fashion. Portfolios containing gold are generally more robust and less volatile than those that do not.

• Physical or virtual ownership: You can buy gold in its physical form and store the coins, gold bars or jewelry that you have acquired. However, storage fees must be considered. And, one must consider a lower level of liquidity compared to a gold certificate or metal account (also referred to as a claim account).

BUYING AND STORING PRECIOUS METALS “AT HOME” OR OVERSEAS?

A key issue that needs to be addressed is whether an investor should buy gold offshore or “at home”. The answer will not be the same for everyone. Depending on your specific objectives and situation, you may be better off keeping your assets in your home country and storing physical gold in your local bank´s deposit box. You might, however, be well advised to buy and store physical gold offshore. Or, maybe, you should consider a mix of both.

Buying Gold “At Home”

Obviously, this is (a bit) more convenient, simply for the fact that you are not dealing with time and language differences. Furthermore, you can have the gold delivered to your home or directly to the local bank or storage facility of your choice with more direct control over your assets. However, a key issue arises — and this applies to U.S. investors in particular – in regards to the risk of government confiscation when buying and storing gold “at home”!!!

How might a gold confiscation be possible nearly 70 years after the last one occurred? This question is best answered with a series of other questions: Firstly, how will the massive U.S. federal debt (nearly $6 trillion and growing) and the outstanding international dollar float (resulting from the U.S. trade and budget deficits) be reconciled?

Currently, the U.S. dollar (still) enjoys a special status around the world as the primary reserve currency. This status encourages central banks and individual investors around the world to hold it. Leaving the various circumstances and potential scenarios aside, what would be the outcome if the stilts that propped it up were kicked out from underneath this built-in dollar market?

How might the U.S.government react to an economic emergency in which individuals, beset by either a devastating domestic inflation or a deflationary nightmare — or both — were fleeing the banks and equity markets for gold as a means of preserving their personal capital?

Historically, confiscation has all too often been the option taken by governments beset by an economic breakdown. Just as gold is the asset of last resort for the individual portfolio doing service in the most financially threatening times, it is often times the asset of last resort for troubled governments as well. As recently as 1998, during the Asian Contagion, both South Korea and Thailand implemented “voluntary” gold call-ins. The temptation presented by its citizens´ gold holdings was simply too facile to resist.

No matter how you look at it, investors must beware of government confiscation risks that rise exponentially in times of a severe economic crisis (as seen under U.S. President Franklin D. Roosevelt in 1933).

Buying Gold Offshore

The advantages of buying and storing gold offshore are primarily related to PRIVACY and ASSET PROTECTION. However, what is required to reap these benefits is a structure that allows you to re-allocate your precious metals rapidly and store them safely. Ideally, this is done in an efficient and low-cost mode despite any geographic distance issues.

Some clients may prefer buying and storing physical gold over a “virtual” gold account or certificate. They perceive a higher degree of safety in this strategy because of the fact that they are allocated a specific and tangible lot of gold. However, storing physical gold is obviously more costly. And, it is generally less liquid than its “virtual sisters”.

Despite higher holding fees, in today´s environment, BFI ultimately recommends holding physically allocated precious metals, preferably in bullion coin or bar format.

Conclusion

Both options, buying gold offshore or “at home” have their advantages over the other. The offshore option is more complex in execution and requires a larger investment. This is not a “do-it-yourself” commodity, unless you have lots of time and like to travel. Therefore, we recommend taking advantage of a full service program as offered by BFI Consulting and some other firms.

When going the offshore route, beware of strategies that sound too simple. Think the process through. And consider the hefty fees and taxes (VAT) you will pay in some European countries.

The “at home” solution is more convenient and efficient. The key risk, in case of a severe crisis, is government confiscation. It appears, however, that if approached cleverly, these risks can be minimized.

Further reading: Frank Suess Jr is CEO of BFI Capital in Switzerland. His firm provides solutions for buying and storing physical gold bullion, as well as offering a range of excellent portfolio management services for high net worth individuals. He can also assist with Swiss Bank account opening.

If you would like to read more about how to buy, hold and store physical gold bullion offshore, visit our Offshore Precious Metals page. You will also find good information for free here on Gold and Silver Investments.

You might have noticed recent news reports about how a US court forced Google first to block an innocent user’s private e-mail account, then reveal that person’s identity – all because a careless bank employee accidentally e-mailed sensitive data to that Gmail account.

This case certainly demonstrates why anyone who values their privacy would be better off keeping their e-mail on offshore e-mail servers. Here at The Q Wealth Report, for a limited time we are offering a free offshore e-mail account on an encrypted server to all our subscribers. Details of how to claim yours are below.

Let’s look a little more about how overseas or offshore e-mail can protect your online privacy. Maybe you are concerned about the privacy of your financial communications with your offshore bank. More likely, you simply value your freedom too much and don’t want Big Brother looking over your shoulder.

I don’t have much confidence in the US court system, but even I was amazed to read about this severe intrusion on a user’s privacy. Imagine the inconvenience of having your e-mail account blocked because just somebody sent you an e-mail my mistake – something you most likely deleted believing it to be spam. Well that’s exactly what happened.

News reports indicate that the court issued an order, insisting that Google block the e-mail account in question, then reveal whether the account was still active and whether the data in question had been viewed. And if the account was active, the order continued, Google was required to hand over the account holder’s identity and contact information.

Google, to their credit, did fight the case – but  lost. The plaintiffs, Rocky Mountain Bank (who were responsible for the error in the first place) even had the nerve to try to hush everything up: they filed a motion to seal the entire case on the grounds that if the information became public, “it would create panic and result in a surge of inquiries from customers.” Fortunately the court rejected this motion.

“The case underlines what should be obvious to Google watchers,” comments Cade Metz, writing in The Register. “Though the company vows to protect your personal data, it can be compelled by court order or subpoena or natural security letter to divulge such info. And then there’s the judge’s ill-advised decision to order the deactivation of a bystander’s email account.”

And therein lies the problem, to which offshore e-mail is the solution. For a limited time, we are offering a simple but effective free e-mail account to all subscribers. This e-mail account will be hosted on a fully encrypted offshore server, safely outside your home country’s jurisdiction (though no-one would routinely notice that, as it’s hosted on a .com domain). You can connect to it via an SSL encrypted connection. The account is yours absolutely free and without obligation while you remain a subscriber. If you are not yet a subscriber, simply sign up now.

Please email our contact office in London to get your free secure e-mail account set up. In your e-mail be sure to state your preferred user name (this will become your secure e-mail address) and an initial password. As soon as the account is set up, you will be able to log in to the control panel and change your password.

It’s worth pointing out the difference between this account and your regular free e-mail account. The main difference is that this account is accessible not only via SSL encrypted webmail, but also by secure IMAP and POP. You can also send messages from your favorite e-mail software without revealing the IP address you are connected from.

Shortly, our colleagues will be offering a suite of premium communication services, such as encrypted Voice over IP (VOIP) or the possibility to host your own domain on our offshore secure servers.You will also have a chance to go ” Beyond Encryption” with a secure USB advice that routes your communications entirely via a private, encrypted offshore server. For more on this, watch this space.

If you would like to read more about IT privacy and security, we also recommend our Secure Communications page.

Asset protection strategies and products offered by international banks in the various offshore tax havens around the globe don’t differ that much in substance. However, there are some interesting and powerful products you might come across in the offshore banking arena that are very different from what your domestic bank offers.

Here are five privacy-oriented offshore banking services that you might be able to achieve to further your freedom, wealth and privacy!
1. Offshore Safe Deposit Boxes

A safe deposit box is a locked box reserved for you in the vault of your bank. In your safe deposit box you might keep documents such as physical stocks or bonds, or for small, high value goods that they want to keep safe… like valuable coins, jewelry or maybe even a stash of federal reserve notes! You might keep these items for pure investment purposes – say gold bullion or uncut rough diamonds – or for more sentimental reasons (your great-grandmother’s wedding ring).

Increasingly, non-bank safe deposit facilities are becoming available. These are good because they are not reportable financial accounts – you don’t have to tell the tax man about them. Our contact in Panama reports a new safe deposit facility opening there, for example. Others, for example in Austria and in the Caribbean, are identified and reviewed in our free (to registered members) report How to Buy and Hide Gold Bullion Offshore.
2. Multi-Currency Accounts vs. Multiple Currency Accounts

Multi-currency accounts are quite common in offshore banks. These are very flexible since they permit you to keep many different currencies under the same account number. When you log in to the internet banking interface of your offshore bank account,  you will see different balances… X amount of US dollars, Y amount of Euros, Z of Yen etc.

Other banks also allow you to hold balances in different currencies, but allocate you a different account number for each currency. The end result is basically the same, but you will have a series of account numbers and you must take care not to confuse them. For example, if you send Yen to the Canadian dollar account number, the bank will assume you want to convert that balance to CAD and will do so automatically.

3. Precious Metals Storage

Some offshore banks offer a basic service where you can buy gold and simply store it in your safe deposit box. This certainly works, but may not be the most practical way of handling it. Why? Because each time you want to buy or sell, you have to visit the bank personally. Only you have access to your box.

There are various other practical ways of buying gold such as Perth Mint Certificates or Exchange Traded Funds, but the security of such investments in the current financial climate is debatable (see our article on Offshore Precious Metals Investments).

But in terms of offshore banking products (and this is especially common in Swiss banks) it’s important to understand the difference between allocated storage, and unallocated – also known as pooled storage. Both these systems are used by private offshore banks. If you would like to read more about them, read our free (to members) Gold Report for a detailed explanation.

4. Numbered Accounts

We’ve all seen James Bond movies, but what might surprise you is that many European private banks still offer numbered accounts today, simply for the asking. Numbered accounts (or pseudonymous accounts, which are the same but are known by code words instead of numbers) work just like any other offshore bank account.  The  difference is the the link between the code number or pseudonym and the actual customer is known only to a few senior managers within the bank. Of course, KYC regulations mean that a final beneficiary must always be identified. But at least this system protects your information from the hands of low level bank staff.

Typically the way numbered accounts work these days is that you will have a numbered account and a regular account in the same bank. Numbered accounts cannot normally be used for regular transactions such as wire transfers. So when you want to make a deposit or withdrawal, your private banker will personally carry out a cash transaction at the counter between the two accounts. In the accounting records, the transaction will appear on your personal account as a cash deposit or withdrawal, so there will be no direct link to your numbered account.
5.  Offshore Credit and Debit Cards

Almost all offshore banks will offer you the option of linking some kind of plastic payment card to your account. This may be anything from an unbranded hole-in-the-wall cash card through to a premium travel and entertainment card like the Platinum American Express or Diners Club cards. The most common brands, of course, are Visa and MasterCard… but there are far more variations on these cards than there are banks in the world! You offshore private banker will be happy to explain the range of cards available.

What your banker will not explain, however, is that you may well be able to enhance your privacy by obtaining a card from a completely different bank. For that information, you need to download and read our free (to registered members) Practical Offshore Banking Guide. There you will find specific information on prepaid credit cards and anonymous cash cards available from offshore banks.

Want to read more about these five services, plus other offshore banking services you might never have even heard of? Then you need to be a member of Q Wealth Report. The first step is to sign up now for our free five part course, Secrets of the Super Rich. Module one of the course, entitled Offshore Banking Made Simple, could be in your inbox shortly!

Unfortunately, when it comes to offshore banking and international asset protection, people make a lot of mistakes. Blindly trusting advisers is one of the more serious.

We’ve long warned here of two things:

1. Don’t do business with offshore banks that have a presence in your home country. Especially not ones who send in employees to participate in illegal tax evasion schemes. Heeding this advised would have saved 50,000 Americans a lot of headache and loss of sleep in the recent IRS and Justice Department case against leading Swiss bank UBS.

2. Don’t assume that because you are not American, you are safe. This rule is highlighted by the latest news from Ottawa…

UBS, Switzerland’s biggest private bank and one with substantial operations worldwide, agreed in August to reveal the names of nerarly five thousand of its wealthiest US clients under intense pressure. Many people believed that the best offshore banks were the biggest – or simply went for the convenience factor given the Swiss bank’s large North American operations. They are learning to their cost, however, that ‘small is beautiful’ as strong and conservative local banks in Switzerland, such as the Swiss Cantonal Banks we have written about in Q Wealth Report, have been left unmolested and have maintained respectable balance sheets.

But now Revenue Canada wants the same information, according to Reuters.

A spokesman for Canadian Finance Minister Jim Flaherty recently confirmed that there is talk of tougher laws to compel offshore banks to cooperate with Revenue Canada.

As the Reuters article states:

Offshore private banking involves managing the wealth of rich clients from a foreign location. However, some clients have exploited the system to avoid paying taxes, especially if transactions are carried out in traditional banking secrecy strongholds such as Switzerland and Liechtenstein.

Fortunately Canadians (like Brits, Ausies, Kiwis and others) have the huge advantage over Americans, that they can simply opt out of their domestic tax systems by leaving their respective home countries. More and more Canadians are choosing to do just that – often becoming ‘snowbirds’ commuting to winter homes in warmer climes and living tax-free offshore. But to do that, reliable information and research is necessary. (The USA is the only country in the world that tries to tax its non-resident citizens.)

These topics are frequently covered in Q Wealth Report, your leading one stop shop for information on offshore asset protection and international banking. If you’re a Canadian with offshore assets, regard this latest piece of news as a warning call. It’s time to review the situation and look into your options. Here at Q Wealth we offer impartial advice, a wealth of articles and free reports, and a unique rolodex of reliable expert contacts in the offshore world.

If you’re not Canadian, will the next news of an offshore crackdown be from your government?

Wealthy Latin Americans have been banking in Uruguay for decades, but it is less well known as an offshore banking centre in the rest of the world. That could be good news for your privacy, says offshore banking commentator Peter Macfarlane.

Uruguay has acquired a nickname, “the Switzerland of South America” due to its discreet Swiss style private banks and its low profile participation in the offshore finance business. Although it’s not generally known as a tax haven, Uruguay was one of four countries that acquired a higher profile than they wanted for their offshore financial sector businesses this year, being blacklisted by the OECD / G20 summit as a non-cooperative tax haven. However, in a very civilized manner typical of South America’s most stable country, Uruguay was also one of the first to be removed from the offshore banking blacklist. So what’s the story?

Uruguay today has two different categories of banks. There is the domestic banking system, dominated by two government-owned banks, the largest of which is Banco de la República Oriental del Uruguay (BROU). Founded in 1896, BROU previously performed many of the functions of a central bank. Today it is posible for foreigners to open accounts in the domestic system, but Uruguay Residence will typically be required, and it is hard to open offshore corporate accounts for foreign corporations.

Of more interest to non-residents of Uruguay are the so called ‘S.A.I.F.E.’ These are local Uruguayan entities that are wholly owned by established foreign banks. Their offshore status means that they are prohibited from doing business in the local market: for example they cannot do business with Uruguayan residents, and they cannot offer local checking accounts. They can however provide a full range of commercial and private banking services to foreign, non-resident individuals and companies.

The idea of allowing foreign banks to participate ‘offshore’ in Uruguay was originally to stabilize the local system with the resulting influx of foreign capital. Despite drug money scandals in the early nineties and the fallout from the Argentine financial crisis, Uruguay has managed to maintain a clean, under-the-profile radar – and this is one of its main attractions today.

We frequently introduce our paid-up members to a couple of these foreign banks operating in Uruguay. One is located in the capital, Montevideo, while the other is located in the trendy tourist resort of Punta del Este. A personal meeting is required, but need not be held in Uruguay. For example if you choose to work with one of the Swiss or European private banks with a S.A.I.F.E. in Uruguay, the meeeting could be held at the European headquarters and then the paperwork would be sent to Uruguay to get the account open.

If you would like to know more about how to open an account at one of these offshore banking institutions in Uruguay, check out our Practical Offshore Banking Guide which is available free for download in our Members’ Area. (If you are not yet a member, you can join online right now)

Uruguay, it should be said, respects offshore banking and its bank secrecy in its constitution – definitely a positrive sign.  Notwithstanding inevitable partial piercing of bank secrecy in recent years, the right attitude remains.

Following the OECD G20 blacklisting, for example, furious articles like this one (in Spanish) appeared in the local press condemning attacks on Uruguayan sovereignty by larger nations abusing their powers. Some of the convincing arguments from that article, translated into English:

- The OECD text says that tax havens should bring themselves in line with “international standards” for tax-information sharing, as if it were a UN convention or some other multilateral agreement signed by Uruguay. Really it’s an OECD convention, of which Uruguay is not a member and has nothing to do with.

- Why are they doing this? Because over several decades OECD countries have been expanding and complicating their systems of taxation – out of all proportion with the return these administrations give to taxpayers. In other words – it’s their problem. What does Uruguay have to do with it?

- How does bank secrecy benefit Uruguay? In reality the question isn’t being put the right way. Bank secrecy is consecrated in the constitution. Of course there are limits and norms to bank secrecy, but these aren’t pre-requisites. In other words… it doesn’t matter if it benefits Uruguay or not, it’s a right. Full stop.

Thank you for the translations to offshorenet.com

Finally, any mention of Uruguayan banking on the internet would probably not be complete without a mention of Capital Conservator Treasury Services, a high profile player in the international offshore banking business. Capital Conservator originally set up as a Uruguayan entity but a few years ago they decided to change their place of incorporation, keeping only back office functions in Montevideo.

Q Wealth continues to be your one stop shop for offshore banking and asset protection information. We offer impartial advice you won’t find elsewhere, together with a high level of personal service – including our Q Wealth Events. If you aren’t yet on our list, sign up now and receive our weekly Q Bytes e-mail newsletter as well as our free five part course ‘Secrets of the Super Rich’ covering offshore banking, international asset protection, freedom, and wealth creation.

Offshore hedge funds, mutual funds and so-called high yield investment programs could be next on the IRS hitlist. That’s the conclusion of a recent Wall Street Journal article. After the recent events with Swiss banking behemoth UBS, other large offshore banks and financial institutions are ‘low hanging fruit.’ What does this mean for you as an offshore investor? Peter Macfarlane explains below.

Alex Raskolnikov, a professor and offshore tax expert at Columbia University Law School quoted by the Journal, believes that the IRS and US Justice Department will try to identify tax evaders who invest with offshore hedge funds managed by offshore banks. This will play out as as part of the US government’s ongoing effort to have big foreign financial institutions, which are incorrectly regarded by many as the best offshore banks, to provide them with confidential information about Americans who open offshore bank accounts.

Legislation recently introduced in the US Senate by Finance Committee Chairman Max Baucus would go beyond the existing FBAR (Foreign Bank Account Reporting) requirements, which are filed by taxpayers only on annual basis. It would require U.S. financial institutions to report to the IRS transfers of money into any foreign financial account in real time. The IRS would therefore automatically receive electronic information on new offshore bank accounts as soon as they were opened. Scary stuff, for sure! But that is exactly the purpose of it.

Until recently, US tax attorneys  understood that FBAR requirements did not apply to interests in off-shore hedge funds. However in June of this year, according to the article,  an IRS official stated that the term “financial interest” would include hedge funds that “function as mutual funds.”

Ironically, anecdotal evidence suggests that the majority of investors in offshore hedge funds are in turn US tax-exempt hedge funds such as charitable organizations and pension funds. However, while hedge funds were once the domain of sophisticated investors playing with millions, there is no doubt that many are now operating more like regular mutual funds.

Of course, it is by no means clear how this information on transfers of money into foreign bank accounts would help the IRS. Millions of international transactions clear in New York every day and surely few investors seeking confidentiality offshore would directly transfer money between accounts held in their own names.

How could investors avoid popping up on the IRS radar? Simple. By transacting business in currencies other than the US dollar. This will surely be an advantage rather than an inconvenience for most American offshore investors. The major motivation for going offshore these days is not tax at all, but rather protecting the value of assets against the terminal decline of the dollar and the collapse of the US financial system.

Many of the more private European banks are now actively trying to dissuade clients from transacting business in US dollars at all, preferring that their customer data doesn’t have to be sent to New York. For example, one private banker recently told me that when a client wants to transfer dollars to another bank, they typically fix a EUR-USD rate in advance with the other bank. The transaction settles in Euros, and then is converted back to dollars on arrival in the internal books of the beneficiary/receiving bank. Importantly, my banker prefers to absorb the additional costs of the spread, rather than expose clients to dollar transaction clearance in the US.

Gold is also emerging as a settlement currency for interbank transactions in the mainstream banking system. This is a pleasing novelty that I hadn’t expected to see. Whilst regular readers know I’m a big fan of holding physical gold bullion as opposed to paper or electronic gold liabilities, such liabilities are certainly useful for short term transactions.

Raiffeisen Zentralbank Austria, which with its Eastern European and Asian clients has one of the highest volumes of US dollar clearing outside the USA, has been pioneering this. Since earlier this year they have been offering regular bank accounts denominated in gold ounces, which have prompted a number of offshore banks to offer such services to their clients, using RZB as the correspondent and clearer. A number of banks are now offering gold as a regular currency option in the currency portfolio of their multi-currency bank accounts. Yes, that means you can actually send and receive SWIFT transfers denominated in gold, provided both the sending and receiving banks have appropriate correspondent accounts.

Of course, for many Americans – those most affected by this clampdown – opening bank accounts denominated in other major world currencies appears to be  just a pipe dream. Very few American banks even offer Euro accounts. That’s a far cry from some of the banks we routinely refer clients to, which allow you to hold balances in more than thirty currencies conveniently managed under one account number. And then, there is the problem that many foreign banks simply refuse to work with US clients.

The fact is, however, that despite the government propoganda, opening an offshore bank account is a lot easier than you might think.

It is perfectly legal for Americans to hold as many offshore bank accounts as they wish. And there are still distinguished private banks in reputable tax havens that welcome American clients – especially those who don’t wish to do business in dollars. You will a special note for US Citizens (together with another special note for European Union Citizens) in Q Wealth’s Practical Offshore Banking Guide 2009. Best of all, it includes specific contact details of various banks and brokerage houses. In many cases you can use this information to open your account with no need for hiring an intermediary, and to open an account without even leaving home! You can download this 40-page manual absolutely free with your membership of Q Wealth.

If you are not signing up yet but are interested in hearing more about this topic, don’t hesitate to sign up instead for our Free Q Bytes e-mail newsletter, your weekly guide offering analysis of what’s going on in the offshore banking and asset protection world.

September 23rd will be an important date in the calendar of many of the USA’s most productive entrepreneurs and businessmen – people who sought to protect their assets against America’s out of control government and court system, through offshore (mainly Swiss) private bank accounts.

For those agonizing about whether to come forward in the amnesty, those merely contemplating doing so, or those in other countries like the UK and Australia wondering if and when their governments will be doing the same thing … I have discovered an excellent new contact who could help you sleep sounder at night (and no, he’s not a doctor!)

Although the IRS extended again in some limited circumstances the deadline for US taxpayers to file their 2008 FBAR forms  (Foreign Bank Account Reporting) forms otherwise known as Form TD F 90-22.1, the deadline for the amnesty looms.

The IRS has stated that US taxpayers who didn’t file FBARs for any of the prior six years (2003 to 2008), but nonetheless reported and paid tax on all taxable income, should file FBARs for such years by September 23, 2009. In such cases, the IRS has advised that no late filing penalties will be imposed. Note that the mailing address for submitting the amnesty is different from the mailing address for filing the regular FBAR return. A copy must be mailed to the IRS’s ominous sounding ‘Philadelphia Offshore Identification Unit.’

Fortunately, yours truly, Q Wealth’s offshore banking commentator Peter Macfarlane, has been busy in this regard on behalf of his many American friends and readers. I have identified and done due diligence on a US licensed attorney who spends about half his time working offshore, and half his time working from his law offices in the USA. The advantage of this, over contracting a US attorney directly in the US, should be obvious – besides his experience in offshore matters, you can actually talk to him securely while he is offshore, or even fly to meet him offshore. If you wish, you can even hold an initial meeting anonymously.

Of course, as you know from many of my recent articles, I believe most of the IRS’s crackdown consists of bluff. But still, it’s important to be compliant and to sleep soundly at night. Most of us I am sure would rather pay up some extorsion money rather than risk having armed thugs breaking in to our home in the early hours of the morning!

As you can imagine this lawyer is extremely busy at the moment. He is one of the best and is well ahead of the crowd of other lawyers who have recently jumped on the bandwagon in order to profit from representing clients in this amnesty. In fact, I believe he’s the only one who has an established base offshore.

So, in order to allow him to maximize his time, we are currently only referring clients to him after they have had an in-depth consultation with one of the Q Wealth Experts. We remind you that in-depth consultations are free with membership of the Q Wealth Report – simply contact the front desk and ask to be referred to an expert for an e-mail consultation. If your case is particularly urgent, there are other options for expedited or personal consultations.

If you are not yet a member of Q Wealth, the very first thing to do is sign up and study our material. It is not specifically US related and we don’t give tax advice – but our offshore banking and asset protection material is surely essential reading for anyone with offshore assets.

If on the other hand your answer is “Not now thanks, but I’d like to keep in touch” then simply sign up for our free Q Bytes, and receive our free five-part e-mail course Secrets of the Super Rich. e-mail newsletter