Monday, June 25, 2007

Offshore idiots


This week newspapers in the UK are assisting the UK government in their SCARE campaign against offshore accounts. Of course... they are NOT TELLING YOU all the facts.

As I have told you in my previous blogs there is a HUGE difference in setting up accounts offshore as a person and setting it up as a company.

The story below, from one of the UK newspapers are telling you their story.

Let ME teach you how to do it, and why you should not be afraid to set up offshore companies or accounts.

The first rule

Do not ever set up an offshore account outside your country in your own name!

The second rule

Do not ever speak with a UK accountant about offshore tax planning!

So what will you do to act correctly? Here are my top 10 Tips!

Speak to a professional, international tax specialist outside your country that ONLY does this job for a living and are updated on all international rules and bank regulations daily.

Choose a company to work with that has years of experience and are established in the market place. Do not answer a small add that you see in the newspapers....

Remember that it is your right to do your international taxplanning and do what ever is needed to not pay more taxes than you have to, legally.

Choose a durestiction that is far out of the control of the government in your country.
Jersey and BVI would not be good choices if you are in the UK!
Cyprus and Seychelles would be the ideal solution for you.

Create a clear vision of what you would like to achieve in the next 5 financial years in your life
and your business to help the consultant help you prepare for such a plan.

Ensure that your bank accounts in the country that you are living in is never overdrafted as you would need a bank reference letter from your bank to establish a company offshore even though the account is not in your name, you would be a signatory and this requires a due diligence.

When you decide to set up a company, do not use a name of the company that will be related to your name in any way. Do not call it your last name or for name.

When you want to have an offshore account you must FIRST set up an offshore company, then set up the bank account. This way the account will not be in your name, but the money in the account will belong to the company. This will secure your identity but still give you full access.

Choose a bank that will assist you with the correct internet and card solutions

Do not speak to anybody about that this company is yours.
Especially not your accountant.

I will be happy to assist you in any way I can so feel free to contact me on

Now, here is the scare story that you will NOT ever experience when you use us to set you up correctly!

340,000 offshore account holders miss tax deadlineBy Harry Wallop, Consumer Affairs CorrespondentLast Updated: 2:51am BST 23/06/2007

More than 340,000 people face the prospect of criminal prosecutions after failing to declare unpaid tax on offshore bank accounts to the taxman, it emerged yesterday.
The possible prosecutions follow a major crackdown by the HM Revenue & Customs on individuals who held overseas bank accounts and failed to declare tax to the British taxman.
The crackdown has identified about 400,000 people, from owners of holiday homes overseas to sophisticated City investors, who have offshore bank accounts and are not paying the right amount of tax on any interest earned from that account.

advertisementPaul Franklin, a spokesman for HMRC, said: "There used to be a general belief amongst many people that if you earned the money overseas, you didn't need to declare it.
"That's just not the case."
The tax authorities launched an amnesty earlier this year to encourage people to come forward and pay the estimated £1.5 billion shortfall.

The deadline for the end of the amnesty was midnight last night, but by yesterday evening just 56,000 of the 400,000 people identified by HMRC had come forward.
Those that did make the deadline have to pay their unpaid tax, plus interest. They also face a fine equating to 10 per cent of their unpaid tax.

Yesterday 180 of the 700 staff at the Revenue's call centre in Dundee were dedicated to answering requests for the HMRC's 44-page booklet spelling out what taxpayers have to do.
Though there was a late surge of people calling the helpline the great majority of the 400,000 failed to come forward.

These people now face paying not only their unpaid tax, but also a penalty of up to 100 per cent of that amount.

More importantly, they face criminal prosecutions.
"In serious cases, you can go to jail for this," said Mr Franklin.

"There is little excuse not to have declared your offshore tax."

He insisted that HMRC was very happy with the number of people confessing to tax shortfalls, saying that many of the particularly serious offenders were the ones that had come forward.

"It's the first time we've ever conducted an amnesty of this kind, and we're very pleased with how it went," he said.

Friday, June 22, 2007

Lately many people has written to Jarl Moe, yes me.... and said that they are afraid of articles like the one below.

Now, listen....

The only reason that some people got in trouble with the inland revenue and theese days are getting letters in their letterbox is because they where so stupid that they put their own name on the accounts, as the owner of the account!

Jersey and BVI where popular places to register their accounts at and now of course they get to pay the penalty for the wrong tax advice, or taking no advice at all.

Our company set up offshore companies and accounts for many people every week and of course our job is to safeguard your assets and do your taxplanning both legal and correct.
When you set up a company this company is a separate legal identity than you, and it is not you that establish bank accounts, it is the company.
However, you can be the signatory on the account and access funds for the use of moving the company and your business forward.

So, in our case you are 100% safeguarded from the horrors of the section below.

If you wish to know more on how to pay zero tax legally, give us a call.

Have a great weekend!

Best wishes
Jarl Moe

No hiding place offshore now

The days of faraway tax havens have gone. However, non-taxpayers can still get some good rates overseas

Published: 14 April
The days when an offshore bank account meant keeping your financial affairs secret from the tax man are over. Customers of offshore accounts should have had a letter last week notifying them that details of their balances and interest payments will be passed to the Inland Revenue starting from the new financial year.
Moneynet savingssearch The days when an offshore bank account meant keeping your financial affairs secret from the tax man are over. Customers of offshore accounts should have had a letter last week notifying them that details of their balances and interest payments will be passed to the Inland Revenue starting from the new financial year.
Under last year's Finance Act, the Inland Revenue has the power to swap information with other tax authorities. The Government is agreeing a range of reciprocal arrangements to elicit more information about the undeclared income of UK residents. In turn, financial information will be passed to other governments' tax authorities about their citizens. These steps are intended to reduce dramatically money laundering and tax evasion.
Historically, two of the main factors for opening accounts offshore have been tax avoidance and tax evasion, though they are not not the only ones. With interest rates offshore now running at similar levels to the best available from UK savings accounts, there are few benefits for most of
us in an offshore account.

Donna Bradshaw, a director at independent financial adviser Fiona Price & Partners, says: "If you are a UK taxpayer there is no benefit. The rates are not as great as they used to be. People are going to look offshore only if they live overseas. Even then, if they are going to America it is not a good idea.

"All the [tax] loopholes have been closed. For people who are non-taxpayers there might be benefits, but rates in the UK are good, so why bother? If you are a non-taxpayer you get interest paid gross anyway."

People travelling abroad might be tempted by opening an offshore account, but there are practical difficulties, says Ms Bradshaw. Minimum balances will usually be high (see table), as are the minimum transaction sizes.

David Walker, senior tax consultant with accountant Bentley Jennison, also dismisses an offshore account for most people. "Unless you can take advantage of having money in a different jurisdiction, there is no point," he says.

"People think if you have money offshore you don't pay tax. That's not true. There might be non-taxpayers who can take advantage. If you go to a country regularly, you may want to have currency there rather than a foreign exchange account here: you might pay less commission." But offshore accounts score heavily for people whose earnings are all or in part from abroad and who are domiciled abroad.

"If someone is a UK resident but non-domiciled by birth or background, then an offshore account would be very useful," says Mr Walker. "They might work part of the time abroad. So they might be paid for offshore activities offshore and would pay tax on offshore accounts only if they bring money into the UK."

There may also be times when it is tax-efficient to roll up interest on an offshore account to have it credited after leaving the UK. For someone non-UK domiciled but with UK property interests, it may be possible to reduce inheritance liability by taking savings outside the UK estate.

But the days of using offshore accounts to hide deposits from tax authorities are well and truly gone, says Brendan McMahon, a partner with PricewaterhouseCoopers in Jersey. "There are very strong money laundering rules here," he says. "Any evidence of tax evasion or illicit activities mean that here the account will not be opened. There are very strong procedures to ensure this doesn't happen. Unlike in onshore jurisdictions, anything that happens wrongly generates a lot of adverse publicity."

It is not necessary for an individual to show that he or she is a non-taxpayer in the UK to open an account offshore. But a person can expect an increasingly rigorous check before an account is opened, especially if depositing large sums.

Northern Rock operates offshore accounts in Guernsey and the Bahamas. Tony Armstrong, director of corporate relations, says: "For both of our operations the fundamental is for verification of identity. That is a particular requirement for Guernsey. Applicants must complete the form, showing the name and address of their bank. We send this to the bank to confirm they know them, and that the signature is as shown.

"In the Bahamas, there are new verification of identification procedures which form part of our terms and conditions for an account. These are a good deal more comprehensive. There are requirements on bankers for verification of identity and national identity; confirmation of sources of income or wealth; confirmation of the purpose of an account and the potential of account activity; confirmation that the account holder has the right to beneficial use of deposits; and particularly for independent verification of any information supplied; together with a form for each applicant."

Reviews of procedures in other jurisdictions, including the Channel Islands, aimed at stamping out money laundering could lead to similar requirements in other offshore centres. Although some have been criticised for failing to co-operate with the major nations in clamping down on financial wrongdoing, most are now moving quickly to set up more rigorous checks.

Failure to act would have put at risk the more important role offshore centres have for major corporate clients, who continue to avoid tax liabilities through careful planning. And the loss of that business is something the offshore centres are very keen to avoid.

This story is applicable for people who set up accounts in their own name and DO NOT use the benefit of the correct company structure.

You are going to be smarter than that, right?

Wednesday, June 20, 2007

What does people ask Jarl Moe?

Hello again!

Lately I have had many of my visitors of the Jarl Moe Blog asking me similar questions, so I thought I better make a summary of some of the most common questions and the answers...


A corporation is an entity recognized by law as a separate "person" with limited liability. A corporation has the option to sell shares, the right to sue and be sued, and has perpetual existence.

Offshore corporations may be used to own and operate businesses, issue shares, bonds or otherwise raise capital, guarantee obligations, hire employees, buy goods and services, sell goods and services, make contracts, rent office space, maintain checking and saving accounts, and maintain retirement plans for employees. Although most offshore corporations are private and closely held, some are publicly traded on major stock exchanges.

The Articles of Incorporation is the document which establishes the corporation and contains basic information such as the name, share structure, and purpose of the corporation.

The By-laws, or in some jurisdictions "Articles of Association", are rules the corporation creates for its shareholders, officers, and directors. By-laws are adopted by the Board of Directors as one of the first organizational steps in setting up a corporation. Upon instruction, we can adopt a standard set of By-laws for a new corporation. Unlike Articles of Association, By-laws are usually maintained internally but may be publicly filed if requested.

A corporate search will reveal the name of the corporation, the date of existence, amendments, and any other publicly filed document. Under Panamanian law for example, there is no requirement that the names of corporate officers, directors or shareholders be filed in any public registry. Such information, therefore, remains confidential.

Bearer share certificates do not indicate the name of the owner. The certificate is endorsed in blank such that the person having physical possession of the document is the owner. Bearer shares facilitate the transfer of assets because transfer of ownership is accomplished simply by the transfer of the certificate. In most of the set ups that we arrange, Bearer shares are not used.

Registered share certificates indicate the name of the owner on the document. The name of the shareholder is also recorded in the internal corporate records of the company. Although the registered owner is recorded in the corporation's internal records, no public registry of shareholders is maintained. The share registry is an internal corporate document available only to directors, officers and shareholders, under conditions specified in the jurisdiction's corporate statute.

Shelf Companies are ready-made, never used corporations that have been created to meet a client's immediate needs.

A Registered Agent is required to ensure that the corporation has an assigned representative at a known address to receive all service of process (legal notices) on its behalf. The Registered Agent forwards these documents to the address of record of the corporation.

There is nothing illegal about moving assets offshore. It is when you move the assets into accounts offshore and do not declare their existence to the tax authorities that you break the law. Any assets over which you have control, domestic or offshore, are probably liable to taxes in your home jurisdiction.

Moving some of your assets offshore provides you access to modern (and ancient) methods of protecting your assets and reducing your taxes using trusts, international corporations, foundations and other legal entities.

Asset Protection is a term used to describe the concept of legally transferring your assets into a legal entity which will protect them from attack by frivolous litigation, seizing from government, attack from an estranged spouse - in fact anything which may threaten your hard earned wealth.

If I must declare my offshore assets, how can I use an offshore plan to legitimately reduce my taxes?

Taxes must be paid on profits made on assets under your legal ownership. By the use of certain offshore entities, which vary according to your home jurisdiction, a certain proportion of your assets will no longer bear taxes at the same rate. Please contact us for a plan based on where you reside.

A friend said that offshore asset protection is immoral, what are your views on that?
Some people are quite happy to stay in a system which allows vultures to pray on exposed assets. That is their individual choice. There are other people who prefer to leave the country they love to get away from the system. Offshore asset protection is somewhere in between. There is nothing immoral in trying to protect your hard-earned assets so that you and/or your family can benefit from them later on. It is the essence of rational self-interest.

If I open an offshore structure, will this lead to tax authority scrutiny?
What we advocate is not illegal; it therefore does not attract undue attention from the authorities. It is activities like money laundering, tax evasion and controlled accounts that the tax authorities are interested in, not law-abiding citizens protecting their assets and lowering their tax burdens.

Which is the best offshore center to use for asset protection and/or estate planning?
Most modern tax havens are very alike with respect to their tax laws and services, although some do offer entities not available in others. Certain tax havens have developed bad reputations over the years due to abuse by certain elements of the offshore industry, but most are quite safe. We have worked in perfect harmony with the Seychelles as a ZERO tax durestiction for the last 26 years! And CYPRUS are one of the best places to set up any international business within Europe with as low as 10% flat tax.
A combination of the two create the best harmony if you have a good turnover.

Can I retain control over my money, possibly through investment or bank accounts in my home jurisdiction?
Many people would like the 'safety' of an offshore asset protection structure but would like to keep complete control over the assets, trading accounts etc. This is possible but gives a direct link to the assets and will probably lead to any legal structures that were set up being ignored for both tax and protection purposes. Offshore asset protection does require you find people you trust to advise you and take care of finances for you.

How much does an asset protection structure cost?
At Moneyserve we believe in providing value for money for our clients. Furthermore, when providing our services, our focus is on building the quality and value of relationships with our clients over an extended period of time. Basic asset protection structures start as low as US$1,500 for an average family, with annual costs as low as US$1,800. Of course this cost rises with the complexity involved, but rarely exceeds US$30,000 initial cost.

What is the minimum amount I should start with?
That depends on your reasons for going offshore. If it is for asset protection you should be considering how much you are risking by not going offshore, namely lawyers fees, time, loss of assets etc. If it is for tax reasons you should be looking at the annual costs against how much tax you can save (i.e. US$18,000 is 30% of US$60,000).

Are there any other advantages to going offshore?
Once a structure has been legally created it can be used for international trade and investment. This opens up a whole new arena that the average unstructured citizen cannot usually access.

How do I start?
The best place to start is to contact us at

Offshore merchant accounts

Many of our clients are interested in ways to reduce their current tax liability with the current business they have. Some are concerned about ways to move some of their assets "offshore" without throwing up a "red flag". Others are interested in setting up a new business, perhaps via the Internet, and need a way to accept credit orders. Regardless of the need or concern, an "Offshore Merchant Account" may be the ideal answer for you...

A merchant account is basically an account or facility that allows you to accept credit card orders from your customers. It's that simple. If you accept credit card orders already with your existing business, then you are already familiar with this. But what is the difference or perhaps advantage of using an "offshore" card processing service vs. a local or domestic one?

Well, one thing that is certainly true about the US credit card business, is that it has become very competitive. This has been both a good thing for both consumers and business owners alike. As a consumer, you know that interest rates charged on credit card balances have come down. For business owners, it has meant that where as you were charged up to 7% in the past to process your customer's credit card purchases, those rates have come down to about 3% on average. All positive news. But, there are still problems for the US small businessman wanting to set up his or her own merchant account.

One major problem is of course the application requirements, and the possible deposit requirements. Some banks or credit card processors will not even accept your application unless your business has been operating for two years or more. Others want a security deposit of $ 5,000 or more. Some others even want to "hold back" your monthly card payments as an additional "security deposit" for possible "charge backs". In addition, especially in the case of US banks, they act as if they are doing you a favor to take your business. Aside from all this, we know of some clients that have had their merchant account "pulled away" simply because their business started to grow. What am I talking about?

Well, because every US bank is now paranoid about such things as "money laundering" and "suspicious transactions", any sudden change in your business volume sparks a reaction. We know of one client that was given a "we are closing your account" letter by his US bank, because his monthly volume went from $ 10,000 per month up to $ 18,000 per month in a fairly short time.

The bank said it was "suspicious". The client said it's called "advertising". Well, you know what they say, people that fail in business end up in banking....

This is one reason why you may want to look for a bank or credit card processor that understands your business, your needs, your problems - and is willing to help. Where can you find someone like that? Well, it all starts with being able to look beyond your own backyard.
Most people would agree that technology and modern telecommunications has provided at least some benefit. We now have fax machines, e-mail, and of course the Internet. What many people do not think about however, is the fact that the world has become a much smaller place.

What this means for the business owner is, you no longer are "locked in" to doing business with just the bank or company in your town or state. You can literally "shop the world" for the best rates, the best products, the best service, or what ever. You now can do business with a bank or credit card processor in Germany, Singapore, Holland, or any place else just as easily as "the bank down the road". In fact, nine times out of ten, you will find the level of service to be much better with a bank half way around the world, then you will with your neighborhood bank.

Why? They want your business, and they are willing to prove it. The other benefits are obvious. If you intend to be virtual, the best place to begin is by becoming virtual in fact. An offshore merchant account places you in a virtual / offshore jurisdiction with favorable tax consequences.
The problem of course with some offshore banks or credit card processors are the higher processing fees, when compared to current US rates. The fierce competition that has been seen in the US, has not reached some parts of the world, at least not yet. However that is slowly changing. In addition, such things as "Internet Banking" and offshore merchant accounts are new services that many offshore banks are just starting to take a look at. Even in a banking location such as Panama (with over 130 banks), these services are not even available with a handful of banks.

However, we did find a very reliable credit card merchant account service provider that wants to change all that. They are based in Europe, they have been in business for over 30 years, and their fees are extremely competitive (with both US bank rates, and especially their "offshore" competition). In addition, they will gladly accept a new business without any costly deposit requirements. This is the type of company to work with, because they want to work with you.
I know what you are probably thinking, "This all sounds very interesting, but what is the real benefit for me to do business with an offshore merchant account provider". Well, being able to get better service, little or no hassles getting your account opened, and lower or perhaps no deposit requirements are only the "tip of the iceberg".

The real benefits to you as a business owner are the tax reduction opportunities that become available through the use of a separate offshore-incorporated company (your company) to handle your credit card business for you. In addition, you also have a very legitimate and convenient way to get your business profits offshore. The fact of the matter is, if you have an offshore bank or merchant company process your credit card transactions for you, your money already is "offshore".

This being the case, you now have the means to really make the most of your business income and keep more of what you earn.

For additional information about obtaining an inexpensive offshore merchant account, or forming an offshore company for tax-advantaged strategies for your current business, please contact our office.

Jarl Moe