Many offshore jurisdictions herald a high degree of confidentiality as one of their key features. Typically when we accumulate wealth, we start seeing increased levels of attention from governments, corporations and private individuals. Multiple governments may wish to tax you for capital gains, income, wealth or inheritance. Also, in the event of litigation or divorce, having your finances remain confidential may be of great value.
While we may choose to shield our assets via mechanisms such as corporations or offshore trusts, no vehicle can ever be as secure as secrecy itself. An old maxim which still holds true is that, when the time comes for you to need confidentiality, it’ll be too late to get it.
Numerous countries have changed or adapted privacy laws, paying particular regard to financial transactions in the fight against terrorism. This has in turn led some to question whether these laws have gone too far in eroding ones right to privacy.
Offshore jurisdictions often have enshrined privacy laws. These may have been introduced to encourage dubious investment in the past but nowadays this is completely unfounded. Any illegal or fraudulent activity is likely to be reported and investigated.
However, expats acting within the law will not have any ulterior motives, and legal tax liability reduction goes hand in hand with a common expectation of all of your financial transactions; your business is your own.
Be aware that all countries and jurisdictions have different laws and regulations and they may also be more or less applicable to your very specific situation. It’s therefore critical that you consult with a specialist financial adviser for further information.