Maximizing Privacy in Offshore Transactions: Strategies and Recommendations

Emails and other forms of communication are often vulnerable to breaches of privacy, particularly with regards to offshore transactions. In response to a question regarding how to maximize privacy in offshore transactions, it is important to note that privacy from tax authorities no longer exists. Governments around the world have implemented measures to ensure that banks report accounts and transactions to their respective tax authorities. It is, therefore, impossible to hide money from the taxman. However, privacy can still be achieved with regards to protecting assets from future civil creditors.

To achieve privacy in offshore transactions, it is necessary to set up a structure in such a way that the owner cannot be determined. This involves forming an offshore corporation, LLC or trust in a country that doesn’t maintain a public registry or searchable database that reflects the officers, directors, or settlor. If a structure is used in a country with a public registry, offshore companies can be added to hide the officers, directors, and settlors from public view.

Privacy in offshore transactions is often found in smaller jurisdictions such as Belize, Nevis, Cook Islands, and others. These countries do not have a public registry and are, therefore, more efficient for those seeking privacy. However, sometimes it is necessary to have a bank or merchant account in a country that has a public registry. For example, Panama has become a major financial center over the last decade, but all officers and directors are public record.

A safe solution to maximize privacy in an offshore transaction involving a Panama structure is to form an LLC in a country that doesn’t have a public registry, such as Belize, and use that company as the officer for the Panama corporation. This way, when someone searches the Panama database, all they see is the name of the Belize LLC, which is a dead end. When opening a bank account, the bank will receive the Panama corporate documents and Belize LLC forms to prove that the rightful owner of the structure is the person opening the account. The account holder will be the only one authorized to sign on the bank account, which protects their cash from nominees.

In conclusion, while privacy from tax authorities can no longer be guaranteed, privacy can still be achieved with regards to protecting assets from future civil creditors. It is important to set up offshore structures in a way that the owner cannot be determined and to consider smaller jurisdictions that do not maintain public registries. When using structures in countries with public registries, offshore companies can be added to hide officers, directors, and settlors from public view.