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OFFSHORE BANKING
André Vargas Zanabria
Francois Maldonado Muths
What is Offshore banking?
- Conventional Banking
- Functions of transferring money into and out of accounts
History
-Offshore remedy of lower taxation and promises of anonymity and confidentiality
- “Notary popularity”
- Began strengthening regulations regarding banking practices and client confidentiality in the hopes of attracting foreing depositors
-Modern offshore banking industry
…How to form an offshore company?1. Choose the place
- favorable tax policy- banking secrecy- information exchange
agreements
2. Choose a IBC or a LLC
3. “ Incorporator ”
- Memorándum of association- Articles of asociation
4. Certifícate of incorporation
- Designate the directives- Make desicions (managing
director, secretary, treasurer, articles of association )
- Minutes of the first meeting of the directors .
Is offshore banking legal?The answer is Yes.
- Ingeniería fiscal
- Exxon or Boeing
- Not very popular
- Big lose
CHARACTERISTICS
Advantages
- Access to politically and economically stable jurisdictions
-A lower cost base and can provide higher interest rates than the legal rate in the home country
- Geographically remote island nations can competitively engage.
- Interest is generally paid by offshore banks without tax being deducted
Disadvantages-Less financially secure
-Offshore banking has been associated in the past with the underground economy and organized crime, through money laundering
- Offshore jurisdictions are often remote
RegulationsThe regulations can be different according to the country, wherein the degree of restrictions varies.
After the attacks of September 11, have been a number of initiatives to increase the transparency of offshore banking.
- The tightening of anti-money laundering-
- In the US the Internal Revenue Service (IRS) introduced Qualifying Intermediary requirements
- USA PATRIOT Act
- The European Union has introduced sharing of information between certain jurisdictions, like a lot of countries all over the world.
LANDMARKCASEThe allegations of corruption leveled against the government of Toledo…
Conclusions
- Many interpretations
- Country or organization applies its own endpoints.
- OCDE
- Higher gain and security to a shareholder
- Capital whitening