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I have a considerable amount of experience with offshore behaviour, and
without wanting to sell you hot air (metaphorically speaking for I do not
wish to sell you anything physically), I think that operating offshore can,
in many ways be compared to trading. In order to learn to trade, most need
to go through the learning curve (time, money, experience, knowledge,
psychology, etc.). Dealing with offshore strategies is no less difficult.
Any strategy you adopt must be studied in and out, and from all possible
angles so as to anticipate possible flaws and dangers. When you do finally
adopt a strategy it should be one that has previously been "tested"
(preferably in court) by the IRS or the equivalent in another country. Only
that way can you judge how far the risk is of taking in water.
Al the best, good luck and, above all, good trading.
Gram.
>If you look at item #4 you will see the complexity of what is
>involved in operating an offshore company.
>
>John
>
>
>================================================================
> >> "Offshore & Privacy Secrets, April 14, 2000" <<
> Published by OPC International
> http://offshoreprofit.com
>================================================================
>
> CONTENTS
>
> [1] Welcome!
> [2] Feedback
> [3] Microsoft vs the State
> [4] Offshore Strategies
> [5] NewsBriefs
> [6] OPC Diary
> [7] Quote of the Week
>
>================================================================
> [1] Welcome!
>================================================================
>
>Welcome to another issue!
>
>This week we have feedback on the "market" vs "political" democ-
>cracy article and second citizenships; an article exploring the
>difference between political and economic power; answers to
>readers' questions on offshore strategies - and the usual roundup
>of global news of interest.
>
>Always feel free to circulate this entire newsletter amongst
>your friends and colleagues.
>
>Enjoy the read - and, as always...
>
>Live free!
>
>Robert Smith
>OPC International
>http://offshoreprofit.com
>
>================================================================
> [2] Feedback
>================================================================
>
>Commenting on the article about political vs market democracy,
>we received this from a reader:
>
>"Interesting thought. But just exactly WHO or WHAT AGENCY will
>mint/coin/financially back that DOLLAR? Who has the authority
>to dictate the value of that dollar? How are dollars to be
>obtained? At what rate of exchange? How would that dollar be
>treated on the open WORLD market?
>
>Seems to me a Utopian dream. Without a governing body overseeing
>the fiscal aspects of its society, then WHOM does that respons-
>ibility fall? Who determines? It all falls back onto the POLITICAL
>SYSTEM being involved....no matter what! Without a representative
>authority to oversee things, there can be NO standardization of
>values. Interstate commerce would be impossible, let alone world
>trade. Anarchy does NOT solve the very problem you fighting...it
>exacerbates it!"
>
>COMMENT
>The above thinking is a common fallacy - the belief that some
>"authority" must run the money system - and that only a govern-
>ment can do it.
>
>The subject is too big to cover here, as there are a number of
>ways things could be run a lot better. I'll just look at a couple
>of possibilities.
>
>Paper (fiat) money originated as receipts for real money, ie
>gold or silver. You could always exchange your paper receipt for
>the real thing. And at that time, such paper receipts were issued
>by private companies (not governments).
>
>One simple improvement would be gold-backed money again. Such
>a system would NOT require any government involvement whatever.
>Gold stands in the market as a commodity of measurable value, and
>would be able to be exchanged and used as money (even using digital
>equivalents as "receipts").
>
>However, I don't believe gold is the optimum money - but personally
>generated "credit", based on your own productive capacity.
>
>How would this work? Think of it as an IOU. If you purchased
>something - and paid with an IOU, then you would have literally
>created money based on your own capacity to fulfill the promise.
>In this case, a promise to deliver equal value, on demand, in the
>future.
>
>The more productive you are, the more money you can "create".
>In other words, a money system that is based on the productive
>capacity of its participants. And all this could be ideally
>accounted for digitally - with the assistance of private "banking"
>corporations.
>
>On the same subject we got this:
>
>"In response to the article on true democracy I would like to
>point you to the multicracy site:
>
>http://www.geocities.com/Athens/Marble/3339
>
>It's basically quite similar to 'vote with your money', but with
>a slightly different twist."
>
>And another comment on the same article:
>
>"On the matter of majority being RIGHT, I simply cannot believe
>the 'stupidity' of some readers, and would abandon commenting.
>There are, however, in our history, many examples where ONLY one
>person was right, while the rest of the world was wrong! And
>this is not uncommon! It usually resides within the scientific
>community, where 'thinkers' are objective enough to go 'counter'
>flow of received ideas (or brainwashing) and think for themselves.
>What would the world be today if Galileo did not stand for his
>idea that the Earth was round, and NOT the center of the Universe?
>It would take pages of samples of this One against the Whole
>(what's that for a minority!) to show you that the world actually
>progresses only when the very idea of majority rule (or mob rule
>as you put it) is put back into question! [snipped]
>
>And one more for good measure:
>
>"Although I read, with much interest, and agree with most every-
>thing you say and print I have found myself a bit concerned about
>a few. One of these things is something someone, I think, men-
>tioned in the latest edition of the newsletter concerning voting
>with our dollars.
>
>If it is OK for two consenting adults to exchange items which are
>now considered illegal, such as drugs. How does that help in the
>matter of the robbing, stealing and mugging that goes on to
>support these habits. Not to mention the young women who get
>hooked on the junk and end up selling their bodies. I know making
>it illegal is not the answer, we can already see that does not
>work. But how can allowing it to be done freely and out in the
>open serve to help?
>
>I personally think it is time to quit with the 'drug warriors',
>as one reader called them, and turn it back over to the people.
>I for one, and let me say I am a Christian and a Pastor, think
>there must be a way to put a stop to all of this. I know myself
>Christ is the answer but most of the world is not going to listen
>to that so what do we do to protect the innocent?"
>
>COMMENT
>Firstly, I should say that the criminal activities of "robbing,
>stealing and mugging" - are directly associated with the fact
>that drugs ARE presently illegal - thus forcing the natural drug
>market underground. Being illegal makes it extremely profitable,
>as the price is much higher than it would be in an open, legal
>market.
>
>As for how to protect the innocent. Freedom carries risks - and
>one of these risks is that people will not always act in their
>best interest. However, it is not the business of anyone else
>to try and stop such people. Freedom includes the possibility
>that individuals will choose to injure themselves. But that
>is preferable to trying to create a "controlled" society where
>everyone is protected from themselves. As for "minors", well they
>are the responsibility of their parents/guardians. And if such
>people are not up to the task - then any help must be voluntary.
>
>Commenting on feedback saying that the state is losing the battle
>with the Internet, we received this comment:
>
>"I don't know if the 'net HAS won the battle against governments'
>as one of your readers comments. Just as banking and finance has
>been made so much more efficient with computers and the internet,
>so will many government functions be made more 'efficient'. Is
>there not a danger that the armies of state employees now freed
>from the mundane work of government can now concentrate on policing
>and spying on the citizens. The number of state employees doesn't
>seem to be dropping to any significant degree."
>
>COMMENT
>Yes, it would be premature to draw such a conclusion. However,
>I also believe that the state may have the money, but not necess-
>arily the brains! As the capitalist system continues to outstrip
>the state sector - the very best minds will be drawn to the
>private sector (where the money is), and therefore, I'm of the
>opinion that the freedom possible because of technology will
>remain some steps ahead of the repression possible using the
>same tools. And as for the number of state employees dropping,
>maybe this will happen when state's tax revenues start to dry up
>as a result of the creative financial strategies of an increasing
>number of people!!
>
>On the matter of dual citizenship, we received this:
>
>"I am originally from New Zealand and have lived in Australia for
>years and am naturalized as an Australian citizen. I hold an
>Australian passport and am eligible for a New Zealand one as
>well. However the Australian customs require that I enter and
>leave Australia on the Australian passport. I can however use the
>New Zealand passport for travel into the first country on arrival
>and beyond. A word of caution however. It gets real complicated
>if you get mixed up and try to leave on a different passport than
>the one you came into a country on. In some circumstances it is
>possible to hold two passports from the same country at the same
>time. This is done for regular business travellers so that
>companies can be getting a visa put into a passport while the
>owner is away on business on the other passport. Again you have
>to watch which passport you travel on. Dual citizenship is also
>available to those with British parents or grandparents and as
>such they are entitled to hold a British passport."
>
>COMMENT
>British passports are only available if your FATHER is British
>born. It used to be easier - but not anymore. However, if you
>have an Irish mother or father - or grandparents, then you can
>apply for an Irish passport.
>
>And, finally, a comment on Echelon:
>
>"Concerning Echelon - It isn't well known that the vast majority
>of international/intercontinental telecommunications takes place
>via undersea fiber optic cables, not satellites. The monitoring
>of these cables could be much more invasive and pervasive than
>anything to do with satellites. The NSA is actively seeking ways
>to monitor these pipelines of communications. The capacity of
>TAT-14, TPC-5, AC-1 and several others is each greater than that
>of all satellites functioning today. If you don't believe me, ask
>AT&T, MCI, Sprint & Tyco."
>
>Thanks for all your feedback - keep it coming!
>
>================================================================
> [3] Microsoft vs the State
>================================================================
>
>Last week the press were "braying" over the decision against
>Microsoft - "the big bad company getting its come-uppance from
>the state".
>
>Now, I have no particular truck with Microsoft - but I do have
>something to say about this misguided anti-trust legislation.
>And if I were Bill Gates - I'd be headed offshore and taking all
>my jobs and profits with me!
>
>First, let's get one fact out into the open. No monopoly can
>exist without government sanction. Unless consumers are FORCED
>to buy Microsoft - because no competition is allowed, then there
>is NO monopoly to moan about!
>
>Just because Microsoft "dominates" the software world, in no way
>constitutes a monopoly. People have bought Microsoft products
>freely (including those who use an alternative operating system
>like MacOS) and this global consumer demand is what has made
>Microsoft the hugely successful company it is.
>
>No, what we have here, is the state deciding to take on a "comp-
>etitor" - a company with financial resources that outstrip those
>of many states!
>
>But there is a more fundamental error behind believing Microsoft
>to be "guilty" of anti-competitive practices - and that is to
>confuse "political" power with "economic" power.
>
>Political power comes out of the barrel of a gun. It is the power
>to force you to do something against your will. Whereas, economic
>power is the power that money gives you - the power to buy, sell
>and make a myriad of choices. But this is NOT the power to force
>you to do something against your will.
>
>I don't care how economically successful or powerful Microsoft
>is, it still can't FORCE me to buy its products. In the free
>market, one is always free to purchase something else.
>
>Now, it's also true, that for a while, one company's product may
>enjoy such popularity and success that no one else is prepared
>to compete with them. But that does not mean they are legally
>prevented from doing so.
>
>Sure, some people moan about Microsoft (usually users of Linux!),
>but they are completely misinformed when they wish to use state
>power to undermine the profitability of a competitor.
>
>The confusion between political and economic power is very dang-
>erous, as it allows people to lump state power and market power
>into the same basket. But they are entirely different - and the
>difference needs to be understood.
>
>It's also enormous hypocrisy for any state to criticize someone
>else for being a "monopoly", when the state itself is the worst
>monopoly of all! A monopoly back by guns.
>
>Personally, I believe the state attack on Microsoft is indicative
>of something much deeper - that the state perceives market power
>as a threat to its own brand of state power, and like any monop-
>olist, the state will not stand for any competition!
>
>My only disappointment in all this is the wimpishness of Bill
>Gates. If only he'd acted like Howard Roark in Ayn Rand's "The
>Fountainhead", and told the state to stuff off - and moved his
>business acumen, profits, and opportunities out of reach of the
>states' tentacles. Now, that would have been something to cheer
>about!
>
>Here was a wonderful opportunity for a businessman to stand up
>for his right to create economic values in a free market - to
>declare his moral right to do so. Instead we are treated to the
>spectacle of appeasement and compromise - a sure "loser" of a
>strategy, if ever there was one!
>
>Even more interesting - just when the state is getting into "gear"
>over Microsoft's so-called anti-competitive practices, the market
>is producing many alternatives to Microsoft's dominance. In other
>words, the market is behaving exactly as one would expect. The
>huge advantage that Microsoft has had is being challenged by
>innovative competitors entering the free market.
>
>My advice to the state - and all state-worshipers, is to butt
>out!
>
>================================================================
> [4] Offshore Strategies
>================================================================
>
>A reader had this question:
>
>"Is it true that by the end of this year the US government is
>going to require all offshore brokerage companies that trade in
>US securities to report earnings on their US clients? If so,
>can this be prevented by having one of your Directors or Officers
>in your IBC open the trading account for you?"
>
>I'd be very surprised if this were true - because, as yet, the
>USA cannot force an offshore domiciled business to report on the
>affairs of its clients - even IF they are US residents. Now, I
>know the US government would love to have this power - but it
>hasn't happened yet to my knowledge! Of course, it can compel
>a US-based brokerage house to report earnings - but that is a
>different matter. Either way, operating through a properly struct-
>ured IBC, would provide the required degree of protection.
>
>Another reader had two questions:
>
>"I was recently asked by a few wealthy individuals from Japan
>that need advice on how to bring their accumulated monies sitting
>in the U.S. back into Japan safely. Point of contention is best
>method so as not to be hit by the extremely high tax rates imposed
>on Japanese citizens by the Japanese Government. I am not sure,
>but I was told that the tax rate is around 90%.
>
>Another question asked by another individual is, how to arrange
>his contemplated new business in the U.S., whereby he can receive
>income here? Or should he establish an offshore account somewhere
>outside of the U.S.? My understanding is that foreigners are not
>supposed to receive income in the U.S. unless they have a visa."
>
>First of all, any monies remitted from the US into Japan, will
>need to be accounted for - although I can't verify whether the
>top marginal tax rate in Japan is as high as 90%. If I were such
>a person, I would seriously consider keeping my money OUT of
>Japan. If they need funds for a specific purpose, maybe they
>could obtain such funding via an offshore entity - without having
>to repatriate the funds personally. Either way, it is a complex
>question, and one that would require a lot more information to
>give a useful answer.
>
>On the second point - about foreigners receiving income in the
>US, unless they have a visa. As stated, this has to be wrong.
>Certainly, foreigners can receive income while in the US. What
>they can't do is "work" without a work visa/permit/green card.
>However, income can be derived from many sources apart from work,
>like investment returns, remittances etc.
>
>Finally, a reader asks this:
>
>"I am still very confused about what is, and what is not, a
>controlled foreign corporation or CFC (US tax law) - can you
>explain please?"
>
>The rules defining a CFC can be found in the tax code sections
>951-964 - but like all state-mandated codes, they are not written
>with clarity in mind!
>
>The issue is that a CFC must be reported - its activities, income
>etc, whereas, a non-CFC may not be required to file anything at
>all to the IRS.
>
>If you formed an IBC, where it was owned equally by 11 or more
>unrelated people - meaning that no one person owned 10% or more
>of the stock - and its income was at least 30% derived from busi-
>ness activities, rather than investments - and as long as more
>than 50% of its assets were business related (not investments),
>then you would not have to make any report of its activities.
>
>Keep in mind that the ownership of the "no more than 10%" of
>stock - refers to both direct and "indirect" (ie bearer shares).
>
>As you can see, it is a complicated process to ensure that your
>IBC is NOT a CFC - but it's worth getting it right, so that you
>have no legal obligation to be filing returns.
>
>================================================================
> [5] NewsBriefs
>================================================================
>
>Mendel unlocks "The Prisoner" for Universal - By Charles Lyons
>and Dave McNary
>
>HOLLYWOOD (Variety) - In his first major assignment at Universal
>since moving his production shingle from Disney last September,
>Barry Mendel ("The Sixth Sense") has committed to produce "The
>Prisoner" with Oscar-winning scribe Chris McQuarrie ("The Usual
>Suspects") set to pen the screenplay.
>
>Director Simon West ("The General's Daughter") is still attached
>to take the helm of the picture, based on the 1960s cult British
>TV series ''The Prisoner'' created by Patrick McGoohan.
>
>McGoohan, who starred in the original series, will serve as the
>project's executive producer along with West.
>
>Allegorical, controversial and even surreal, the television
>series was about a man who found himself trapped in a village
>where everyone has a number but no name. It addressed such themes
>as the individual and society, the philosophical nature of freedom,
>the concentration and abuse of power, and the destructive worship
>of progress.
>
>Though McGoohan wrote a script in 1996, Mendel, McQuarrie and
>West have elected to return to the source material rather than
>the earlier screenplay. [snipped]
>
>http://dailynews.yahoo.com/h/nm/20000405/en/film-prisoner_1.html
>
>----------------------------------------------------------------
>
>If you're Australian - and want to get rid of the new GST, you
>may be interested in this:
>
>http://www.ozscan.net.au/mandate/index.htm
>
>----------------------------------------------------------------
>
>Some interesting commentary on the Microsoft case:
>
>http://www.mises.org/
>
>----------------------------------------------------------------
>
>Plundering the New Economy - by Peter Topolewski
>
>Who says governments aren't forward looking? US state and federal
>politicians recently mustered all their brain power to gaze into
>the future. Like the Wicked Witch of the West spotting sweet but
>oh so powerful Dorothy in the crystal ball, the politicians
>recoiled in horror. They watched today's innocent looking "e-
>tailers" grow into tomorrow's monsters.
>
>Surely they will eat away all the precious retail sales tax
>revenue, they cried. But what to do?
>
>Tax 'em they shrieked, tax 'em!
>
>Read the rest at:
>
>http://www.zolatimes.com/V4.14/internet_government.html
>
>----------------------------------------------------------------
>
>SEC Proposal Would Search Web and Invade Privacy
>
>EPIC ALERT - http://www.epic.org
>
>Controversy has recently arisen around a Securities and Exchange
>Commission (SEC) plan to use webcrawlers to search the Internet
>for potential securities fraud. Many have found the plan to be
>an overreaction that invades privacy and could chill free speech.
>
>The SEC's plan would utilize webcrawlers to browse and record
>statements made in chat rooms, bulletin boards, and web pages
>based on undisclosed keywords. In the process of storing publicly
>posted statements, the webcrawler would also attempt to collect
>personal information to identify posters who often attempt to
>maintain their anonymity. While the SEC currently takes these
>steps manually in attempts to thwart potential securities fraud,
>the automation of the process would potentially extend the reach
>of the federal agency into activities that could violate the
>Privacy Act of 1974. [snipped]
>
>----------------------------------------------------------------
>
>Getting Snooped On? Too Bad - by Declan McCullagh
>
>TORONTO -- You say you don't like browser cookies? You're not
>quite sure if that program you download from the Net is revealing
>more about you than it should?
>
>Well, here's something to make you really nervous: In the United
>States, it may be illegal to disable software that snoops on you.
>[snipped]
>
>http://www.wired.com/news/politics/0,1283,35498,00.html
>
>----------------------------------------------------------------
>
>Would a Global Crisis Make E-Gold Glitter?
>
>That's the idea behind this awkward online currency. But fans use
>it for digital transactions -- even in these stable times.
>[snipped]
>
>To read this "outside" view, see:
>http://www.businessweek.com/cgi-bin/ebiz/ebiz_frame.pl?
>url=/ebiz/0004/ep0403.htm
>
>COMMENT
>Interesting use of the word "stable". I would have thought that
>the times we live in are incredibly unstable!
>
>----------------------------------------------------------------
>
>Luxembourg In The Firing Line Over Banking Secrecy - by Ulrika
>Lomas
>
>On the agenda of today's ECOFIN meeting in Brussels will, as
>usual, be the thorny withholding tax dossier. Following the UK's
>budget last week, Dawn Primarolo, Britain's Paymaster-General,
>will be hewing to the 'exchange of information' line.
>
>The EU tax harmonisation package, which has been held up by the
>UK's determined resistance to the proposed 20% withholding tax
>on bank interest payments, always contained exchange of inform-
>ation provisions as an alternative to the withholding tax, but
>until recently there seemed little chance of gathering unanimous
>agreement on information exchange. [snipped]
>
>http://www.tax-news.com/html/stories/st_withholding_03_04_00.html
>
>================================================================
> [6] OPC Diary
>================================================================
>
>* e-gold Update
>
>You made it happen! It looks like e-gold got tired of receiving
>hundreds of emails from around the world saying...
>
>"Please unfreeze OPC's e-gold account and transfer the gold to
>Antiwar.com's account #130325"
>
>By the end of last week, our account was unfrozen. The explan-
>ation we received was typical e-gold style:
>
>They claimed that one of our clients had paid us with e-gold
>which he had obtained fraudulently, and they wouldn't "have the
>time" to sort out whether we (OPC) are an accomplice or merely
>the preferred payee of the scamster. Thus they had decided to
>unfreeze our account.
>
>And this after more than six weeks of utmost silence! How kind...
>
>Unfortunately they didn't say *which* client it was or how
>exactly he had obtained the e-gold... or even how much it was.
>Thus we were unable to establish the client's identity and cancel
>or revoke his order... let alone verify the truth of this claim!
>
>Like I said last week: Instead of moving offshore and identifying
>their clients, e-gold simply treats ALL their clients as potential
>criminals - while continuing to offer what is effectively an
>anonymous bank account service from WITHIN the US. If there was
>ever a recipe for guaranteed disaster, then this must be it!
>
>Until further notice, e-gold remains on our scam warning list.
>If you do continue using e-gold, be careful who you receive
>payments from, and who you send payments to! It might affect
>the status of your account for a VERY long time - thanks to
>Big Brother, e-gold style.
>
>In any case, thanks for your assistance. As promised, we have
>donated our account balance to a good cause - to Antiwar.com!
>
>================================================================
> [7] Quote of the Week
>================================================================
>
>"The man who produces while others dispose of his product is a
>slave."
>
>Ayn Rand
>
>================================================================
> See you next week! Please spread the message and forward this
> newsletter in its entirety to related mailing lists, friends,
> associates, and Webmasters. !! THANK YOU !!
>================================================================
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> Sign up now for FREE: http://freedomflash.com
>================================================================
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>================================================================
> "Protect your life and assets by going
> offshore - the libertarian way."
>================================================================
> http://offshoreprofit.com
> Copyright 2000, OPC International, Inc.
>================================================================
>
>_________________________________________________________
>Enlighten your in-box. http://www.topica.com/t/15
>
>
|