by Phillip Townsend for The Q Wealth Report

Not that long ago, Albania—a Balkan nation in southeastern Europe wedged between majestic mountain ranges and the Adriatic Sea—conjured memories of Stalinist isolation, endemic corruption and widespread poverty, a place mostly avoided by tourists, expatriates and PTs. But thanks to the combined effects of positive change, ambitious goals and a recent influx of cosmopolitan Albanians who have returned from self-imposed exile in Italy, Greece and beyond, it’s slowly making a name for itself as an expat- and tax-friendly destination.

With a vibrant, chaotic and haphazardly-planned capital (Tirana) that is littered with architectural relics of an Ottoman, Italian and communist past, this hospitable but economically deprived country has had the misfortune of being precariously close to what was one of the world’s most volatile regions (war-torn Yugoslavia). Even so, this majority Muslim country is emerging as an affordable refuge of sorts near the southern edge of Europe.

While jet-setters frolic in now-gentrified coastal Croatia and Montenegro, forward-looking would-be expats from Western Europe are trickling in to scout for seaside real estate in what could be the next Riviera; others are considering a life of urban pleasures in a capital that swapped its drab Soviet-style gray facade for a bright palate of primary colors.

Tirana’s old-fashioned eateries, coffee houses and raki (fruit brandy)-soaked taverns now share the sidewalks with trendy bars, fancy restaurants and stylish boutiques. Here, an apartment in a newly-built residential complex will set you back as little as $40,000. Outside the city, affordable real estate is drawing newcomers to places like the charming town of Saranda on the pristine Ionian Coast, a largely unspoiled stretch fringed by white-sand beaches. Here, in this underdeveloped Mediterranean, condos start at only $50,000.

But Albania has more to offer than a new attitude and rock-bottom property. It could be an option for those seeking to reduce their tax burden. With high-tax OECD nations like the U.S., UK, Australia and Germany dead-set on putting tax havens out of business—claiming they deprive their government coffers of billions in revenue and encourage money laundering and other illegal activity—Albania is quietly playing up its tax stance (generally a flat 10% on personal, corporate and capital gains earned within its borders). And the government is actively seeking to attract foreign investment while becoming even more taxpayer-friendly.

Although it’s unlikely the country will morph into an honest-to-goodness tax haven, as Albania finds ways to provide more tax relief and becomes wired into global financial networks it could offer many of the benefits without the official label—something that could keep it from being an object of special scrutiny, prompting opponents of low-tax jurisdictions to target the country as a conduit for dirty dollars and a lock box for renegade fortunes.

Only time will tell whether Albania will emerge as a popular refuge for globetrotters and their assets. For now, it’s an under-the-radar retreat offering an intriguing mix of tantalizing contradictions and new promise.

Note: Unfortunately, security requires a mention. While Albania is troubled by petty street crime, primarily pickpockets in day and more daring types after dark, the country is usually quite safe. The exception is area near the Kosovo border, a wild, often dangerous frontier (think armed gangs and scattered land mines) that should be avoided at all cost.

Stay tuned for a detailed expose of Albania by Phillip Townsend in a forthcoming issue of The Q Wealth Report.

Phillip Townsend, an international consultant and writer with close to 25 years’ experience in offshore and global lifestyle planning, authors a new blog on freedom, privacy and prosperity. Visit http://offshorelifestyle.blogspot.com

by Peter Macfarlane, Offshore Banking expert for The Q Wealth Report

Strange as it may seem, given all the hype in the news recently, when I started to search on Google for the blacklist of non-co-operative tax havens and bank secrecy countries published recently by the OECD at the behest of the London G20 meeting, it was mighty hard to find the complete list! Even on the OECD site after visiting multiple pages, I found only a pdf file that by no means makes the blacklist clear.

I suppose I should not be surprised, however – for, as I wrote in my article G20 and OECD: Much Ado About Nothing this whole campaign is more about publicity, distractions and scare tactics than real action against tax havens. The list on the OECD site is obviously the result of a lot of political horsetrading – would you believe for example, after all the recent hype, that the OECD does not list Luxembourg and Switzerland as tax havens? And how on earth did Chile get on the list – did you ever hear anything about offshore banking in Chile? While Hong Kong, a major offshore financial hub,  escaped listing altogether, for fears of upsetting the Chinese.

Here, then, for the record is a complete list of non-cooperative tax havens as published by the OECD, for which I would like to thank the print edition of the Spanish newspaper El Pais dated April 4th, 2009. In fact, there are three lists: the blacklist (countries that ignore foreign fiscal authorities) a grey list (countries that supposedly lack fiscal transparency but have commited to change) and a third list, neither grey nor black, of countries that are “non-co-operative financial centres.”

THE BLACKLIST

Costa Rica, Philippines, Malaysia

THE GREY LIST (COUNTRIES THAT HAVE COMMITTED TO CHANGE)

Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrein, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Cyprus, Dominica, Gibraltar, Grenada, Guernsey,  Isle of Man, Jersey, Liberia, Liechtenstein, Malta, Marshall Islands, Mauritius, Monaco, Monserrat, Nauru, Netherlands Antilles, Niue, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and Grenadines, Samoa, San Marino, Seychelles, Turks and Caicos Islands, US Virgin Islands, Vanuatu (Uruguay was oficially added to this list a few days later)

NON-COOPERATIVE FINANCIAL CENTRES

Austria, Belgium, Brunei, Chile, Guatemala, Luxembourg, Singapore, Switzerland

by Peter Macfarlane, Offshore Banking Expert for The Q Wealth Report

To judge from my inbox, the grandstanding by G20 leaders and the OECD is having its desired effect. In fact, it has two aims:

1. Publicity that portrays Brown, Obama and Sarkozy in a positive light while distracting voters from all the problems at home, caused by bankers in their home countries.
2. Scaring people off investing money in tax haven banks (ie, those banks in countries where banking secrecy is written into the law).

Of course, we cannot afford to dismiss the new OECD blacklists out of hand. But neither should we panic. And above all we should not be rushed into decisions that could cause problems down the line. Strategy for building wealth offshore should be well thought out for the long term. If you are one of the many who are concerned that your tax and offshore banking arrangements may not stand up to new scrutiny, then you should be taking some action now to put things right – but not panicking. We are happy to refer our readers informally to appropriate professionals.

Tax evasion through offshore personal bank accounts really is a thing of the past. It’s been passe for years. It’s not a particularly attractive business for any tax haven bank because it has the potential to cause lots of problems for relatively little reward. There are so many ways you can legally protect your privacy without having to rely on bank secrecy. For those who are interested, I’ve written a more in-depth article on the subject of the G20, the OECD and Banking Secrecy here.

We never have and never will promote tax evasion in The Q Wealth Report. We believe in full compliance with all applicable laws. That is what we write about consistently, and we have done so for well over a decade. Our view is that offshore banking is just one essential part of an overall long term strategy. Most of the clients I deal with these days are not motivated so much by tax (although that is obviously one of their concerns.) Most people are going offshore these days motivated more by security, asset protection, and the much better opportunities that exist offshore to profit from the recession. You can work, invest, retire or live in the world’s best tax havens.

My clients detest instrusive, Big Brother style governments. They subscribe to the view that attempts to redistribute wealth will simply end up redistributing taxpayers, who are increasingly voting with their feet. Our belief is that it’s much better to be living legally tax-free in a low-cost, healthy, tropical paradise… earning your living or managing your investments over the internet from a secure country where banking service and secrecy still go hand in hand. Meanwhile you can watch on TV as things get worse and worse in G20 countries, rather than watching from your window!

I’ve always written that if you need to rely on banking secrecy to protect yourself, you might as well give up. By that I mean that if you want to protect your assets, you should hide them where they cannot be found. You should take care to avoid any and all paper trails leading to them. If nobody knows where to find your stash of cash, nobody will ask your offshore bank about you. That is true secrecy. If the taxman knows where your money is, it’s already too late.

I imagine some people will be reading this article as first time visitors to The Q Wealth blog, who are keen right now to know what banks and countries are safe to invest in. Well my basic advice is to wrap everything in secure offshore corporate structures (for example, Belize or Panamanian corporations). Do this through reputable professionals who respect security – not through internet merchants competing to provide the lowest price, who just want to sell you a stack of papers and then move on to the next case (until it is time to charge your annual renewal fee).

If you feel that your financial arrangements are not watertight, then now is a good time to start taking a look at them. Offshore banking is one important aspect of any overall financial privacy and asset protection structure – it is covered in our free e-book The Practical Offshore Banking Guide 2009. Then, you should be looking at other wealth preservation and alternative investment strategies – for example, we have another free e-book covering Precious Metals Investments. Gold Bullion is one of the most secure, inflation-proof investments, and in the e-book we tell you how you can legally buy and store it offshore. Oh, and did I mention that there is absolutely no requirement to report gold bullion on your tax returns?

Then there are many other things you can do to protect your assets and help them grow. Consider second residency or even a second passport. By now we are getting more in to intangibles. Second passports can increase your security and flexibility. Then again, they could solve any OECD/G20 banking secrecy problems at a stroke! By changing your citizenship to a neutral country that does not tax its expatriates, you can give your asset portfolio and offshore bank account a new lease of privacy.

Of course, in this article we can only scratch the surface. The good news is that in our quarterly Q Wealth Report newsletter you will benefit from our first hand reporting and updating of news affecting your offshore investments. We don’t just get our information from the internet. I myself spent last week flying around Europe for a series of meetings with high level bankers and tax haven government officials, because I know the things they say off the record often mean more than the committments they make on the record.

As a subscriber to Q Wealth Report, not only do you obtain instant access to those two e-books plus a series of other special reports and white papers, but you will have access on an ongoing basis to this unique first-hand insight that I don’t believe you will find anywhere else. You will also have privileged access to our network of Q Wealth Experts. These are people located around the world who know and understand, live and breathe, freedom, wealth and privacy.

With the right team on your side, the latest OECD efforts really are “much ado about nothing.”

by Peter Macfarlane, Offshore and Non-Resident Banking Expert for Q Wealth Report

At last we are seeing some sense in the anti-tax-haven rhetoric being rehashed by the mainstream press. An interesting article by Richard W. Rahn in the Wall Street Journal sets out to defend tax havens and the useful role they play in the global economy:

If the government suddenly said you would incur more onerous and expensive tax regulations and reporting requirements if you moved your business to a low-tax state such as Texas or Florida from a high-tax state such as New York or California, you would be justifiably outraged. Now substitute Switzerland and Bermuda for Texas and Florida, and France and Germany for New York and California, and you’ll understand a new form of “tax protectionism” that is infecting Washington.

Tax evasion is illegal…  surely there can’t be many people left in this day and age who would seriously believe that they could just open an offshore bank account in their own personal name, not declare it, and thereby evade tax. As you can see from reading publications like my Practical Offshore Banking Guide 2009, it is just a tad more complicated than that. And the vast majority of people I know who are offshore do so perfectly legally and in full compliance with the laws of their country of residence.

Of course, the best way to go offshore is to move yourself. That rather takes the wind out of the sails of fuzzy thinking leftists who try to argue that if you are living in a country you should pay for government services there (quite apart from the fact of whether you actually use those government services).

Moving offshore yourself is very practical these days for many entrepreneurs and business people, or even many retired professionals. They can do a little consulting or investing on the markets over the internet from a home office, fly back home once in a while to take care of those little bits of business that still require personal physical presence… and they can quite legally live tax free and stress free in a tropical paradise (or maybe a clean air mountain paradise like Andorra if that is more their thing.) That’s what we have been preaching for years here at The Q Wealth Report.

The current warpath being beaten by Senator Levin and his crew is flawed, as the WSJ piece points out, because tax evasion is already illegal. “It is a fool’s errand to pass ever more laws against things that are already illegal…” says Rahn. More tellingly, he presents evidence to back up his claim:

The chief tax writer in Congress, House Ways and Means Committee Chairman Charles Rangel, Treasury Secretary Timothy Geithner, and former Senate Majority Leader Tom Daschle apparently did not report all of their foreign-source income. Their actions tell us that either the tax law is too complex, or they thought the tax burden was excessive. Would their behavior and that of millions of others improve by making the tax law more complex and punitive?

Finally, Rahn leaves us with what is perhaps a chilling thought for the future of a collapsing US economy, or perhaps just an accurate vision of the future:

The proposals by Messrs. Dorgan, Levin, Baucus and the Treasury will almost certainly have the unintended consequences of driving more U.S. businesses elsewhere, discouraging foreign investment in the U.S., and actually encouraging more U.S. investors to move their funds (either legally or illegally) not only out of the country, but to places in Asia or the Mideast that tend to be less cooperative with U.S. tax authorities than are the European and British low-tax jurisdictions.

Well done to Mr Rahn and the WSJ for sticking up for beleagured tax havens. Here at The Q Wealth Report we will continue to inform and entertain our readers with practical information on how to move yourself and your money offshore, how to create a new stream of wealth with your new offshore business, and how to do everything within the law. Of course, our best practical “how-to” information is reserved for pid-up subscribers to The Q Wealth Report. Besides instant access to our downloadable reports on offshore banking and gold bullion investments, and the archive of previous editions of The Q Wealth Report, an individual consultation with Peter Macfarlane is included in the benefits of signing up. What are you waiting for? Join Q Wealth today!

No, it’s NOT the beginning of the end for tax havens, but they will be slightly different… by Shannon Roxborough for The Q Wealth Report

Mistakenly viewed primarily as playgrounds of the ultra-rich, vehicles for tax evasion and shelters of the proceeds of criminal activity, the 40 some territories around the globe that are considered tax havens have been receiving some unwelcome attention lately.

It has, in fact, been a rough past year or so for the world’s low-tax and offshore centers. They are finding themselves increasingly in the crosshairs of the cash-strapped G-20 and the Organisation for Economic Co-operation and Development (OECD), a Paris-based bureaucracy run by high-tax nations such as the United States, UK, Germany and France.

Desperate to prop up their ailing economies, these countries are aggressively seeking to replace some of the trillions in taxpayer money that been used for stimulus packages and handed over to corporate interests in the form of bailouts.

In the latest escalation of the war on fiscal shelters, in their zeal to track down wealthy tax evaders, industrialized nations are intent on shredding privacy laws the world over. Half a dozen countries from Switzerland to Hong Kong have already caved to international pressure and threats of sanctions, agreeing to lift the veils of secrecy that have shrouded them for decades, and in some cases, centuries.

The momentum against tax havens started picking up speed last year thanks to U.S. Senator Carl Levin, a long-time foe of offshore tax havens, who insists they deprive government coffers of $100 billion in annual revenues and says “Tax havens are engaged in economic warfare against the United States and honest, hard-working Americans”—some argue that high total U.S. tax burden, which wipes out about half of most Americans’ incomes, is economic warfare.

The U.S. Congress last March began zeroing in on Swiss bank secrecy after UBS admitted helping American clients conceal assets from the government. The OECD recently blacklisted Switzerland and a number of other countries and jurisdictions because they “do not furnish banking information to tax authorities of other countries within the framework of income tax evasion.”

The truth is this political effort is not so much about snaring tax cheats as it is about the bigger picture: the long-term goal of destroying tax havens. Why? The answer is simple: tax-happy nations fear fiscal havens because they promote tax competition, financial privacy and fiscal sovereignty, all of which limit the ability of governments to act as monopolies.

Even with the stepped up efforts of their opponents, all is not lost. The growing coalition of world leaders may be softening some tax havens’ traditional codes of silence, causing the pillars of secrecy surrounding financial transactions to crumble, but most who use these sanctuaries to privately safeguard their assets, run their businesses and protect themselves and future generations have little to worry about (unless they happen to be on one of the clients lists that are being handed over to authorities).

Tax havens will continue to play a critical role in global finance for the foreseeable future. Besides, for those with real concerns about the security of their assets and holdings, there are many other privacy-conscious and tax-friendly places that manage to fly under the radar of financial watchdogs, providing the perks of tax havens without the scrutiny.

In the coming issue the Q Wealth Report, I’ll provide insights into one such place—a little-known lifestyle haven that doubles as an unlikely tax refuge.

Shannon Roxborough, editor and publisher of the global lifestyle magazine Borderless Living, is former correspondent with Money magazine. A widely-published writer and international consultant, he in an expert on living and retiring abroad and offshore planning. Visit www.BorderlessLiving.com.