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Offshore Tax Shelters Still Operating

Despite the ongoing KPMG criminal tax evasion case, offshore tax havens still seem to be going strong. The KPMG accounting firm has already pled guilty in the case and paid $456 million in fines. Some say that the case was not solid, especially after a ruling which knocked out part of the government’s case against BLIPS (Bond Linked Issue Premium Structure), which continues against ex-executives of KPMG.

Economists see over $1 trillion in assets moved to offshore centers such as the Cayman Islands, the British Virgin Islands and the Isle of Man, and between $40 billion to $70 billion of taxes is believed to be evaded each year. The tools of the trade include concealing the ownership of offshore companies, and creating artificial losses. Other schemes include large amounts spent on repaying loans at high interest rates that are never really spent for this purpose. However, despite the hysteria of recent Senate hearings, the KPMG case, and before it the Enron case and the breakup of the Arthur Andersen accounting firm, this is not always illegal. Advice on setting up tax havens is legal and on the internet. Almost legal….well, do a Google of it on the Internet and see what turns up.

At one website, you are offered a number of tax havens to choose from and assistance from a team of lawyers, accountants and bankers. Have you considered the British Virgin Islands (BVI)? A corporation can be set up there in three business days. BVI documents do not require, for incorporation papers, the listing of the directors or shareholders. Nominee services are allowed if you need to have the confidentiality of the beneficiaries, that is keep it secret who is involved, who is making money. Such corporations are exempt from any taxes for twenty years. Records of these companies can be kept in any part of the world as well as the shareholder meetings of these companies.

Prices to start an offshore corporation in the BVI are quite reasonable, and the shares in the company, which is the shareholder’s money, start at $50,000 for one share. To establish the company, various government fees total $1275, with additional fees for the first director totaling $1450. One can also establish a bank account in the BVI with the minimum starting balance of only $2500. You then have the tools to develop your offshore tax shelter, with further help from lawyers, bankers and accountants. Bon Voyage, and don’t forget the suntan lotion!