Alan's Finance Blog

New Haven on the Horizon; the Cook Islands

By Bob Bauman

A broad net of 15 coral islands in the central heart of the South Pacific, the Cook Islands are spread over 850,000 square miles, southwest of Tahiti and due south of Hawaii. The islands occupy an area the size of India, but have a population (a little over 21,000 people) no larger than a small town in America.

Local time is 10 hours behind GMT, with 9:00 a.m. in Hong Kong is 3:00 p.m. the previous day in the Cook Islands. When it is noon EST in the United States it is 5:00 p.m. in the Cook Islands.

This geographic location gives the Cook Islands, with its excellent modern communications, a strategic advantage in dealing with both the Asian and American markets.

Not as well known as some offshore financial centers, in 1981 the Cook Islands government first began adopting (and updating) a series of wealth and asset-friendly laws. Since then these islands have attained a definite role in offshore financial circles, especially when it comes to asset protection trusts.

Named after Captain James Cook, the famous British explorer who visited them in 1773, the islands became a British protectorate in 1888. By 1900, administrative control was transferred to New Zealand; in 1965, residents chose self-government and a free association with New Zealand. A member of the British Commonwealth, the islands have a constitution with a Westminster style parliament elected every four years by universal suffrage. The legal system is based on British common law and English is widely spoken.

There is much here to for serious persons of any nationality who want strong asset protection supported by sympathetic government and judicial policies.

Existing statutes provide for IBCs, offshore banks, insurance companies, and trusts. All offshore business conducted in the Cook Islands must be channeled through officially registered and regulated trust companies. A comprehensive range of professional trustee and corporate services is available.

In a major American legal case, the U.S. government tried to force the repatriation of funds held by a Cook Island trust and lost, even though the Americans who created the trust for a time were jailed for contempt of court. Not even a federal court could crack the Cook Island trust laws. For more about what is known as the “Anderson case” see FTC vs. Affordable Media LLC, 179 F. 3rd 1228, U.S. Ct. of Appeals, 9th Cir. (1999).

I have a good friend who has had a Cook Islands trust for many years as as protection against possible business liabilities. He is fully satisfied with its operation and protection, with his local American attorney acting as liaison with his Cook Islands trust company.

Source: Sovereign Society

Common myths about offshore banking

Legislating from 31,000 Feet…

Common Myths and Misconceptions About
What Global Banking and Investment can Do for YOU

By Patrick Bove

“This must be what it feels like to be a Congressman.”

So said my seatmate on the flight from Dallas Fort Worth to Los Cabos, Mexico, home of the 2009 Offshore Advantage Academy.

“From 31,000 feet, everything looks so simple… Entire states blend into each other. Towering mountains are flecks on the horizon. And Americans’ most pressing concerns are inaudible. (Except for the guy three rows up who wants extra peanuts.)”

He had a point. From this vantage point, you can see everything – and nothing.

And here’s the scary part…

If your perspective was “fixed” at this giddy height – you might start to act like a Congressman too.

From this perch, there’s no problem that can’t be solved. No “micro” that should go unmanaged.

It Makes Sense When You Think About It…

No wonder Washington’s bureaucrats, Senators and Congressmen are so intent to tell us where to invest, how to live… and (who knows what’s next) when to breathe?

They’re thinking and acting at 31,000 feet… while causing massive uncertainty on the ground.

And as a result… we are threatened by one grand delusion after another. Which has led us to massive national debt, a devalued currency… and the “genius” idea that more spending will actually save us money.

Meanwhile, medical costs are exploding, Social Security is about to dip into the red and unfunded pensions are forcing millions of Americans to re-think retirement.

I know it’s not just me. Odds are you’ve cracked open the newspaper this week and said to yourself, “They did WHAT?”

And you’re not alone…

According to our research, 11.1 million Americans have asked that question one-too many times. They’re fed up and they’ve decided to leave the country.

Some are picking up everything and going offshore. Others are simply investing in a safe-house-slash-vacation-home or moving their assets to safety…

There are a couple myths about the offshore world that get circulated each year, and they’re way off base!  So let’s go ahead and dismiss them with a 1-2 punch:

Myth #1: You should make your first million… or three… before thinking about going “offshore.”

Wrong! Most people believe the “offshore world” is reserved for millionaires and billionaires – but nothing could be further from the truth! There are benefits to going offshore that can benefit practically anyone – from the average investor to the tycoon.

Case in point, a man I know of – I’ll call him Carl – has relocated his family offshore, for the simple fact that his elderly mother requires live-in assistance. Today, she enjoys this high level of personal care and it only costs Carl $160 a month. (A similar setup in the U.S. would set him back nearly $5,500!)

Myth #2: You need to quit your job, hire six lawyers, thirteen accountants and a magic eight-ball to set-up an offshore investment or bank account.

Wrong! That’s what the keepers of the “status quo” would have you believe! In reality, it’s a breeze to check the financial stability of an offshore bank… transfer money overseas… and invest in a bevy of legal opportunities that can smash the S&P 500. You just need to know the right questions to ask… who to trust and which offshore entity is right for you. And that’s exactly what you’ll learn in lessons one through three.

Until next time, I wish you all the best!

Patrick Bove

Swiss private bank puts US on the Blacklist

This Wednesday morning, I received a phone call from Rob Vrijhof, (right) our long time investment and banking associate in Zurich and a member of the Sovereign Society Council of Experts.

Rob called my attention to the announcement today by the venerable Wegelin & Co., Switzerland’s oldest private bank, that it will stop doing business in the United States and with Americans.

Founded in 1741, the St. Gallen-based bank, said their decision was a response to stricter measures introduced in the U.S. against tax evasion and projected changes in U.S. estate tax laws, which could make some non-U.S. citizens liable for U.S. taxes if they inherit U.S. securities.

The bank did not mention new U.S. government demands that offshore banks giving investment advice to U.S. persons must register and qualify under SEC rules…which is itself a blatantly illegal attempt to extend American law well beyond its normal jurisdictional area (which ends at the U.S. border, regardless of what the feds may have you believe).

So drastic have the IRS/SEC extraterritorial measures become that even members of the U.S. Congress have protested they go too far.

“Untenable Position”

In their letter to investors, Wegelin bank said Swiss banks were being forced into “an untenable position,” and in all fairness, they make a good point…

Given the lack of clear definitions in the IRS proposed rules, Wegelin believes the imposition of being expected – by the IRS – a to know which clients were liable to pay U.S. taxes is “an impossible undertaking.”

“The danger of inadvertently making false declarations to the U.S. tax authorities will be too great,” the letter went on to explain.

The bank gave the United States an added zinger, saying it believes the U.S. government overestimates its attraction as a financial center, thus Wegelin is advising its clients to pull out of all U.S. securities investments.

So the inevitable question, then…Are more banks going to follow in Wegelin’s footsteps?

Yours truly,

Bob Bauman, JD
Legal Counsel for The Sovereign Society

Article Source:  Sovereign Society