15 T-7 TAX HAVENS: THE GREEN LIST OF THE WORLD’S BEST OFFSHORE HAVENS

The collective countries known as the G-7—the industrialized

nations of Canada, France, Germany, Italy, Japan, the United

Kingdom, and the United States—are also some of the highest

tax nations in the world. These seven giants are not the only tax-happy

zealots. Australia and other nations, and organizations such as the European

Union (EU), the Organisation for Economic Co-operation

and Development (OECD), the Financial Action Tax Force (FATF),

and the United Nations (UN), are all working to thwart or even crush

the offshore opportunities of tax-haven nations. The UN also wants to

be the new Global Internal Revenue Service, and if that’s not enough,

they also want to infringe on your Bill of Rights and the Second

Amendment of your Constitution and take your gun away.

Well, if that’s how they feel, it seems only appropriate to have

some counterbalance by providing a convenient reference for readers

and others about the most advantageous havens to bank, invest from,

and put your money for profit, privacy, and protection. If only we

could take away the taxman’s guns.

The OECD has its blacklist, so here is my “Green List” of the

world’s best offshore tax havens, which I call the T-7. This exclusive list

of seven excellent countries includes tax havens, money havens, asset

havens, and offshore banking centers. I have evaluated them using factors

that I explain later in this book including the all-important issues

of confidentiality and safety, and I will revise the list annually.

In order of preference, here are my favorite money havens:

1. Switzerland

2. Liechtenstein

3. Austria

4. Panama

5. Saint Kitts and Nevis

6. Belize

7. Hong Kong

The top four are my favorite offshore banking centers, and the

bottom four are my favorite tax havens and venues from which to conduct

offshore business. Panama overlaps and is excellent in both

areas. All seven can be considered money and asset havens. None of

the T-7 countries have signed a Tax Information Exchange Agreement

(TIEA) with the United States. This is favorable (see Part Three:

Today’s Tax Havens).

Here, then are some of the highlights and characteristics of each

of the T-7 countries.

SWITZERLAND

This Alpine haven is one of the most politically and economically stable

countries in the world.

Unlike the United States, which went off the gold standard in

1971, the Swiss government has mandated that the Swiss National

Bank, under the Swiss Constitution, must back the Swiss franc, the

country’s solid currency, with accumulated reserves including gold.

The value of the gold alone far exceeds the currency in circulation.

This, coupled with a low growth in the money supply, contributes to

economic stability, minimizing threats of inf lation and def lation.

This is a currency to hold, like gold and other precious metals, as a

hedge against inflation and economic uncertainty.

The dollar has lost 300 percent value against the Swiss franc over

the past 35 years. And, it stands to lose more. The Swiss franc has

been the strongest currency in the world for decades, even rivaling

the Japanese yen and the former German mark.

The Swiss system of government places emphasis on selfgovernment

and democracy, as it should, and it begins at the local

level. Citizens meet and have a hand in important local government

decisions. And they control their government, not the other way

around, through a national referendum and initiatives. The central

government has traditionally been weak, as it has not been empowered

to be otherwise. The Swiss system could be considered a model

for democracy, rather than what is being touted on the world today

as democracy. The trend toward globalization is threatening to compromise

even Switzerland, which may one day find its local Swiss

democracy and economy undermined by the economic developments

of the “new world order”—basically the attempted evolution

into a centralized global economy, in direct contradiction to what

democracy is all about.

As an aside: This trend directly contradicts the tenets of democracy.

The question is, what form of government will preside over the

new world order, as the political apparatus will need to catch up with

the new global economy. Will it be a central global government?

Frightening indeed.

Swiss banking is unparalleled. The country remains politically

neutral and defends its 1934 Bank Secrecy Act with strict penalties.

There is also the Swiss insurance secrecy law, which covers policyholders.

They have staunchly opposed the outside forces coming

from the G -7, the OECD, and the EU. In recent years and under

tighter legislation, bankers are now required by law to report “suspicious”

transactions. This may make sense on the face of it, but

involves a subjective decision with the potential to erode Swiss secrecy

on a case-by-case basis. But, although the opposition continues

to push hard to change Swiss ways, the Swiss can be stubborn

when it comes to changing their traditions. Financial safety for

their customers is the cornerstone of their success. That is why,

today, over one third of the world’s assets are managed from

Switzerland. Swiss bankers are the highly trusted money managers

to the world.

LIECHTENSTEIN

This principality is in good company, lying between two other T-7

offshore havens (Switzerland and Austria) and is politically and economically

stable. Liechtenstein is the world’s oldest tax haven; it

passed asset protection legislation as early as the 1920s. Liechtenstein

has strict bank secrecy and only in the case of criminal prosecution

will it be penetrated. The Swiss franc is the national

currency.

Although the country boasts only 16 banks, it is an important international

financial center. No companies domiciled in Liechtenstein

are subject to income tax on foreign-source income. This little nation is a popular venue for holding and domiciliary companies and

is home to some unique corporate and trust structures. One is the

Anstalt, commonly known as the “Establishment,” which has the option

to be a stock company and the Stiftungs, a private foundation.

These structures and others are described in greater detail later in

this section of the book. Blacklisted by the OECD for refusal to cooperate,

Liechtenstein adamantly refuses to succumb to outside pressures.

As 37-year-old Crown Prince Alois said with a smile, “Bank

secrecy is very firmly anchored in the population.”

AUSTRIA

This is another attractive European haven with a long tradition

of bank secrecy. In recent years at the behest of EU pressures,

sadly, Austria eliminated two unique accounts, the anonymous

Sparbuch, a bearer type passbook account, and the anonymous

Wertpapierbuch, a bearer type passbook account coupled with a securities

and commodities trading account. Regardless, Austria still

prevails as an important money haven with strict bank secrecy. Austria

is also an excellent expatriate haven. You can enjoy Austria’s

many charms and stay close to your money and your gold Philharmonics

(see Part Four: “Prof iles of Retirement Havens and Foreign

Residency”).

PANAMA

A stable democracy with Latin-style politics and a free economy,

Panama is the Latin version of Switzerland or Hong Kong. This narrow

country connecting Central and South America is one of the oldest

tax havens in the world, dating back to the 1920s. Today, it is a

modern international financial center with as strict bank secrecy legislation

as can be found anywhere. There is a tight fraternity among

Panamanian bankers. Panama is a superior tax haven, with no corporate

or personal tax on income from foreign sources, and it is growing

in popularity with expatriates who find the country friendly and

the cost of living reasonable. Panama is home to the Panama Canal

and is a favorable flag-of-convenience country for yachtsmen and

shipping companies. The Panama corporation has armadillo-like

qualities and is useful in international business where strong insulation

is desired.

NEVIS

This is a pure no-tax haven in the spirit of what a tax haven was originally

meant to be. A little two-island nation, known formally as Saint

Christopher-Nevis (Saint Kitts and Nevis), it is completely independent,

having no ties with Britain or any other imperial nation and

makes its laws according to its whims. Nevis is a proactive tax haven

with modern corporate and trust legislation. Nevis strongly supports

its offshore industry and staunchly protects the offshore trade. The

strict bank secrecy in Nevis is close to impenetrable. There are no detracting

treaties or agreements with the United States or any international

organization. There are good legal, financial, and business

support services, including services for offshore e-commerce business.

Nevis, Belize, and the Cook Islands are three of the best jurisdictions

for establishing an asset protection trust. Bearer shares are

permitted to be issued by Nevis International Business Companies

(IBCs) and beneficial owners can enjoy complete anonymity. This

haven is an excellent choice for the quick redomiciliation of a foreign

company. For a swift second citizenship, Nevis and Dominica both

have first-rate Economic Citizenship Programs. Although offshore

banking services are limited in Nevis, the Ministry of Finance has

been working to establish good relations with Swiss bankers for the

benefit of Nevis companies.

BELIZE

Like Nevis, Belize is an attractive no-tax haven with progressive corporate

legislation. Once a British colony, Belize gained its independence

in 1981. This tropical Central American country has been

aggressively promoting itself as an international financial center, and

the future looks promising. There is strict bank secrecy and there are

no treaties or agreements with the United States or other international

organizations. The OECD had blacklisted Belize for a while in

2000 until the country made a few concessions, but nothing dramatic.

However, your IBC will not be able to issue bearer shares and Belize

no longer has an Economic Citizenship Program. Still, the Supreme

Court defends their laws and protects depositors against outside attacks.

This business-friendly haven offers a wide variety of offshore financial

services, and some forthcoming offshore legislation will allow

Belize to expand into a completely independent offshore financial

center providing many more services. Belize is an excellent offshore

e-commerce base, and has one of the strongest asset protection trust

laws anywhere.

HONG KONG

This world-class banking center and tax haven provides strict bank secrecy

and is an excellent location for conducting international business

in the Far East and elsewhere. Even with Beijing’s potential

influence, China has done a pretty fair job at keeping its hands out of

this successful capitalist enclave, as was agreed in their 99-year lease

with Britain. It was also agreed that Hong Kong would continue to operate

under the status quo for 50 years beyond the expiration of the

lease, which ended in 1997, without interference from China. If this

situation should change, two Asian alternatives to Hong Kong would

be Singapore and Malaysia. Hong Kong is a major shipping port. It is

also the Western gateway to China.

More information on the T-7 tax havens can be found in Part

Three: “Today’s Tax Havens,” under the individual country profiles,

complete with offshore business contacts.