Why do so many people move to offshore?

What are these people doing? Well, there are many reasons why so many individuals, companies and investors more to offshore. And what are they? The reasons why people move to offshore territory are: new opportunities, business growth, reduced tax regimes and legal protection for the future. Therefore, more and more of our clients choose to move to offshore territories and whenever there is a freedom of action, we should have such choice. But, can we choose? For the moment there are many options available, and dozens of open doors to give investors an opportunity to preserve and protect assets, to ease the tax burden, and to plan the future.  

Of course, you must make very careful plans to avoid the pitfalls and dangers that you may find. It is better to know which lines should not be crossed to stay out of trouble with the government. The tactic is that the government redefines such parameters to be able to control the taxpayers and hold income to support its plan. As James Bond said, “the old dream of word domination”.

Such intention is in direct competition with most honest people who work hard to increase their wealth and provide greater financial and physical security for themselves and their children.  These objectives are valid, and in the current state of the world, you can be well advised to explore the many options to move to an offshore territory lawfully, while there is still time. Today, there is a special interest in closing doors as we speak. 

As an insecure and jealous miser, the government of the United States has speculated about losing tax money of the countless numbers of citizens suspected of evading taxes. With 250000 million U.S citizens who choose to voluntarily leave the United States every year, mainly as a consequence of the taxes, it is clear that a large number of disenchanted Americans are willing to try something new-a new life. Without doubt, these numbers do not include the large segment of people who make use of the offshore strategies and tax planning without leaving their home. 

Australia, another high tax jurisdiction, also has a large number of suspected tax evaders who have moved to offshore territory, and therefore the Australian government is taking measures to fight it. It is also investigating Paul Hogan, creator of Cocodrile Dudee, who has been implicated as a result of the Wickenby operation, a criminal tax investigation in that country. The British government is doing the same dance and with a vengeance. In Italy, tax evasion is considered a way of life, and jokingly known as the national pastime. The tendency of citizens to actively protest against government taxes occurs in countries where the taxes combined both local and federal exceed 50% of the person`s gross income. In the late 70s and 80s, the UK captured a 70% of the citizens´ taxes. It unleashed a class tax rebellion and saw as the taxpayers began to leave the country. Their outflows were less discreet than expected and some of the richest British citizens and most talented were clear about their disappointment of being abused by tax collectors. This reminds one of the Beatles` songs.

Jean Baptiste Colbert was very eloquent when he said, the art of taxation consists in plucking the goose in a way to obtain the largest possible amount of feathers with the smallest possible amount of hissing”.  

Well, the English obtained too many feathers, and the exodus gained momentum, so in early 1990, the government decided to put the brakes on its high taxation. There was a collective sigh of relief in many sectors, and the expatriates in Spain and the Canary Islands began to return to their Motherland.

Between the economic classes of a country, the wealthiest (2%), include high-level business people, industrialists, capitalists, investors, writers, singers, scientists and so on. They constitute a large part of the economic base in which wealth is created, which the tax authorities can remove. In England, these bright flowers between citizenship were the same people who had packed and ordered a license. When the government decided to turn back, its patriots had to assess the benefits of continuing expatriates against the temptation to return to their country of origin, including the welcome gift of a new tax structure that was seen as a tax incentive. Although 50% still saw it as a high taxation, history shows that this is the maximum level to which citizens are willing to face up to. Generally, 50% is the level of experience of the taxpayers in the United States, Canada, England, and other industrial nations of the first world.

The tax authorities developed a new strategy for the return of the English expatriates, since they believed that they would return to find everything as had been before.

The British tax laws included “deductions on foreign income”. In this scenario, if you were a British citizen and worked abroad for more than a year, and physically stayed less than 62 days in the UK during that year, you would be exempt from income tax on profits earned abroad. Therefore, it is not surprising that there was an exodus. The American IRS would never consider that idea-they would have too many taxpayers!

There was a slight deterioration in the plans for the former residents who were eager to go back to England. In the former justice, the Blair government decided that these repatriated citizens would have to pay taxes on their global income, if they had any income in the UK. It was considered as a sanction for leaving. Why did the tax authorities do that? The answer is: because they could.

The United States, as well as other countries with high taxes, are very aware of this before and after with the taxpayers. Therefore, strategies are being developed at a rapid pace, coincidentally with a program to a single word order. What will the government make for greater control of the citizens? Of course, they could even be more taxed. The countries and organizations have a program to eliminate tax havens, since they see them as an unfair tax competition. These countries include the United States, the United Kingdom, the European Union, the Organization for the Economic Cooperation and Development, the Financial Action Task, and the G-7, in other words, the countries and groups with the highest revenues and the strongest economies.