Thinking of banking in Switzerland? Think twice.

Discussion in 'Politics' started by HazelGod, Feb 19, 2009.

  1. HazelGod

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    Swiss banking giant UBS has entered into a deferred prosecution deal with US federal authorities in which it will pay $780m in penalties and will immediately identify the account holders and assets held offshore by several American clients.

    Looks like the Caymans are really where it's at.
     
  2. dong20

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    And the diving is way better, too.
     
  3. CALAMBO

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    thx for heads up...i need to call my broker/banker....
     
  4. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

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    Liechtenstein is the best bet.
     
  5. midlifebear

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    Actually, Uruguay is a better bet than the mythical Caymans or Liechtenstein. Plus, 99.9% of the world has no idea where it is.
     
  6. Flashy

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    There is nothing wrong with keeping money in Switzerland as long as you declare it to US Authorities and pay your taxes.

    obviously though, that alleviates the benefits of banking secrecy laws.
     
  7. B_spiker067

    B_spiker067 New Member

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    Hypothetically, if I live in the states on $40,000/year. But make $200,000 plus a year programming for foreign clients in Canada, England, Australia and S. Africa who all pay my company incorporated say in.... Costa Rica what business is that of the U.S. Govt/IRS?

    If this is the case for people with bank accounts in Switzerland it's time to redo the U.S. govt. On the other hand if the IRS is after laundered money as it were, good on the Fed.
     
  8. B_Nick8

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    I've had a smallish account in Switzerland for years ever since I lived there. I continue to deposit into it and I don't, um, exactly declare it. At least when I figure out how to scam a gazillion bucks off people I know where I'll park it. Or, maybe, now, not so much.
     
  9. dong20

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    Plus Uruguay has some of the most elegant and decorous banknotes I've ever used!

    Is Montevideo still stuck in a 'time warp'? It felt that way last I visited. I loved the place, especially on the weekends - with its quiet streets, rickety old cinemas, parks (even a golf course!) beaches and wonderful 'light' ... it somehow seems to retain a small town feel, despite its size. Or at least it did, it's been a while.
     
  10. midlifebear

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    The USA is the just about the only country in the world that taxes a US citizen's salary earned in another country even though that US citizen has already paid local income, sales, IVA, etc., taxes.

    However, if you set up a business entity such as a Sociedad Autonoma, Sociedad Limitada, or similar which has all the rights and privileges of a corporation or LLC and that entity does not directly pay you a salary, the IRS has their hands tied. They cannot tax you for being a member of the board of directors of such a business entity. But the benefits of creating such a business entity varies according to the tax and liability laws of the country in which you set it up.

    If you simply start a business or regular company oversees, the IRS will tax you as much as possible. The problem with the corporation-style entities is: how do you benefit without being able to have the coporation pay you a taxable salary? Well, that's where creative banking comes into play and thus the need for an offshore account.

    Most of my friends from the USA who were recruited by non USA universities or corporations to work overseas have had to make the decision regarding paying double taxes by either returning to the USA and finding another position of simply giving up their citizenship. The majority (about 8 friends) have opted for the latter with some original misgivings. However, their children are still US citizens.

    The cure to the problem is that the USA needs to completely revamp its Federal Tax laws. But don't hold your breath.

    Any certified public accountants on LSPG willing to add, correct, or clarify further. I'm interested in hearing your comments.
     
    #10 midlifebear, Feb 20, 2009
    Last edited: Feb 20, 2009
  11. vince

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    Midlife, Canada has a similar approach. However both countries have Tax Treaties with many other nations. Under these schemes a US citizen residing and working in another country is not subject to double taxation. That is they don't have to pay income taxes to both states. You may have to pay some tax to the US, but it is not the full rate. Under Canadian laws, if you are a citizen, but non resident in Canada, you are not liable for Canadian income tax in most cases.

    What really works nicely is to set up your business in a Free-Trade zone. Then you do not pay income or profit or customs or sales taxes in many countries. The laws vary from state to state. You do have to pay benefits such as health insurance and social security for your workers to the local government, but workers salaries are income tax free. If you open a business in many countries, you are given resident status almost automatically.

    Does Argentina have a similar free trade zone concept? I've always wanted to go there. I understand the workforce is well educated and skilled...
     
  12. midlifebear

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    Currently, the Mercosur countries (Argentina, Paraguay, Uruguay and Brazil) do no have any treaties with the USA -- tax or otherwise. And they are loudly not interested in becoming involved with any trade treaties with the USA. However, the easiest way to become an Argentine Citizen is simply fill out an application to legally open and operate a business with a minimum of U$S49,000. Triple that (actually Argentine Pesos are 3.4 to the U$S Dollar at the moment -- prior to 2001 one Peso equaled one Dollar) and you have enough cash to open any number of small businesses that actually generate a good living in Buenos Aires, a city with the densest population in which I've ever lived. Of course, you had better be fluent in Spanish and ready to bribe public employees to push your paperwork through. I have thought about opening a gay pub -- a "resto bar" open for business in the gay-ish neighborhood around the part of Avenida Santa Fe that encompasses the barrios of Recoleta, Barrio Norte, and Palermo. But a nice Russian guy and his boyfriend opened a similar place 4 years ago called Flux, and are barely scrimping by. Part of of their lack of success is due to their location, but porteños simply have no old custom of havinig drinks after work. Instead, they go home, eat, hang with their boyfriends/families, and then go out for coffee at 10:00 PM until the dance/cruise bars open at midnight. But there are many other small businesses that I would have never considered viable that generate an amazing income, such as Maxikioskos -- basically, a candy and cigarette store where you can buy a Coke, make a phone call from a phone booth, have photocopies made, sell an ice cream bar, and prepaid telephone cards. However, Buenos Aires is currently suffering a lack of coins crisis. Inflation has risen just enough that taxis, buses, and the subway require a range of exact fare in coins that it's almost impossible to get change, thus folks hoard it for public transport. That makes buying candy bars and making change for hundreds of customers all day long almost impossible.

    One can apply for and do something similar to get a foot in the door in Canada. However, the cost is much higher and you must present a business plan that ensures you will create 6 new jobs for Canadians and have enough money to keep your business afloat for 3 or 5 years (I forget the actual number of years). It was something that I was actually looking into two years ago. My mining services business would have easily qualified and more than likely flourisehd if I had been willing to set up shop in northern Alberta -- way north, as in around and about the kimberlite mine far north of Edmonton. Sadly, owning a coffee shop in Kelowna (I love that area of BC) would probably fail due to all of the coffee shops that are currently competing for the same business from a finite population.

    But Uruguay has a very small population concentrated mostly in and aroung Montevideo. The most stunning beach property with ultra modern glass and steel homes that seem to float above the ground can be found on the road out of Montevideo to Punte del Este. And 100 million dollar+ private yachts that can sail to any port in the world are very common. So, Uruguay is definitely up to something regarding is liberal banking laws. Those same yachts never make it up the Rio del Plata to Buenos Aires, because the economy is too unstable. Uruguay had some troubles in 2001 when Argentines could no longer afford to show up en masse for January and February vacations, but that's ancient history in Montevideo. All one needs to open a bank account is show your passport and designate what amounts to a post office box as your address. There is an official law that no one can enter the country with more the U$S10,000 in cash in their wallet, but that's a USA law agreed by treaty which Uruguayans are more than happy to overlook. A good portion of Uruguayan society makes its living buying and trading world currencies. Again, you need a solid grasp of Spanish and the ability to decipher the Rioplatense dialect spoken by both Uruguayans and Argentines -- which at times can drive you crazy. They speak funny down here.
     
    #12 midlifebear, Feb 21, 2009
    Last edited: Feb 21, 2009
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