Switzerland or Singapore for Private Offshore Banking?
Filed Under (Offshore and Private Banking) by editor on 15-07-2009
Tagged Under : australian tax, banking hong kong, banking singapore, best private offshore bank, canadians offshore, hong kong bank account, offshore banking, panama bank account, singapore bank, singapore bank account, singapore double taxation agreements, singapore information exchange, swiss bank account, swiss bank alternatives, switzerland information exchange, uruguay bank account
However I found the following observation on an internet discussion group, that I found interesting:
“Switzerland said it would seize UBS AG data to prevent the U.S. Justice Department from pursuing a U.S. court order seeking the identities of 52,000 American account holders in a crackdown on tax evaders.”
“The Swiss government “will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS that is the subject of the summons,” according to the filing.”
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“The Singapore government is proposing changes to its tax laws to meet demands from the U.S. and Europe to clamp down on bank secrecy.
“Singapore will seek to amend its domestic laws to allow it to extend further cooperation on information exchange” via double-taxation agreements with other countries, the Finance Ministry said in a statement. It is seeking public comments through July 28 on the amendments.”
So, how can we interpret these two news items?
First of all, they both have to be taken in context. While it’s good to see Switzerland sticking up for its sovereignty, we have always recommended clients against doing business with big, international banks like UBS or Credit Suisse. Iwas hardly surprising that UBS were targeted, given their large US presence that makes them something of a sitting duck. We have numerous articles about the Right Way to do Swiss bank accounts (Cantonal Banks, for example), and our Practical Offshore Banking Guide includes contact details of other recommended sources for private banking in Europe (not necessarily Switzerland).
Singapore is a place we’ve never done a lot of banking business with, and the quotation above goes some way toward explaining our reticence. But we full admit that our geographic bias when it comes to banking is more towards Europe and Latin America. Singapore is certainly convenient for Asians and Australasians, due to time zones, languages and culture. On the other hand, it would have to be up there with Hong Kong at the top of the hit list for say the Aussie tax authorities, who are getting more and more agressive these days.
But is banking in Singapore and Hong Kong such a good idea for Europeans and North Americans? In my view, probably not. Both the EU (particularly the UK) and the USA have quite strong influences there, and neither of these entities are friends of offshore banking. Canadians might be OK in Singapore. If you are interested in banking in Asia, then World Offshore Banks has some intriguing services worth exploring.
Generally, the rule is that convenience is a threat to privacy. If you are looking for the most private, best offshore bank for you, you want to be as far away as possible – both geographically and culturally – from your home country and the places where your fellow countrymen do their offshore banking. Europeans might do well in Latin American havens like Panama and Uruguay. North Americans might do well still in obscure corners of Europe.
Whatever you decide, remember that nothing is for ever. You need to monitor the situation and changes taking place in the world of offshore finance. It pays to work with banks that are nimble enough to help you with this. We can recommend a few. And The Q Wealth Report is here to help you with offshore banking advice and recommendations. If you haven’t yet signed up for our Free Offshore Banking and Asset Protection course, I would recommend you do so!
by Peter Macfarlane for The Q Wealth Report
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These are well-reasoned approaches to very challenging times for offshore financial centres with the recent US and OECD crackdown on these jurisdictions. While we agree that Singapore is a good option for Asians and Australasians (to satisfy requirements such as language and similar time zone), may we suggest that Labuan is the better alternative as an international financial centre in the current times?
Labuan has been affirmed as a “low-risk” jurisdiction for money laundering activities by The Asia-Pacific Group on Money Laundering and there are sufficient checks and controls to ensure businesses channeled through Labuan are of “substance” (i.e. real, not artificial), legitimate and clean.
Labuan’s strategic location between China and India; sharing a common time zone with several other financial centres in Asia; having access to Malaysia’s 69 tax treaties & expertise in Islamic finance products; as well as working towards committing to the OECD’s white list by year end should recommended us on your list of low cost and tax friendly jurisdictions to be in. From an Asian perspective, the operational cost in Malaysia is lower than other offshore financial centres in the Asia Pacific region (approx 40% lower than HK and Singapore). The jurisdiction is also fast becoming a popular financial gateway to Europe and for Middle Eastern funds and investments.
Being located in Asia – next door to Singapore and HK – armed with Islamic finance expertise and off US radar screens, Labuan could be the next jurisdiction of choice for potential investors. For more information on Labuan International Business and Financial Centre, visit http://www.labuanibfc.my