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