OUR MISSION

Our mission at WallStreetMasters is to enable our clients to legally build their assets and wealth faster and secure it from unwanted seizure using the following three methods:

(1) Increase the gains,
(2) decrease the taxes,
(3) protect the wealth from lawsuits and theft.

We accomplish this using a variety of legitimate and legal offshore (international) vehicles in various jurisdictions that have continuously been proven to increase and protect the wealth of our clients.

Offshore opportunities to build their profits as above are greater than ever for international businessmen and investors. All they need to know is where to find them and how to use them. Currently, some of the most attractive options are in the Bahamas, Cayman Islands, Vanuatu, Liechtenstein, Switzerland, and Western Samoa. Of these, the Bahamas, the Cayman Islands and Vanuatu are prominent financial centers rivaling even the financial cities of Tokyo, London, New York and Los Angeles for investments. We tailor the various offshore vehicles to specifically serve the exact financial demands of our clients.

In short, we pledge to provide our clients with the expertise to ensure their freedom to legally earn a profit, the privacy to enjoy it and the security to keep it.
 

OUR SERVICES

To accomplish our mission we have put together a highly dedicated and efficient team experienced not only in legal matters but also in computer skills and offshore management. We are easily accessible via phone, facsimile and e-mail and can access contacts in any part of the world at short notice. We can service all offshore banking and management needs and can satisfy requirements of individuals, small businesses and multinational corporations. Our computer consultants with over fifteen years experience can set up an internet presence offshore and can liaison with our legal team.

Our ultimate aim and goal is to work with individuals and corporations to develop a secure and confidential offshore business and investment structure. We do not, however, give tax advice but are willing to work with your current tax advisor.

We understand the domestic and international legal needs of businesses and their owners. Because clients' legal issues are driven by business considerations, legal advice is given in a practical and business context. Within the area of California business transactions and international and offshore business, we offer the following services:
 

* Company, Bank and Trust formation (U.S. and offshore)
* Business and Asset Protection Strategies (U.S. and offshore)
* Negotiation and Documentation of Contracts and Investments
* Buying and Selling Businesses
* Strategic Business Consulting and Planning
* Estates and Trusts
* Company Administration
* Corporate Directorships
* Nominee Shareholders
* Offshore Brokerages
* Intellectual Property
* Real Estate
* Internet Presence
* Immigration
 

WHAT IS AN "OFFSHORE HAVEN"?

An offshore haven is a country, or jurisdiction, that generally has more lenient financial and banking laws coupled with higher standards of personal privacy, than the home country. In the financial world, "offshore" means a tax jurisdiction other than where the investor lives.
 

WHAT MAKES A GOOD HAVEN?

A desirable haven should be politically neutral, follow a policy of free trade, not interfere with the commercial activities of corporations established there, and provide reasonable assurances of personal and corporate privacy.

Language, the quality of telecommunications, time zones, and availability of professional infrastructure are also important. Most popular jurisdictions have a legal system derived from a western country and greatly favor corporations, which are non-resident in nature. Finally, there must be a solid commitment to the protection of private property and the promotion of international trade.
 

WHAT ARE THE PRIMARY REASONS FOR USING AN OFFSHORE HAVEN?

Privacy. You have no rights to privacy in socialist countries and, if you reside in or are a citizen of the United States or Japan these rights are fast becoming extinct. On the other hand, offshore havens provide the most rights to privacy.

Asset Protection. To secure yourself against future predatory litigation. (If you earn $50,000 a year or more in the U.S. you will be sued an average of seven times in your life and this number is growing. If you live in Japan, you can be sure the government knows where and how much money you have in the banks). Those that would like to sue you to get your money will find it most difficult to bring a lawsuit in an offshore haven.

Tax Planning and Capital Growth. Offshore havens allow the advantageous use of foreign jurisdictions and their tax rules for reduction of tax liability and increase in the rate of growth of assets.

Estate Planning. Offshore havens provide the use of family and protective trusts, (possibly as an alternative to a Will) for accumulation of investment income and long-term benefits for beneficiaries on a favorable tax basis.
 

IS IT LEGAL TO OPERATE IN AN OFFSHORE HAVEN?

Yes it is. But most people such as Americans and Japanese falsely believe it is illegal to use tax havens to save taxes and provide security for their business. There are many U.S. and Japanese corporations who use offshore companies to do business. Exxon, Sears, Firestone, Boeing, Rockwell, Sumitomo, Daiwa, are some of the notable on a very long list of well known names from the ranks of corporate America and Japan. While corporate American and Japan have taken advantage of the global money markets using their offshore entities, individual investors have only just started to use them for their benefit. Most of America’s wealthy families, and a litany of political leaders, athletes, movie stars and other highly visible people, maintain foreign bank accounts or offshore trusts to protect and build their wealth.

If you maintain an account in an offshore bank, these banks do not provide reports to the IRS or Kokuzeicho on your income earned from certificates of deposit or other forms of investment. And, usually such earnings are considered tax-free in the country where the bank is located. But if you're from the U.S. or Japan you are expected to voluntarily report it. It has never been illegal for Americans or Japanese to invest offshore and maintain bank accounts, investment accounts, etc.; and it likely never will be.

The American and Japanese banking industry works closely with the IRS and Kokuzeicho to propagandize against offshore banking. After all, plenty of money from American banks (and some Japanese banks) is offshore. And the IRS and Kokuzeicho want to get their hands on that money.

You can be sure the U.S. and Japanese governments and their banking industries will continue their organized propaganda campaign. They will forever paint offshore havens as illegal and criminal. To the extent their lies and distortions succeed, American, Japanese and others will keep their money in their own countries where it can be easily controlled, taxed and exploited. You should not be victimized by this propaganda campaign. If you choose not to be fooled by them, you can reclaim your financial freedom and do so legally by moving all or some of your wealth offshore.

The following is a quote from a famous U.S. Supreme Court Justice that puts the concept of operating offshore to reduce taxes in its truest perspective.

"Where I live in Alexandria, Virginia, near the Supreme Court building there is a toll bridge across the Potomac River. When in a rush I pay the toll and get home early. However I usually drive outside the downtown section of the city, and cross the Potomac on a free bridge. If I went over the toll bridge and through the toll without paying I would be guilty of tax evasion. However, if I go the extra mile and drive outside the city of Washington to the free bridge, I am using a legitimate, logical and suitable method of tax avoidance. And, I am providing a useful social service as well"

             Louis D. Brandeis, U.S. Supreme Court Justice
 

WHAT IS AN INTERNATIONAL BUSINESS COMPANY (IBC)?

An IBC is a company established in a offshore tax haven country or jurisdiction which is usually restricted from carrying on business with persons resident in that tax haven jurisdiction, and cannot invest in real property situated in the jurisdiction, other than holding a lease of property for use as an office. An IBC cannot carry on any banking, trust, insurance or reinsurance business, or provide a registered office for other companies (to engage in the business of offshore banks, trusts and insurance, there are other legal entities that are used).

An IBC can invest in stocks and bonds, trade oil, gas, commodities, and any other general business not restricted by the jurisdiction.  An IBC is not taxed in the jurisdiction. Usually, there is a very small flat yearly fee that is paid to the jurisdiction to be allowed to operate the IBC.

An IBC can open bank accounts, retain local professional services, prepare and keep its books and records, hold directors' and shareholders' meetings in the jurisdiction.

ASSET PROTECTION BENEFITS OF AN IBC

An IBC can provide the following asset protection:

1. protect assets from creditors, malpractice claims, judgments, liens and bankruptcy
2. prevent erosion of assets from divorce or separation.
3. deter the initiation of civil litigation
 

TAX PROTECTION BENEFITS OF AN IBC

An IBC can provide the following tax protection:
1. eliminate the reporting and paying of income tax on earnings, interest, dividends and  investments
2. protect against high capital gains taxes and reporting requirements.
3. prevent inheritance taxes, estate taxes, executor’s fees and probate fees
4. earn tax free income through operation of an active business.
5. earn tax free income as a result of intellectual property (patents, royalties etc.)

PRIVACY BENEFITS OF AN IBC

An IBC can provide the following financial privacy:
1. prevent any knowledge of your assets from becoming public.
2. protect the privacy of your involvement with investment houses, brokers and securities markets.
3. protect the privacy of corporate ownership from becoming known.
4. prevent any person or government agency from gaining access to your hard currency.
 

WHAT IS A PRIVATE OFFSHORE BANK (POB)?

A POB is quite simply, an investment bank that the client owns by himself or with others that is situated outside the home country of the client in well-known offshore banking havens. Because these banks do not operate within the home country, they are not subject to the home country’s laws and regulations.

There is no more powerful method of making money globally than owning your own POB.  In addition to the customer conveniences of having the ability to exchange money easily and earning higher interest on foreign currencies and having the assets owned by the bank protected from foreign judgments, there are other attractive benefits.  By setting up your own POB you can legally operate an entire bank according to your personal priorities.  You can lend to third parties, make private investments, accept deposits, use trusts, purchase real estate at low interest, transfer currency at your discretion, offer your customers back to back loans, acquire optional merger funding and tap into escrow funds for short term interest gain.  Suffice it to say that the benefits available to POB owners far outweigh the advantages of most other investment vehicles.
 

WAYS TO USE A PRIVATE OFFSHORE BANK

POB's conduct banking and financial activities in an environment, which is essentially free of fiscal and exchange controls. They operate under very favorable banking regulations, or banking laws considerably less stringent than those in the investor’s home country. There are many ways that an investor can use his own POB. These include:

1.  Earning high commissions by attracting sources of capital in countries such as Japan, the U.S. or Europe and matching them with foreign banks eager to borrow money from abroad. (After the "Big Bang" deregulation in Japan, many Japanese investors will be interested in switching some of their deposits from a weak Japanese bank to a POB that earns higher interest for them).
2.  Earning high interest by making legal personal high interest loans in Japan and the U.S.
3 . Earning interest on the float time when a depositor writes an international check.
4.  Selling stocks and bonds and earning commissions on the sale.
5.  Issuing Visa and Master Card's to bank customers.
6.  Making money on currency exchange from Yen to Dollars, Swiss Francs, Pounds, Euro etc.
7.  Earning commissions on commodity brokerage.
8.  Providing insurance (life, casualty, auto, etc.).
9.  Offering confidential numbered accounts.
10. Providing trust services.
11. Taking advantage of arbitrage opportunities and currency trading opportunities.
12. Earning the spread on bank-to-bank loans by borrowing at LIBOR rates and lending at higher rates.
13. Earning a larger margin because offshore banks have no reserve requirements and can thus put all their funds to work.
14. Taking advantage of the benefits and protection offered by correspondent banks in Zurich, London, Monaco etc.
15. Attract large cash deposits in any foreign or domestic currency, book large internationally syndicated loans with participating banks located in various jurisdictions.
16. Avoid onerous debt equity ratios and lending restrictions in force in highly regulated jurisdictions such as the U.S. and Japan.
17. Provide clients with banking secrecy and confidentiality.
18. Borrow inexpensively at preferred lower than prime rates from European banks.
19. Make investments in high yield instruments.
20. Engage in currency exchange, commodities brokerage and arbitrage.
21. Provide trust, and cash management services.
22. Avoid payment of taxes on any profits.
23. Diversify your assets in offshore locations.
24. Obtain a real hedge against inflation by using currencies different from the inflating currency.
25. Make assets immune to court judgments, seizures and other judicial writs.
26. Enjoy the prestige of owning your very own international investment bank.
 

WHY A PRIVATE INTERNATIONAL BANK CAN PROTECT ASSETS

There are two primary reasons a POB can be so effective in protecting your assets.

First, as a foreign entity located in an offshore financial center that has strict banking secrecy and financial privacy laws, a POB provides a heavy layer of insulation between the assets of its owner and those who might wish to make claims against those assets.  Once the legal ownership of assets passes from an individual to a foreign entity such as a POB, it becomes extremely difficult for attorneys, creditors or other claimants to exactly identify the nature or quantity of those assets.

In addition, if the original transfer of the assets was carefully planned and carried out - and the POB set up so that the deployment of the assets is directed by a foreign management company under orders of the bank's foreign directors it can be virtually impossible for claimants to once again link those assets to the individual against whom the claims are directed.

Second, a POB- merely by virtue of its special powers and privileges as a bank - can cloak the movement of assets and routinely arrange for their investment or disposition without attracting attention.  By contrast, the same functions performed by an individual or corporation would stand out to anyone familiar with the normal pattern of personal or company financial transactions.  Activities involving assets placed in a POB are camouflaged by the activities of other commercial banks.  Thus, they do not attract undue attention among regulators or stand out on accounting ledgers.

For example, an interest payment made to a POB would attract no more attention than a similar payment to a Japanese bank.  However, if the interest payment were made to a foreign corporation or individual, it could be challenged in the event of an audit and would be easily noticed if the books were subpoenaed in a lawsuit by creditors or other claimants.  The same would be true for loans or loan proceeds.

People - even trained investigators and attorneys - routinely expect individuals to get loans from banks.  Thus, a loan to an individual or a business by a POB is far less likely to attract attention than a loan from some other source - even if the individual or company happens to be the owner of that POB.

Finally, banks are expected to make a variety of investments after all, investing is really the business of the bank.  Thus, a POB can easily deploy assets - and reap profits from investing those assets without notice, whereas an individual or company doing the same thing would again attract attention.
 

ASSET PROTECTION BENEFITS FOR BUSINESSMEN

There are numerous other situations where private international banking can offer protection for business assets.

Take, for instance, actions by aggressive competitors.  If your bank within Japan becomes involved in a business lawsuit, a court may give your opponent legal access to your financial records, seriously jeopardizing your legal position- If, on the other hand, your records are kept in a POB, they are impervious to court orders.  That's because POB's are jurisdictionally immune to service of process.

The laws of most international banking centers protect the confidentiality of financial dealings and protect banks chartered there from foreign court orders, writs of execution or attachment claims.  Under no circumstances can your POB be forced to divulge information regarding its assets or those of clients - even in a lawsuit.

Trade Secret Protection

Other important assets for which a POB can provide protection include your ideas.  Assume you have a formula or patent you want to protect.  If you copyright or patent the idea in Japan, you must disclose it to the Copyright Office.  In the process, your million-dollar concept becomes part of the public domain.  Before you can establish a firm market, the concept can be reformulated with minor changes and marketed by your competition.  Instead of going to the appropriate domestic office to file your formula, you can convert it into financial information.  Call it "exhibit to an agreement between scientist and the formula's owner". If the formula's owner just happens to be a POB, the exhibit is likely to be protected under the bank secrecy laws of the relevant international center.

Protection Against Product Liability Claims

Businesses that conduct their operations through offshore entities such as POB's may also gain some immunity against domestic liability - even if the products of that business eventually come back into the Japanese or U.S. market.

This protection was verified in 1987 when the Japanese Supreme Court ruled a Japanese firm could not be tried in California for alleged liability in a fatal 1978 motorcycle accident.  The high court concluded that, even though its products were eventually marketed in Japan, the Asahi Metal Company of Japan could not be sued for damages in Japanese courts because the company did not do direct business in Japan. The Justices held Asahi could not be expected to defend itself in the U.S. when it has no operations in that country.  The Justices also ruled any action by Japanese courts with regard to liability would interfere with the interests of Japanese courts.  Legal experts say the ruling makes it extremely difficult, if not impossible, to sue foreign manufacturers and other types of businesses for product liability damages.

Given that opinion, a foreign based business - even one owned by a Japanese citizen - might be able to insulate itself against Japanese liability claims by wholesaling its products to a POB that could then resell them to a Japanese distributor.  The business might thus be protected from liability claims because it did not do direct business in the United States., while the bank would be protected by virtue of the laws of its offshore jurisdiction,
 

ASSET PROTECTION BENEFITS FOR PROFESSIONALS

Professionals - especially doctors and other medical personnel who face the specter of enormous malpractice judgments, especially in the U. S. courts - are among the largest users of POB's solely for the asset protection benefits.

In the U.S. malpractice litigation has reached such a level that almost any doctor - no matter how much insurance coverage he has - could be hit with a judgment large enough to strip him of his assets.  At one time, doctors countered this threat by forming professional corporations and transferring ownership of their personal assets to the corporations.  However, legal opponents quickly saw through that ploy.  Today, almost all malpractice suits target the doctor, his insurance company and his professional corporation.  In addition, the courts have ruled separate holding companies set up by doctors to control their assets can also be 'cracked' and the assets attached on behalf of a malpractice creditor.  This left doctors with little choice but to move assets offshore - and a POB, especially one with foreign management, is the perfect vehicle.

Once again, if the bank and the assets are controlled and managed by unrelated third parties, it provides a significant buffer between the doctor and his malpractice creditor.  Even if he is forced to testify that he has placed assets with a foreign entity and identify that entity (which he will no doubt be required to do), he will be unable to define those assets or say how they are being used.

As a result, the creditor will most likely be unable to force disclosure of the size and location of the assets because of the secrecy laws of the private bank’s host country - and seizure of those assets to satisfy a judgment will prove impossible.

In fact, if the malpractice suit is frivolous (as many filed these days by unscrupulous lawyers are), a doctor's mere admission of having the bulk of his assets based off-shore could prompt abandonment of the suit - or, at the least, a low-cost settlement.  The reason is simple.  The lawyer will recognize that, even if he wins a full judgment in a court, he will have considerable difficulty in retrieving the assets from the foreign jurisdiction.  As a result, he may decide there are not enough readily accessible assets to warrant continuing with the suit.  And, even if he does decide to proceed, he'll likely be much more willing to compromise on a smaller settlement - just to ensure he gets something for his efforts.
 

ASSET PROTECTION VIA INTERNATIONAL DIVERSIFICATION

Wealthy citizens of many countries have lost their personal and business assets or been prohibited from owning certain assets because of changes in the political philosophy or leadership of their countries.  Diversifying your assets politically or geographically in a number of different countries can minimize this risk.  Besides, in these days of worldwide investment markets, it only makes sense to spread your assets among several nations, simply to avoid economic upheavals that may beset only one country.  Obviously, the more unstable your home country's military, political or economic system, the more important this tactic becomes.
 

AN IMPORTANT ASSET CREATED BY PRIVATE INTERNATIONAL BANK OWNERSHIP

Most people would probably think of POB's exclusively as a vehicle for protecting assets that already exist.  However, there is one asset that the ownership of a POB actually creates. And, though it is often overlooked, it can turn out to be one of the most personally satisfying assets you will ever have.

This valuable asset is the prestige that accompanies bank ownership - the respect and degree of influence that friends, business associates, and even strangers afford you when you own a bank.  If you don't believe a bank conveys a sense of power just look back on your own experience - when was the last time you refused a call from your banker, or failed to open a letter sent by a bank?  And, how much more quickly would you respond to a call from the actual owner of a bank?

After all, a bank projects credibility, substance - and money!

It’s very hard for people to ignore a bank - and that's one of the major reasons most POB owners become successful.  A letter in your bank’s envelope gets opened - and a message on your banks letterhead, signed by you as chairman of a bank produces action!

Whatever your goal is, your own POB can open doors that might be closed to you as an individual.  They can influence government officials or corporate executives, they can help in obtaining hard-to-get loans from other banks - and they can attract hundreds of thousands of dollars from depositors anxious to get their money out of countries beset by burdensome taxes, economic depression or instability.

Thus, one of the most important assets that a POB protects is the status that the bank itself creates.
 

TAX PROTECTION BENEFITS OF A PRIVATE INTERNATIONAL BANK

The ability to legally avoid undue tax burdens does not of itself excuse any taxpayer from paying taxes.  Further, the ability to use a POB as a means of tax avoidance does not in itself excuse taxpayers - individual or corporate - from paying taxes on their share of bank income.

However, an important distinction must be made between tax avoidance and tax evasion.  Avoidance means legally taking advantage of the law to keep from paying tax.  Evasion is illegal, involving willful criminal intent to defraud the taxing authorities.  Also illegal is the failure to file any reports generally required of investors with overseas business interests.

Legally constituted and operated POB's do not evade taxes.  However, in most cases, they can, and legally do avoid taxes pursuant to the terms and conditions of the tax laws, rules and regulations of the investor’s home country.  The complexity of the various countries' tax laws and the uniqueness of each situation make it virtually impossible to discuss a particular tax plan.  Planning of this type must be done on a case-by-case basis and constantly refined in accordance with the business dynamics of each POB.

For example, the Japanese Tax Code provides for taxation of a parent shareholder on undistributed profits from an ordinary foreign corporation.  However, international banks are a special kind of foreign corporation.  Because of privileges and exemptions Japanese tax law grants banks in general, and foreign banks in particular, POB's can often legally avoid undue taxation on profits derived from ordinary conduct of banking business.
 

THE DUALISM OF TAX BENEFITS

In order to understand the tax benefits associated with owning a POB, one must appreciate that it is subject to the tax laws of two jurisdictions: The home country of the investor and the host country of the offshore bank.  Tax benefits vis a vis the law of the investor’s home country generally involve methods of avoidance.  Tax benefits in relation to the offshore bank’s jurisdiction generally mean an absence of host country income tax or other burdensome government regulation.

A corporate structure insulates the personal assets of those who incorporate because a corporation is, for legal purposes, an entity separate and distinct from the persons controlling it.  Likewise, a POB is a separate corporation with a legal personality distinct from its shareholders.  Host countries have a record of preserving on behalf of shareholders the insulatory character of offshore banks they charter.  This is the essence of an international haven.  To this end, a host jurisdiction may reveal the name of a bank held by shareholders, but not the names of those shareholders or the scope of their financial activities.  The personality of the bank is respected by the host country in a way that defends it from tax authority’s interference.

Most host countries impose no taxes on profits, income or capital gains earned by a POB. Host countries do charge the bank its annual license fee, which is fixed and determinable and paid to the government as a business license fee.  A few jurisdictions have a modest reserve requirement as well.  If any income tax is levied, it is generally nominal.
 

OFFSHORE BANKS AND THEIR SPECIAL STATUS IN JAPAN

It has been said that bankers own Japan.  The many tax advantages available to domestic Japanese banks but to no other corporation are but one index of this.  There are however, some advantages for foreign banking corporations.  The following outlines these advantages:

Treatment of Foreign Banking Corporation Activities

There are special tax privileges provided in various sections of the Japanese Tax Code for foreign banks that conduct banking business subject to Japanese jurisdiction. These privileges are available providing the bank can substantiate that it is conducting bona fide banking business outside Japan.

Once the Japanese Zeimusho respects the bank's banking status, the bank may be able to include in its "outside of Japan" gross income revenue derived from a broad range of financial activities classified as merchant banking income.  Such activities include buying and selling stock as an underwriter, acting as investment adviser, merger consultant, or business manager or engaging in a broad range of manufacturing and business activities outside Japan.

With respect to defining international banks as authentic financial institutions for Japanese tax purposes, the key aspect is sometimes not so much that banking business (borrowing, lending, investing) occurs, but that it takes place on behalf of persons not related to the bank in a material way - in other words, on behalf of persons or companies that are not bank shareholders.
 

Exclusion from Controlled Foreign Corporation Tax Penalties

If any number of Japanese, each of whom owns at least 10 percent of a bank, together owns more than 50 percent of a bank, that bank will be subject to current Japanese tax on their share of the bank’s earnings - whether those earnings are distributed or not.

Should the bank wish to escape these tax penalties, it is suggested that the bank's ownership be structured for the Japanese persons to own 50 percent or less of the economic control of the bank.  Under this type of arrangement, there are two options generally available.

The first is to establish a bank with a 50 percent or more foreign partner, thus permitting the bank to avoid being classified as a controlled foreign corporation.  The second option is to establish a bank with 11 or more unrelated persons, each to own less than 10 percent of the bank.  Under this arrangement, the bank will not be classified as a controlled foreign corporation.

In practice, it may be relatively easy to decontrol the bank under these two options.  One example may be to bring in 10 friends or business associates to each own less than 10 percent of the bank.

This arrangement would have the added benefit of infusing additional capital to operate.  Another example might be to offer a stake in ownership of the bank to 10 key customers.

This has the added benefit of providing the customers with added assurance since they own part of the bank with which they are doing business.  With this situation, the customer feels he is part of the bank and thus has more confidence while, at the same time, he is solving the bank's tax problem.

In certain situations, it may be practical to automatically enlist each Certificate of Deposit depositor as a shareholder of the bank.  In such a case the customer deposits a portion of his intended deposit with the bank and uses the remaining portion to purchase stock in the bank.  With this approach, it is important to observe and monitor the percentage each person owns to be sure no one Japanese ever owns more than 10 percent of the bank.
 

LOSS OF PRIVACY

Little is known of the fact that within several years many western governments and Japan will be able to gain immediate access to any individual's or businesses' bank accounts. The U.S. government is currently implementing a new multi-million dollar system that will enable it to tap in and find out all about anyone's banking activities. This system will rapidly spread throughout the entire world. Thousands of innocent citizens have already been jailed for trying to protect their hard-earned money.  It is no wonder that global businessmen, high net worth individuals and corporate institutions are increasingly using legitimate offshore companies and trust structures for privacy and the protection of assets and income.
 

A CAUTIONARY NOTE ON TAX BENEFITS

Despite the expertise and long experience of the persons and organizations contributing to this web page, potential purchasers of private international banks must be aware that the income tax aspects of owning a POB are quite complex.  As such, the tax implications should be discussed with an attorney, accountant or other professional adviser before a final decision regarding POB ownership is made.

This website does not purport to provide specific legal advice in the area of taxation, and this section is not intended as a statement to the effect that foreign banks or their shareholders are, in all cases, free from income taxation.
 

REQUIREMENTS TO OWN A PRIVATE OFFSHORE BANK

Each tax haven jurisdiction has their own particular requirements to allow one to establish their own POB. The financial requirements change from time to time in each jurisdiction. They can be obtained by asking the Law Offices of David Miyoshi. It should be noted however, there are two constant requirements among all of the jurisdictions. These are (1) you will need a local agent in the jurisdiction to represent the bank and (2) you will need prior experience in operating a bank or financial company. The Law Offices of David Miyoshi is able to provide a local agent to represent your bank and also provide the banking experience you need to establish and operate your bank.
 

STANDARD PRIVATE OFFSHORE BANK MANAGEMENT STRATEGY

At the Law Offices of David Miyoshi, we believe that the client should enjoy every possible advantage that each jurisdiction can offer in protecting, growing and enhancing the assets of the client. Therefore, our common strategy is to charter the client’s POB in a selected tax haven jurisdiction (for instance Vanuatu), manage it from a friendly financial center (for instance California), maintain assets in yet another country (for instance Switzerland) and establish bank accounts and securities brokerage accounts in still other countries (for instance Monaco). With this strategy, no single jurisdiction can exercise too much influence or control over the POB. This insures that the client’s funds are utilized with maximum freedom and effectiveness for maximum profitability and tax savings.  Of course, the Law Offices of David Miyoshi is careful to insure that all funds it manages are lawfully acquired with no connection to illegal activities.
 

WHAT IS AN OFFSHORE TRUST (OT)?
 

An OT is a legal relationship between three parties- the Settlor or grantor (the person setting up the Trust), the trustee (the person or entity acting as a fiduciary or person in a position of trust); and the beneficiary (the person or entity who is to receive the benefit of the trust). An OT is set up in one of the various tax haven jurisdictions and is usually an irrevocable trust (one that cannot be revoked) because this form, as compared to the revocable trust, provides the protections generally sought after. Originally, the trust concept developed under the Old English common law. It has been changed over the years by legislation. Today, trusts are normally governed by specific legislative acts in the respective tax haven.

An offshore (or international) trust essentially serves four purposes:

     1. Asset protection
     2. Estate administration
     3. Income generation
     4. Inheritance tax protection

As stated above, an irrevocable trust, once set up by the Grantor, cannot be revoked. That means the grantor cannot demand that the property be returned. This sounds frightening, but it is the very irrevocability that gives the trust its asset protection and tax protection. The idea is that if the grantor cannot demand the property back, no court or person can force the trustee to turn over that property and later have that property taken from the grantor.

Assume that a Japanese investor (Tanaka-san) put Japanese Yen 1,000,000 into a trust for the benefit of his daughter. If the trust were irrevocable, Tanaka-san would never be able to get the Japanese Yen 1,000,000 back. If Tanaka-san then had a creditor, but no money, the creditor could never force the trustee to give Tanaka-san the Japanese Yen 1,000,000 back. It would always be there for the benefit of his daughter.

The other thing is that the trustee has the power to distribute the income (different from the corpus which is the principal) to the beneficiary as her or she likes. Therefore, if Tanaka-san’s daughter had a creditor, the creditor could not come in and get the money from the trust, either.

Asset protection.

The offshore trust protects the assets of the Settlor by placing those assets beyond the reach of his or her creditors. In many cases, these creditors may also be taxing authorities. The intent of the trust is not to defeat the legitimate claims of present creditors, or to evade income taxes. Rather, the aim of the trust is to ensure that the assets are beyond the reach of persons or entities that may wish to claim a part of the Settlor's wealth in the future. The trust is set up under the terms of the trust law in effect in the respective offshore haven. Under normal circumstances, the offshore haven courts are unable to force the trust to pay future creditors, so long as the trust is properly formed and administered.

Estate Administration
The offshore trust acts as an estate administration devise because the trustee is empowered to make divisions of the property and the income according to the directions of the Settlor. The trustee is also authorized to pay such taxes as are needed to repatriate income or property to the country of the investor. Most importantly, the property held in the trust is not subject to administration by local courts in the investor’s home country. The Trustee can act immediately to make divisions and investment decisions without court approval and without the costs associated with court approval.

Inheritance Tax Protection.

The offshore international trust acts to insulate the assets from inheritance taxes. However, certain countries such as the U.S. will impose taxes if the assets of the trust are U.S. real estate. So long as there is a minimal amount of property in the investor's home country, and none of it is real estate, there will be no need to administer the estate in that home country. Even though nations may claim that they have the right to tax all of the property of their citizens upon their death, no matter where located, the reality is that the country cannot tax that which it cannot attach.

In most countries such as the U.S., a gift to an irrevocable trust is taxed. The reason for this rule is that the country does not want to lose an opportunity to impose an inheritance tax and if the trust is not included in the settlor's estate when he or she died, the country could not impose such an inheritance tax. In order to get around this rule, the grantor retains the right to add beneficiaries. Under this arrangement, the home country interprets this as an incomplete gift. Therefore, no gift tax is due.

If the trustor ever wants to add property, including cash or other stocks or bonds, the trustee can usually accept those gifts immediately. The only requirement is that the trustee be given notice, and that the trustee consents to the transfer of the property.

It should be noted however; some property is not appropriate to be transferred to an offshore trust. For example, a gift of real estate in the U.S. would probably not be a good gift to the trust, because the trustee would not be in a position to manage the asset, and would have to pay tax on the sale of the asset if it were sold. Also, it should be noted that if a grantor first sold real property and then transferred the cash to the trust, the grantor would be liable for income tax on any money earned from the sale. For that reason, it is generally advised that the grantor transfer property directly to the trust before selling it.
 

AVAILABLE JURISDICTIONS FOR IBC’s , POB’s AND OT's

The following is a list of the offshore jurisdictions and their respective characteristics. Please consult the Law Offices of David Miyoshi (213) 624-8697) for the requirements to establish an IBC, POB or OT .
 

BAHAMAS

Country profile: The Bahamas comprise an independent nation within the British Commonwealth, and are home to some 200,000 full time residents. A 700 mile-long archipelago in the Caribbean, the islands are perhaps the oldest and most well established offshore center in the region and remain one of the world’s favorite vacation spots.

Type of Government: An independent member of the British Commonwealth with multiparty democracy.

Legal system: Legislation is created from English common law and Bahamian statute law.

Economy: Tourism is the main industry. Finance is a close second.

Facilities: Local communications systems (telephone, fax, mail) are first class.

Taxes, privacy and attitude: This country imposes no taxes on profits, corporate income, or capital gains. It enforces stringent secrecy laws, and maintains a favorable attitude toward offshore banking. The Bahamas enjoy an excellent relationship with U.S. banks. The jurisdiction is second only to London as a base for Eurodollar transactions.

Ranking: If you are only interested in using an offshore bank, the Bahamas should probably rank at the top of your option list. But because the local government is reluctant to issue a bank license to individuals or small corporations (they prefer the applicant to already be an established bank), the islands is a difficult choice for the private investor or small consortium to own their own bank. However, if the client is able to afford the high financial requirements, we may be able to obtain a private bank license for you.
 

MARIANAS ISLANDS

Country profile: The Marianas are located 400 miles north of Guam and 1,800 miles southeast of Hong Kong.  With a resident population of just 15,000, an average year around temperature of 80 degrees, and evening sunsets that remind visitors of Gauguin, these Pacific Basin islands are among the most remarkable vacation spots on earth.

Type of government: It is the only jurisdiction in the world standing as a self-governing colony of the United States, the Marianas offer international investors the benefits of a unique political environment. For instance, assets housed here are beyond the reach of a client’s home country law but remain as secure as those held on account in any U.S. bank.

Legal system: Bicameral Democratic system like the U.S.

Economy: Tourism is the main industry. Finance is second.

Facilities: Excellent in all respects including a modern communications system,

Taxes, privacy and attitude: The Marianas remain one of the newest offshore centers. Investors can be certain all assets deposited here will be protected by the US Federal Deposit Insurance Corporation (FDIC).  Bank confidentiality is assured. Overall, the islands government welcomes foreign capital; gain international recognition by hosting reputable offshore bankers; and enhance the present infrastructure by improving already acceptable professional services and increasing the number of commercial banks operating on the islands.

Ranking: When compared to all other jurisdictions, the Marianas Islands appear to be one of the better choices for your private offshore bank. However, the problem is the Islands have a very large paid in capital requirement of $700,000 and this capital must remain in the islands. This lessens the attractiveness of this location. There is a movement to try to reduce this requirement so we must wait and see what happens.
 

MONTSERRAT

Country profile: Montserrat is a small island just 40 square miles with a total population of 11,5000. It is a British colony with an active volcano. In fact a few years ago the volcano exploded showering the island with white ash and stopped business for quite a long time. It is often called the “Emerald Isle” surely because of the lush green that floods every lookout.

Type of government: A British dependency that has a ministerial system of government and its own constitution. The Governor represents the British monarch.

Legal system: The system is based on English common law.

Economy: Traditionally, the economy has been based on agriculture, light industry and manufacturing. Tourism plays a role also. The offshore financial sector began to emerge in the late 70’s.

Facilities: Communications between the island and the rest of the world are good. There are adequate local facilities, and an impressive infrastructure supports the islands sizable investment community.

Taxes, privacy and attitude: No taxes are levied on offshore banking income, and there are no withholding taxes imposed on interest payments remitted to local banks. In general, the Montserrat government favors offshore banking and the local regulations are fairly good. The islands also maintain tight secrecy laws, enjoy a good reputation among domestic bankers and offers comprehensive tax protection.

Ranking: If you are a risk-taking entrepreneur looking for your first offshore involvement, Montserrat may well be a good jurisdiction for you.
 

NAURU

Country profile: Nauru has the distinction of being the smallest country in the world, with a single national resource: phosphate. The island nation is 8 square miles of visually unappealing terrain. Giant columns of phosphate jut from the center and create an eerie silhouette at sunset. Communications are limited as are the air transportation into the island.

Type of government: Nauru has had a parliamentary system of government with its own constitution since 1968.

Legal system: Basically patterned after English common law. There is specific legislation for corporations, banks, trusts and insurance companies.

Economy: Unlike the other islands, Nauru does not have a tourist industry because it is not a place most tourists would pay to go. Interestingly, the people have one of the highest per capita incomes in the world as a result of their government’s desire to share the wealth with the 4000 plus natives. Each year, every man, woman and child receives nearly $30,000 in royalties from the production and export of phosphates.

Facilities: Fair to poor.

Taxes, privacy and attitude: In a determined effort to diversify out of its monolithic phosphate industry, Nauru has enacted tax haven legislation to transform the country into a Pacific offshore financial paradise. Bank privacy is relatively strong. The single biggest difficulty in doing business with Nauru is finding a professional who knows anything about local laws and customs.  The government’s attitude to outsiders is of paramount importance to have a smooth business relationship.

Ranking: Overall, even though the financial requirements are the least of all countries, Nauru is not one of our favorite jurisdictions to set up a private investment bank.
 

TURKS AND CAICOS

Country profile: These islands have been largely ignored in the rush to open offshore banks in other, more established Caribbean jurisdictions. Yet the Turks and Caicos located at the southern end of the Bahamas chain may offer great promise as a future financial center.  Watch these islands carefully and see how their position changes. The islands lack of international notoriety may eventually prove their greatest appeal. Already, one-on-one relationships (with bankers, accountants, tax lawyers, and government representatives) have become easier to achieve within this locale.  And pristine beaches rolling alongside crystal blue waters make these islands nothing short of gorgeous, tranquil hideaways.

Type of government: The Islands are another stable, self-governing British Crown colony.

Legal system: There is a good legal system based on English common law.

Economy: A major economic strength is tourism. Exports of seafood and a few agricultural products also contribute. The offshore financial sector does a brisk business and has steadily increased since the passage of the New Company Act in 1982.

Facilities: The communications systems are acceptable at best. The banking infrastructure is fair.

Taxes, privacy and attitude: There is no tax imposed on offshore banking income, but there is a U.S. withholding tax on interest payments remitted to a Turks and Caicos bank. Local government is less than enthusiastic about expanded banking activity (although the islands did recently pass a strict financial secrecy law).

Ranking: In the final analysis, the Turks and Caicos would appear to be one of the less desirable selections for today’s offshore banker. But watch for tomorrow.
 

VANUATU

Country Profile: Vanuatu, formerly the New Hebrides is an independent country located 1,400 miles southwest of Sidney, Australia. It consists of a string of 100 islands having a population of 100,000 people. Air connections from the US, Japan and Europe are very good via Sidney, Guam and Hawaii. It is a beautiful vacation spot and the government has publicly supported and encourages offshore financial activity which indicates that it is more politically stable than other countries.

Type of government: Vanuatu became an independent republic with its own constitution on July 20, 1980, and has since remained politically stable. This parliamentary democracy is headed by an elected president. The government is divided into three branches: executive, legislative and judicial.

Legal system: Commercial law is based on English common law. Regulations were influenced by the British prior to independence. Today, both British and French type companies are incorporated, but only the British type has any usefulness offshore.

Economy: Agriculture is the principal economic force. The major products are copra, cocoa, coffee, cattle and timber. Other industries include tourism and financial services.

Facilities: The communications systems are excellent and the region’s infrastructure is exceptional.

Taxes, privacy and attitude: No taxes are imposed on offshore banking income. The government’s attitude toward offshore banks owned by non-bankers is very good. Experts rate the quality of local banking regulations as very high. And strong secrecy laws are regularly monitored and secured. One definite advantage of this location is the paid in capital can be deposited anywhere in the world, such as in a bank in Zurich, London, Monaco, etc.

Ranking:  On a comparative basis, Vanuatu is one of today’s most attractive offshore banking centers.
 

WESTERN SAMOA

Country Profile: Western Samoa is a group of Polynesian islands clustered in the middle of the South Pacific northeast of Australia and further northeast of Fiji. The principal industry is agriculture. Western Samoa became a tax haven in 1987 making it one of the newest tax havens in the world.

Type of government: Western Samoa is a parliamentary government with a constitution that provides for a head of state, a prime minister and a cabinet of ministers. Parliament is represented by two major parties, both of which support offshore financial activities. Total independence was achieved in 1962.

Legal system: English and Commonwealth common and statutory law prevails.

Economy: Agriculture is the principal industry, producing half of the gross domestic product and 90 percent of export earnings.

Facilities:  The country has a well-developed infrastructure and excellent communications.

Taxes, privacy and attitude: Companies or licensees established under any of the international offshore laws do not pay taxes. There are no currency exchange controls, restrictions, or regulations that affect the offshore sector. In fact, offshore banks are exempt from currency and exchange controls.  Strict secrecy laws and penalties are imposed on financial, banking and insurance companies.

Ranking:  If it were not for the very high initial paid in capital requirements, Western Samoa would perhaps be the most attractive center to establish a private investment bank.
 

MONACO

BSI does not use Monaco as a jurisdiction to charter a POB. Instead we use the banks located there as depositories to hold the client’s bank’s investment funds. The banks in Monaco are predominately French, Swiss, English and Italian.

Country Profile: Monaco is the jet setters’ capital of the world. This country is the second smallest in the world and conjures up vivid images of conspicuous consumption at its finest. The 456 acre country is in the heart of the French Riviera, where super yachts decorate the tiny harbor, Ferraris caress the hairpin curves, seaside mansions perch high above the Mediterranean Sea, and rich playboys gamble nightly at the elegant Casino de Monte Carlo. For most people, it’s a land of make-believe; its style and mood well captured by Cary Grant in the movie To Catch a Thief.

Type of government: This world-renowned principality is the second smallest country in the world. It is a stable, independent sovereignty that initially gained recognition in 1489. The government is a hereditary and constitutional monarchy led by Prince Rainier III.

Legal system: Traditionally based on Monegasque law, Monaco employs the French civil code in business practice. Monaco has close ties with France, as a result of many treaties. In fact France is the only country Monaco has a treaty with. Some of France’s regulations apply to Monaco.

Economy: Tourism and banking are the main revenue producing sources for the small principality. Real estate development, postage stamp sales, and the business establishment contribute to the economy. The “tax haven” aspects are limited, but for the right person, the specific advantages and inherent nature of Monaco can be very appealing. During the 1800s, Prince Charles III saved the economy by introducing gambling, but today this revenue accounts for a modest 4 to 5 percent. Value added taxes (VAT) are a principal revenue source.

Facilities: Typical of Europe, Monegasque communications are top-notch.

Taxes, privacy and attitude. Citizens of Monaco do not pay taxes. Foreign and local companies are responsible for 35 percent tax on net profits. Taxes are imposed on commissions, royalties, interest, dividends and capital gains on the disposal of assets but these taxes are relatively low.
 

SWITZERLAND

As in the case of Monaco, BSI does not use Switzerland as a jurisdiction to charter a POB. Instead we use the banks located there, mostly in Zurich as depositories to hold the client’s bank’s investment funds.

Country profile: Nestled high in the Alps, Switzerland is centrally located in Europe with its borders shared by France, Germany, Austria, Liechtenstein, and Italy. The literacy rate is 99.5 percent. The population is almost equally divided between Protestant and Roman Catholic.

Type of government: The Swiss federal government has three branches: executive, legislative, and judicial. The 26 cantons (states) are administrative subdivisions with independent powers. Switzerland is a very stable country and politically neutral. At the present time, Switzerland is attempting to join the European Community, which will abolish its present position of neutrality.

Legal system: The legal system is based on civil law and commercial law.

Economy: Switzerland’s healthy economy is supported by banking, financial services, manufacturing, foreign trade, and tourism.

Facilities: Excellent in all respects.

Taxes, privacy and attitude: Switzerland has taxes, but they are modest compared with those of high tax countries like the United States, United Kingdom and Japan. An operating company within Switzerland can expect to pay 3.63 to 9.8 percent worldwide income tax. The Swiss banks are famous for their bank secrecy.  But recent scandals involving the holding of Nazi treasures during World War II by Swiss banks has reduced their efforts to maintain secrecy.  Now, the Swiss banks are becoming depositories for the very rich rather than the very discreet. Even with this development, Swiss bank secrecy is still regarded as superior to that of most countries. If an activity isn’t considered a crime in Switzerland, the Swiss will not cooperate with foreign authorities seeking to gain access to confidential bank information. Private banking such as that practiced by BSI’s clients is a Swiss banker’s preference, availing the affluent of the best services that Swiss banking offers. There are no currency exchange controls. Like Monaco, Switzerland imposes very low taxes.

Ranking: This is still the best place in the world to bank ones money.
 

JERSEY/GUERNSEY

Jersey and Guernsey are two islands located in the English Channel off the coast of France. Because they are similar in characteristics they are presented together here. As in the case of Monaco and Switzerland, BSI does not use either Jersey or Guernsey as jurisdictions to charter a POB. Instead we use the jurisdictions for establishing IBC's and depositing client's funds.

Country Profile: Jersey is the largest and Guernsey is the second largest of the Channel Islands off the northwest coast of France. The languages of both are English and French with English predominating in business. The climate of both is warmer than the south coast of England. The population of Jersey is 83,000 and that of Guernsey is 55,000.

Type of Government: For Jersey, the constitutional relationship between it and the United Kingdom is unique. The respective legislative assemblies have the exclusive right to legislate on matters of domestic concern to the islands (including taxation) while the United Kingdom home office is responsible for the island's external affairs. As for Guernsey, since 1204 its sovereign has been the English Monarch. However, it has its own separate legislature. The United Kingdom remains responsible for the island's defense and foreign affairs.

Legal System: Both have their own legal systems patterned after English Common law. The majority of the islands legislations are derived from the United Kingdom but there are significant differences, particularly in areas such as inheritance and company law.

Economy: Both island's economies are predominantly based on tourism, farming and financial services with the later growing increasingly important

Currencies: English, French, Jersey and Guernsey currencies are all accepted and exchanged in both jurisdictions.

Facilities: Excellent in all respects.

Taxes: The major tax in Jersey is on income. The law relating to income tax can be found in the Jersey Law of 1961 as amended. There are no wealth, capital gains, gifts or inheritance taxes and the current rate of income tax is 20 percent for resident individuals and corporations. It is the policy of the Guernsey Islands' treasury to maintain a rate of direct taxation at 20 percent. There are no wealth, capital gains or inheritance taxes with the exception of short-term capital gains taxes that apply to property.

Ranking: Excellent in all respects as havens for IBC's.
 

Important Web Site Disclaimers by the Law Offices of David M. Miyoshi

1. We have designed this web site to provide general helpful information about International and Offshore business entities and transactions. Please consult with an attorney about your specific situation before relying on this information. Although we have made every effort to accurately state general regulations of selected offshore jurisdictions, the viewer should consult with an attorney for an up-dated report on the regulations of each specific jurisdiction before relying on any information contained in this web site.

2.  This web site is not intended to be an advertisement or solicitation. Mr. Miyoshi is admitted to the bar of the state of California. His practice is limited to California matters and international and offshore business transactions. He will not undertake the representation of any person who resides in a state where this web site fails to comply with state or local rules for marketing or advertising material.

3.  Any statement, testimonial, or endorsement contained herein does not constitute a guarantee, warranty, or prediction regarding the ultimate result or outcome of your legal matter. If any result of any legal matter is portrayed in this web site, please note that the result portrayed in the web site was dependent on the facts of that case, and that the results will differ if based on different facts.

4.  Please do not send sensitive or confidential information via email. We cannot guarantee the confidentiality of any email message you send to the Law Offices of David M. Miyoshi. Email is often stored and transferred through several computer systems. Therefore, someone at one of these computer systems may be able to read your email and could disclose it to someone else. While the vast majority of messages are never intercepted, the potential still exists. Therefore, please keep your email messages short and basic.

5. Mr. Miyoshi’s receipt of your unsolicited email and his response thereto is not intended to create an attorney client relationship. While the information on this site is about legal issues, it is not legal advice.

6.  Any link from this web site to the web site of a governmental, educational, or other non-profit entity's web page does not state or imply the existence of a relationship between David Miyoshi and that entity.
 

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In all cases the following will be ultimately required to establish an IBC, POB or OT:

1.  Completion of our standard application form
2.   Full details of all beneficial owners, directors and officers together with suitable references on them from acceptable banks and full details of the auditor.
3.   Business Plan outlining the proposed activities of the bank for the first three years of operation, incorporating pro forma income and expenditure accounts and balance sheet.

We can prepare this plan, subject to receiving the particulars.