Mond Carlo's Blog

To set up an offshore company or relocate your existing business overseas is a crucial step toward internationalizing yourself and your assets. Search for “offshore company” and you’ll find thousands of websites promising a quick company formation in Panama or the British Virgin Islands, with a range of other “benefits” for the jurisdiction in question.

There is a current misconception that offshore business is about evading taxes and hiding money from the government, which is certainly not the case.

There are 100% legitimate ways to structure your business interests overseas and realize significant benefits from an asset protection standpoint — as well as tax-standpoint.

Want an example? In the last few years companies such as Google, Apple and a multitude of other companies have cut their taxes by billions of dollars in completely legitimate ways.

You too can do this.

Some say this is unethical and cheating, but not surprisingly, those who say these are most often not the same people as those who create value in society. If you’ve found your way to this page, chances are strong that you’re a value creator and want to keep more of the money you get back as a result of creating value.

Tax Advantages with Offshore Business

First of all, you don’t have to start a company offshore to save on taxes. If you’re an American, just moving out of the US is a terrific first step.

As a US expat, about $100,000 in overseas income is tax exempt, meaning that if you live outside the US you don’t have to pay any taxes at all on the first $100,000 or so of foreign sourced income (you still have to file your tax report though).

However, the real tax advantage from running an offshore company as a US citizen doesn’t come from direct tax savings.

It comes from tax deferment, meaning you postpone the payment of taxes into the future. If you run a business overseas and reinvest profits within the company you can defer taxes indefinitely.

Let’s say you have a profitable company overseas. Now imagine that instead of paying taxes on your profits every year you can reinvest that capital in your offshore company every year for 30 years, and only pay taxes if you decide to sell the company after 30 years.

Being able to reinvest your capital tax-free combined with the power of compound interest makes this a truly exceptional opportunity.

Offshore Internet Business: Incorporating a Truly Global Business

It’s a great idea to structure your business overseas, especially one that’s online-based. If you incorporate your foreign business properly, it provides a legal way to defer tax payments (similarly to an IRA), as well as enabling much reduced liability.

An online business has no limits as to how and where it can do business, so why should you let your business be limited by a jurisdiction that is based on the old, geographically limited model? Starting an offshore online business is a great way to build streams of income outside of your home country.

Why would you want to have income streams outside of your country? Well, when inflation runs rampant in a country, having an income stream overseas in a stronger currency can potentially be a lifesaver.

If hyperinflation would find its way to your country, which is a real risk with central banks all around the world printing new money 24/7, earning only a small part of your income in a different country is invaluable.

An internet business based overseas, coupled with an offshore bank account, is the perfect medium through which you can do this.

Offshore Company Formation: Ins and Outs

There are dozens of jurisdictions, such as Hong Kong, Singapore and the British Virgin Islands that offer a great business environment with fully legal tax benefits.

The most important thing that you MUST do is ask for advice from a qualified tax attorney (someone who understands international tax law) in your home country. Additionally, learn enough to understand the benefits of particular offshore jurisdictions.

After you’ve done your due diligence, it’s possible to go through the whole incorporation process online in most jurisdictions, and you can often set up your offshore company in as little as a few days. You often start the process with registering a company name and sending in the right documentation. The next step, after incorporation, is often to open a bank account or merchant account for your business.

Offshore Business Readings

Here are a few selected articles from Sovereign Man about starting and running an offshore company. You will find tons of information by searching the internet, but it’s hard to know if a company is giving correct information or if the purpose of their information is to get their hands into your pockets.

Everything You Need To Know About Wiring Money Overseas

I’m getting a lot of feedback from people trying to send international wire transfers.

A reader wrote this week to say:

“I went to my bank branch to initiate a wire transfer on Monday. The teller had to call over the branch manager to help with the paperwork. Once the manager saw I was transferring money to Panama, she told me they wouldn’t be able to do the wire transfer. When I asked why not, she said because investing in Panama is too risky.”

A similar tale from another reader:

“I tried to wire money to Panama for a property purchase, and the teller told me they couldn’t do the wire because they didn’t have a branch in Germany. The Panama bank uses a German bank as their intermediary, but isn’t that what they (an intermediary bank) are there for—to accept international transfers?”

I share the frustration these and the other readers I’ve been hearing from are feeling. Recently, two Los Islotes investors tried to wire money for their lot purchases. The first client’s funds never made it because they were rejected by the Panama bank’s intermediary bank and returned to the client almost two weeks after the wire had been initiated.

The second client’s funds arrived the next day, after having passed through the same intermediary bank.

The difference? Who knows?

Every Bank Is Different and So Are Their Processes

Every bank has its own way of handling wires, but wiring money from one money-center bank to another money-center bank should be straightforward regardless of the banks involved as minimal information is required. However, sending money from a non-money-center bank, as the first reader I quote above was trying to do, to another non-money-center bank in a foreign country is a different story.

This is why banks work with intermediary or correspondent banks, to facilitate international transfers of funds. Unfortunately, this means another layer of information, including the recipient bank’s account number with the intermediary bank. If any of the information is missing or not included in the instructions in the expected format, the wire can be rejected, as it was for my Los Islotes buyer.

Most folks don’t send international wires on a regular basis, and, even if you do, it’s hard to keep up with all the particulars.

The easiest strategy these days is to initiate a wire online. The trouble is that online systems don’t work when trying to send a wire using a bank that requires several layers of intermediate and final beneficiary details. In a situation like that, you have to go into a bank branch to initiate the transaction in person.

When you do, don’t stand in line and wait your turn to speak with a teller. The typical bank teller in the typical neighborhood bank has never sent an international wire and probably wouldn’t be able to find the transfer’s destination on a map. You want to speak instead with a personal banker or a manager.

Engage the conversation confident in the fact that your bank can, indeed, wire your funds where you want them to go. Don’t let the banker you speak with try to tell you otherwise. Also, don’t let the banker try to talk you out of the transaction altogether. It’s your money, not his. What you do with it is none of his business (unless he’s also your money manager). You don’t have to justify your plans to him or anyone else (well, maybe to your spouse).

Wire Transfer Terminology and Fundamentals

Here are some fundamentals and some terminology for reference.

U.S. banks use what is called an ABA number, which identifies banks within the U.S. banking system. If you’re transferring money from one U.S. bank to another, all you should need is the recipient bank’s ABA number and the beneficiary’s name and account number (maybe their address, too).

International banks are identified by what’s referred to as a SWIFT code. A SWIFT code is all letters, no numbers, and it should be all you need for most international wire transfers. Sometimes the sending bank will require the intermediary bank’s details, as well, including that bank’s SWIFT code.

In Europe, the system is much simpler in my view and is based on the IBAN number. This is an aggregated number that includes the bank identification and the recipient’s account identification along with some other numbers to guide the transfer through to the recipient. With an IBAN number, nothing else is required for the money to arrive where it’s supposed to arrive, though most banks still request account names for confirmation.

Sending a wire from one currency to another creates further complications. Again, from a reader last week:

“The bank says they can’t send a wire to Singapore for me because they don’t have any Singapore dollars.”

Another case where the teller had no idea what he was talking about. The teller was correct when he told your fellow reader that his bank didn’t have any Singapore dollars to send, but that’s irrelevant. That’s what currency exchanges are for. In the case of a small local or regional bank, it may be necessary for your banker to contact his correspondent bank first, before initiating the wire, to get the exact U.S. dollar amount required to send the specific foreign currency amount, but don’t let your banker tell you he can’t send the wire at all. That’s just not so.

When sending a wire online, you typically can elect to transfer the funds in your currency or in the currency of the recipient. Again, online is always easier when it’s an option.

Back to the reader who wrote in to say that his banker insisted he couldn’t wire money to Singapore. Finally, thanks to the guy’s persistence, the banker came around and sent the wire. However, he wired the U.S. dollar amount rather than the Singapore dollar amount. Now the poor guy is due a refund in the amount of the extra Singapore dollars.

And now his banker is now telling him the bank can’t accept a wire from Singapore.

So it goes.

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My parents are bright, intelligent people, curious to explore how modern stuff works. They quickly adopted all kind of new technologies into their lifestyle. They have more than 20 years of experience working on PCs, they own top of the line smartphones and smart TVs. They started using Facebook, Twitter and Instagram than most of my (same-age) friends. They aren’t scared of ordering stuff online, or using services like Uber and AirBnB.

However, when it comes to privacy and security they have huge gaps.

They are aware that the digital world has its risks, but they can be easily deceived. It’s difficult for them to realize how close they are to losing money or sensitive data.

They can’t tell the difference between important and optional security steps. They also can’t distinguish between essential information and one that only has a commercial purpose.

And I completely get it: with the avalanche of existent information, I often feel overwhelmed myself.

My guess would be that your parents fall under the same vulnerable category. It’s important that we help them understand the basics of online security and create healthy digital habits.

Our parents have poor basic security habits

1.They think they have nothing worth the cybercrooks’ interest.

No? Really? What about any work documents? No contracts attached to past emails? Any information they wouldn’t want to be public? No credit cards pins saved in text drafts on desktop? No online shopping on websites that stored credit card details?

How you can help:

Open their eyes. Compile together a list of all their online information assets. Take every account they have: emails (both work and personal), social network profiles, financial accounts, etc.

List everything they have on those accounts, from work documents, photos, personal messages or sensitive information, such as credit cards PINs, passwords or social security number.

Ask them to imagine how much it would cost if they lost that information, was deleted, stolen or leaked online. According to this, have them note how valuable each information is.

You can also have them follow our free, action-ready security plan.

2.They have bad passwords habits.

They set passwords that are easy to guess – it’s usually their kids’ names, birth dates or pets’ names. Most likely, this kind of information can be found on social networks, such as Facebook profiles, where they are willingly sharing it. This makes cyber criminals’ jobs easier: they only need to glance over the social accounts profiles to find out possible passwords combinations or answers to security questions.

They use the same password everywhere. They don’t take their time to create different passwords for each and every account; they only recycle the same password. And they don’t even think about changing it every few months.

They write their passwords and PIN codes on a paper that they keep in their office desk or in a mail draft. Or worse, in their wallet, next to their credit / debit cards.

READ... They use some of the worst passwords.

Taking out a loan can be risky business as it fraught with many stringent conditions that cannot be left to perfunctory or shallow reading off promotional materials. A lending company can provide service that helps a prospective borrower understand the conditions of the loan and avoid being scammed. However, the best way to assure a stress-free and risk-free path to acquiring a loan is through the assistance of an experienced loan consultant, such as Crosby Corporation.

Here are some benefits derived from hiring a loan consultant:

1. Avoid high interest rate loans

Companies like Crosby Corp. protect clients from acquiring or purchasing loans that have onerous rates but disguised as friendly, affordable loans. It will require looking into all the hidden costs and other fees to determine the final cost of a loan. A professional loan risk assessment is needed to help prospective borrowers to avoid getting into a disastrous financial commitment.

1. Minimize risks of possible non-compliance

The possibility of non-compliance to certain loan provisions can cause a company’s project to falter or even flop, leading to loss of revenue and so much disruption to its overall operations. Such requirements as additional collaterals to cover additional loans due to increases in material or labor costs and other contingency expenses can put a great burden on a project’s capability to keep afloat. Loan counselors can aid borrowers in clearing the way toward minimizing such risks and avoid mortgage fraud.

1. Evaluate risk due to loan rescission

The possibility of a loan being rescinded due to default on payments or diminished collateral value to cover the loan can be a real risk for any borrower. Hence, before entering into an agreement, a borrower needs to assess the chances of a loan rescission with the help of a professional loan counselor. Threshing out the details of a client’s financial capability to take out a loan and determining all the actual and possible costs that will be incurred all goes into assuring the borrower that the risk is eliminated.   

1. Determine consumer disclosure accuracy

Moreover, a prospective borrower needs the reassurance that a lender is transparent as far as loan requirements are concerned. Any hidden costs, clauses and added provisions can stall a client’s project at mid-stream. Broad experience and expertise pertaining to lender normal procedures as well as their “abnormal” practices can spell the difference between a good loan and a bad loan.

1. Evaluate agency compliance guidelines

Compliance to agency stipulations in relation to loans can deter many interested borrowers or even cause them to increase the risk of failing to close a loan agreement. Crosby Corp. has the capability to assist its clients avoid that risk through proper fulfillment of those requirements in a professional and prompt manner.  

Minimizing or reducing these risks involved in acquiring a loan can provide better chances for a client to improve his business.