The mere mention of the words, "Tax Haven" and "Offshore Banking" immediately conjure up thoughts of fraud, money laundering, illicit drug trafficking, and with more recent events, terrorist activities.
However, there is another more legitimate side to the offshore banking coin. In reality, anyone who does banking outside of their domicile is "Banking Offshore". So, for instance, if you are a Canadian with a U.S. bank account, this would be considered offshore banking.
Offshore banking is considered shady in the U.S., probably because the general public does not understand what it is and how offshore banking works. Oddly enough, U.S. citizens are happily mislead to believe that banking anywhere outside the country is an unsafe practice. Additionally, the government does not like to see investment capital leaving the country.
Another reason for this is that foreign banks are prohibited from advertising and marketing their products and services in the United States, unless they comply with U.S. banking regulations. This is something foreign banks would not wish to do, since this would put them under the jurisdiction of domestic banking laws.
The truth is, most of the wealth in the world is not located in the United States. The largest and most secure banks in the world are in Europe and Asia. More than half of all worldwide wire transfer transactions, on a daily basis, occur outside of the U.S. through banks domiciled in tax free or tax friendly states around the globe.
Considerations for the Committed Sovereign Individual
First let's understand that it is perfectly legal and desirable to have business interests, financial holdings, and bank accounts in jurisdictions other than where you happen to be located. The world economy simply could not function if this were not the case.
Certainly foreigners invest heavily in the U.S. economy, including banks. Likewise, Americans invest in foreign corporations and banks to diversify their investment portfolios. A good example would be the sale of Chrysler, now owned by Daimler Benz. Many large U.S. businesses have in recent years been purchased by Chinese. A toll road in Indiana was recently purchased by a Spanish-Australian concern.
Most large companies now have a global reach and have been structured as "Multinational" corporations. Stock markets, commodity markets, security exchanges, and money markets are all global in nature, and can be considered "virtual" in the way transactions are completed.
In a truly mobile society, other aspects of self determination come into play for the astute individual wanting to be a sovereign individual. Most countries will not consider you a resident for tax purposes unless you are a resident for more than 182 consecutive days within a given year. This is the well documented strategy that has created the "6 and 6" economy that attracts the "Snow Birds" from Canada to Florida each and every year.
Another consideration is dual citizenship. It may be considered unusual and even frowned upon, but in most countries dual citizenship certainly is not illegal. Many people live the sovereign
lifestyle by designing their personal and business affairs to legally and effectively reduce tax burdens through creative estate planning.
Aside from work and career issues, the road block for most people is being able to maintain and afford multiple residences. Whatever your considerations may be, there is a wealth of free information available on the Internet to peruse and consider. Then prior to setting on a course of action, proceed with your own due diligence, followed by planning with the advice and services of qualified legal and financial planning professionals.
Disclaimer: This information should not be deemed as legal nor financial advice. Seek the counsel of qualified professionals. These comments are based on personal research and having the pleasure of being in the confidence of individuals I have known to be living an international lifestyle. - The Digital Nomad
Living The Sovereign Life and Financial Freedom