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Offshore: Who Goes There?
By Philip S. LaMar, Jr., JD
“Making a lot of money is all right, provided you don’t have to pay too much for it.”
In my experience working in tax havens, I continue to be surprised by the diversity of people I meet seeking offshore services. It is not easy to speak of a typical client profile. Clients hail from every part of the world and are of every conceivable political persuasion, vocational background and economic circumstance.
People who go offshore can generally be described as being dissatisfied with tax rates, threats to their assets, invasion of their privacy and unavailability of diverse investment opportunity. They seek assistance outside of their respective jurisdictions when there are not adequate domestic solutions.
If we must locate a common thread among them, it is a shared feeling that they pay too much to make money—both literally and figuratively.
The most obvious and direct cost born by this group is taxes. The majority of people in most countries understand conceptually that taxes are a part of civic responsibility. Most are willing contribute to the public coffers to the extent that they see their contributions making a positive impact.
However, no one is happy to see tax dollars used to support a growing central government which is remiss to accomplish much beyond perpetuating an ineffectual bureaucracy. This displeasure rises to resentment when citizens perceive that government overspending has become a crisis for which they are held personally accountable.
Overtaxation creates a sense that that labor is punished rather than rewarded and deprives energetic, imaginative workers of incentive to continue their industry.
Lawsuits are a dreaded fact of life, but even so restitution for harm is basic to our collective sense of justice. In overly litigious societies however, citizens suspect that something is awry when damage awards have evolved into a source of revenue rather than a measure “to make plaintiffs whole.”
The billions of dollars that lawsuits cost society annually may be calculated not only in terms of the damages, but also by the built-in costs that are passed to consumers by corporations which must maintain sizeable legal departments. The economic cost is arguably rivaled by the price of living in the shadow of this looming possibility, or likelihood as the case is in certain professions.
Increasing government presence in the private lives of citizens is another factor that makes having an offshore dimension preferable to a strictly domestic existence. Filings and disclosures to the government, originally intended to establish order, have degenerated into Orwellian systems of citizen monitoring.
There is no such thing as financial privacy. Moreover, in some jurisdictions, the government’s protective stance regarding investment activity now impinges the economic liberty of individual investors. Working people feel that they are paying a dear price to make money when they remunerate with their privacy and are barred from investment opportunities of their own choosing.
Solutions are available in offshore jurisdictions, which in many cases adopt legislation specifically to assuage these very difficulties. With the aid of competent domestic professionals and offshore providers, people have discovered ways to reduce their tax burdens, protect their assets, globally diversify their investments and secure economic privacy.
Who are these savvy individuals? They represent a cross-section of the world´s socioeconomic classes, professions and politics, bound together only by the common feeling that they have already paid too much to make money, and will only pay more if they try to keep it.
More on Offshore at THE BARRINGTON GROUP, INC. site.