Section 6

How to Use a Tax Haven
for Offshore Investing

A bank account in Bahamas would be a likely choice since they afford state-of-the-art banking services to investors not available through other banks. These bankers are well equipped to service offshore investors. Brokerage accounts can be established in New York or London.

A director of the corporation will be responsible for establishing the financial and investment accounts necessary. If you act as director, it is easy to handle all matters, otherwise it will be necessary to either instruct the nominee directors what to do as they will have to sign all documents, or have the nominee directors authorize you as attorney-in-fact to transact business on behalf of the corporation via a broadly written power-of-attorney. Using a power-of-attorney you can handle corporate details directly yourself. A drawback to this is losing some confidentiality gained by operating through the nominees. The decision of which way is best for you must be weighed.

The financial and investment accounts should all be in the name of the corporation and the official contact address, telephone, fax, etc., should be within the tax haven where the corporation is chartered. By doing so, all of your investments through the offshore corporation are now the investment of a non-U.S. citizen. Immediately, a host of investment opportunities open up to you that would not have been available previously. Additionally, considerable financial privacy is achieved, as well as asset protection and the ability to structure your financial affairs to reduce personal U.S. tax liability. As for the corporation, it will operate tax free.

As a beneficial owner of an offshore corporation, you will want to stay in close contact with the offshore professional engaged to provide nominee directors and other services. The professionals actually become an extension of yourself and breathe life into an otherwise lifeless entity. The corporation itself is the most important aspect of being offshore and creating an offshore presence legally, but without the sundry services of nominee directors, office services, etc., the corporation and the benefits it can bestow to its owners would be severely limited.

In the future, no communications will go directly from you to the new corporation's bank or investment accounts, but all must go via the tax haven. Most readers will immediately appreciate and sense the advantages of doing business in this manner once the fear of operating at arms length is overcome. After getting your feet wet by doing some transactions in this fashion you will quickly gain confidence as you discover how competent your offshore professionals and international banks are in servicing your requests. You may even decide that your previous American counterparts are antiquated.