What’s the deal with offshore banks?

A few weeks ago we tried a different approach to find out what the deal is with offshore banks; offshore cash holds 10% of the global GDP! We pretended that we were interested in opening up a private offshore account. We were trying to fish out information regarding global transparency policies, asset protection, reduction of liabilities and the risks.

We contacted various banks and private trusts in the Bahamas, Cayman Islands and the Cook Islands. The questions we asked were focusing on whether we have to report our account to the local tax authorities and if there is a legal way to get around it. Also we wanted to know the level of anonymity that each of them were offering. Of course over a recorded call from their side its difficult to get some provocative answers, but we got some interesting dialogues nevertheless.

When we contacted a law firm in the Bahamas the adviser told us that whether or not you  have to report your account to the tax authorities depends on the law in your jurisdiction (in our case Greece). So the question that anybody would have on their mind after this statement is: so if my country doesn’t oblige me to report it, can I avoid paying taxes? The gentleman on the other line freaked out and said that since we mentioned tax evasion he will have to end this conversation. As if hanging up the phone on peoples’ faces would terminate tax evasion.

Here’s a dialogue we had with a bank in the Cayman Islands:

CFRO agent: “Hello, I would like to open up a personal offshore account. I am wondering what degree of anonymity  I will have.”
Fidelity Group Cayman Islands: “Just to let you know, if you currently don’t have any connection or relation to Cayman, your application will be denied. If you are not planning to reside at Cayman in the next six months to a year, we don’t consider that an account is necessarily needed.”

CFRO agent: “But I thought anyone can set up an account at Cayman. Because the situation here in Greece is very bad and many people have offshore accounts and we know they live here, in this country.”

Fidelity Group Cayman Islands: “You have to understand that banking has changed compared to what it was 15-20 years ago, it’s a lot more strict and stern, and it’s pretty much decided that if you don’t plan to live on the island then you don’t necessarily need an account. I can assure you that your application will be denied until you decide to either purchase property or you decide to relocate and live on the island.”

CFRO agent: “We can probably get our way around all that, I suppose the Cayman islands are a great place for holidays, so that’s not a problem for me! What’s the next step? How can you assure me that my money will be safe, and whats the global transparency policy of your bank?”

Fidelity Group Cayman Islands: “I am not sure about all that ma’am. If you want to just have an account, you probably need to go through the route I instructed first, but other than that I can no longer give any more information if you don’t have anything currently.”

CFRO agent: “So all the policies have gotten stricter in order to avoid all the illegal activities that have been associated with offshore banking, right? Who’s coming up with those policies, is it your own government?”

Fidelity Group Cayman Islands: “I am not certain on that, I can’t comment on it.”

CFRO agent: “But who knows, who can inform me? I don’t want to be in trouble just for setting up an offshore account.”

Fidelity Group Cayman Islands: “That’s cool, but like I said, you might want to get in touch with a representative of a law firm on the island, who will guide you on how to go about it and give you advice. I am not one of those persons and unfortunately can’t give you advice.”

Conclusion: Buy property and your offshore account is ready to go!

By Konstantina

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