| April 2008 |
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Quickie regarding the Shocking Trustee. Simply stated, the Shocking Trustee finally did the right thing and transferred the files ONLY after receiving our lawyer's letter of demand. Bottom line: the client's interests have been served and the client is happy to be done with the Shocking Trustee and Unpleasant Intermediary. Not good for the Shocking Trustee and Unpleasant Intermediary given the prowess of our client in his market, but c'est la vie! On to better things... I had two of those great adventures that make life worth living when I recently visited Lugano and Geneva. In Lugano, I was walking back to my hotel with all good intentions to get some work done after a busy day of meetings. I saw a small wine shop and decided to grab a bottle for dinner...the hotel’s wine list was average at best! I met Francesco, one of the owners, whose English was far better than my Italian, but problematic when trying to order a most excellent bottle of wine. After looking at labels, doing thumbs up, down and sideways to indicate good, bad or so-so, I settled on a nice Ticino Merlot. I paid Francesco, said “ciao” and started to walk out the door when quite a jolly fella walked in the store and said something to me in Italian. I apologized for my inability to speak Italian and, to my surprise, he said “You speak English. I speak English, but not often. Please sit down and have a drink with me.” Voila, six bottles later Jack, Francesco, Tony and Ricardo (the other owner) were fast friends. I called my Mom, who employed her best Italian to speak with the fellas. We had a most excellent evening despite the fact we had no food I now smile when thinking of the evening. This is a perfect example of why I say life is a holiday, and we should always accept an offer to have a great life adventure...even when you don’t speak the language. The photo of my friends is below. See you again later this year, fellas!!!
Off to Geneva, where I hooked up with Pius and Nino. The Noble Grape certainly featured in this evening, but it was the cheese and fun-loving waitresses who made it one of those great life adventures.
Onwards and upwards...and remember to avoid Shocking Trustees and Unpleasant Intermediaries... talk to people who don’t speak your language...drink excellent wine and eat yummy cheese...and, as the saying goes, always stop and smell the roses!!! |
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GCSL HONG KONG ON THE MOVE!!! The GCSL Group of Companies Limited Watch out for an invitation to a GCSL Cocktail Party in the coming weeks!!! VISITS TO GCSL SINGAPORE
ITPA BARCELONA AOA DUBAI – WHAT HAPPENED IN DUBAI IS STAYING THERE…WELL, NOT REALLY
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The AOA has many plans for 2008 including the following:
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BANKS MIXED RESULTS DUE TO SUBPRIME AND STRUCTURED INVESTMENT VEHICLES Contributed by Elie Sfeir, General Manager – Fiduciary Services, GCSL Hong Kong |
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Taiwan election One of the main reasons for Mr. Ma’s victory was that the Taiwanese business people, so called TaiShang, hoped the policy of SanTong* between Taiwan and China will come to fruition. The benefits of SanTong include:
The power of SanTong was demonstrated on the second day of the Taiwan presidential election when USD3 billion returned to Taiwan which caused NT$ to appreciate to USD1: NT$ 30.0029. Two months ago it was USD1: NT$32. The central bank of Taiwan is now expecting another infusion of USD20 billion. Whether or not the NT$ will appreciate to 1:26 is very much on people’s minds. * SanTong is from the “Cross-Straits Act” which was discussed between Taiwan and China 10 years ago. It seeks to liberalize transportation, logistics and reduce business investment restrictions between Taiwan and China |
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2008: THE YEAR OF M&A RULES FOR SERVICE INDUSTRY TO BE LOOSENED CHINA GRANTS TAX BREAK TO MUTUAL FUNDS CHINA EASES REGULATIONS ON OUTBOUND FUNDS Contributed
by Johnson Chien, General Manager - Fiduciary Services, GCSL Shanghai |
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WHERE ELSE? No, Singapore. The Republic is now preferred as the best place for Asian expatriates to live worldwide, according to the latest survey by human resources consultancy firm ECA International. Singapore surpasses cosmopolitan cities such as Sydney, Melbourne and Copenhagen in Asian expatriates’ view, the survey showed. These cities are ranked second, third and fifth respectively in the top 15 locations for Asian expatriate living. Meanwhile, Kobe (joint third with Melbourne), Yokohama (eighth), Tokyo and Hong Kong (both fifteenth) are the only other Asian destinations that made it to the top 15 list. Conducted annually, the Location Ranking Survey compares living standards in 254 locations globally, taking into account climate, air quality, health services, housing and utilities, isolation, social network and leisure facilities, infrastructure, personal safety and political tensions. Nevertheless, Singapore has consistently been ranked the best location for Asian expats to live for a decade and it likely will retain that spot despite Hong Kong moving up our rankings this year after sliding for several years, due to improved personal security scores and the movements of locations around it. At the other end of the pendulum (no cigars, please), Baghdad is the least favored place for Asian expats to live in, followed by Kabul (Afghanistan), Karachi (Pakistan) and Port-au-Price (Haiti), due to their risk to personal security and lack of suitable facilities, according to the survey (some of the risks may even not be insurable). Contributed by Lawrence Fong, Managing Director, GCSL Singapore |
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USA: FRIENDLY IRS http://www.irs.gov/newsroom/article/0,,id=180075,00.html Now far from us to be skeptics when it comes to the common part of common sense, it appears that the maxim “a fool and his money are soon parted” is true as “Granddad Sam” seeks to protect people from their own stupidity and greed. “Phishing” and “Economic Stimulus Payments” involve the obtaining of personal information in the name of the IRS including credit card, bank account numbers. By now there shouldn’t be a person in the world who doesn’t know that banks and government authorities never ask for such information over the phone or internet. In any tax system of rampant over-taxation there must be credits to politically cushion the pain. Some of the IRS stated scams include the push towards the invisible panacea of “Green” (itself a scam of epic proportions) has seen “Fuel Tax Credit Scams” where individuals are claiming tax credits for non-taxable uses of fuel. Little surprise when oil is over USD100 a barrel. Some taxpayers are abusing the “Claim for Refund and Request for Abatement.” Many of these individuals have not previously filed tax returns. As predictable, “Abuse of Charitable Organizations and Deductions” will always occur in a system that gives a deduction for donations to a “charity” and not the greatest charity of all that is the USA Government. Many claim that the elderly are abused so little wonder that they are now fighting back with “Abusive Retirement Plans” fiddling asset valuations. The more creatively titled “Frivolous Arguments” header covers taxpayers wishing to make up even more creative tax positions such as objections to military spending. Some don’t go to much effort. The “zero wages” scam argues the statutory definition of wages and “return preparer fraud” relies on scammers asking for a percentage of the refund or inflated fees for preparation. The preparer is profiting on stupidity here as there is only one result they are going to give you if they are taking a cut of the refund and it’s a LARGE refund. Of more concern to the offshore industry is the misrepresented “Hiding Income Offshore”, “Disguised Corporate Ownership” and “Misuse of Trusts”. While we accept that there are promoters who genuinely belong in the http://www.quatloos.com “Cyber-Museum of Scams & Frauds”, legitimate tax and trust planning under the close guidance of qualified, reputable and educated advisors is allowed within the boundaries of the law. Even under Uncle Sam’s watch. Contributed by Cathy Odgers, Group Legal Counsel and Compliance Officer, GCSL Hong Kong
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A TAXING BLOBAL FUTURE? Regrettably, many politicians seem to think that the answer to every alleged social and political problem is imposing higher taxes. Now, even the U.N. wants to create an International Tax Organization (ITO) with the power to interfere with national tax policies. And U.N. officials have been quite open about their intentions. The chairman of the U.N. panel endorsed the creation of the ITO indicating it would “take a lead role in restraining tax competition.” According to the misguided U.N. mentality, it’s unfair for one country to have lower taxes than another. The original report looked at two options, a tax on currency transactions and a tax on energy consumption. The U.N. has already endorsed taxation of the Internet, particularly a tax on e-mail. The U.N. thinks it is “unfair” when talented people leave high-tax socialist nations and move to freer countries offering better opportunities. The bureaucrats are proposing to let governments tax expatriates income earned in other nations. These narrow-minded bureaucrats simply don’t understand that money and people go to where they are treated best. You should worry about the U.N. plan as it is just one of several international bureaucracies working to undermine fiscal sovereignty and dictate higher taxes. For example, OECD targets “harmful tax competition” and the Brussels-based European Union enthusiastically backs “tax harmonization.” And closer to home for U.S. taxpayers looking to leave U.S. soil, Congress in its infinite wisdom looks prepared to implement an “exit tax” for those adventurous souls looking to fresh horizons. The new law would impose onerous taxes in addition to the current expatriation tax rules. Why to people expatriate from the U.S. in the first place, you ask? There are many reasons. Perhaps they are returning to their roots, or to a new home of choice; some are international individuals; and others might look to find the “American Dream” offshore...they are not necessarily tax motivated, as Congress ‘mis’-represents. And U.S. taxpayers living abroad are keenly aware that the U.S. tax system is unique in imposing a draconian tax on their worldwide income regardless of residency or source of income. For U.S. clients, I generally recommend a U.S. domestic grantor trust for integrated international asset protection planning, offshore investing and pre-migration planning. This variety of international trust is “tax-neutral” and “user- friendly” and mitigates certain planning issues. 100 years ago the U.S. and most major western nations were on the edge of a new prosperity. These same countries had little or no national debt. What followed was one of the most successful economic periods in history. When the first U.S. national income tax became law in 1913, the entire Internal Revenue Code fit into 173 pages. Today? The IRC contains over 60,000 pages and there are nearly 500 IRS forms, each with many pages of fine print instructions and schedules to be attached. What’s more, the IRS publishes and distributes over 8 billion pages of forms and notices each year which – if laid end to end - would circle the earth 28 times! And think for a moment how many tax dollars you pay every day, directly and indirectly, that didn’t exist even 20 or 30 years ago. And now, potentially more taxes from the U.N.? What happened to our brave new world? Contributed by David Tanzer, international lawyer and author of How to Legally Protect Your Assets and Offshore Living & Investing located at www.DavidTanzer.com. David’s email address is Datlegal@aol.com |
UK BUDGET 2008
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NON-DOM CHANGES A non-UK domiciled individual or non-dom is broadly an individual who is resident in the UK but whose origin and permanent home is abroad. A non-dom currently pays UK tax on their UK income and capital gains but will not pay any UK tax on their overseas income and gains as long as they are kept outside of the UK, i.e. ‘remittance basis’ of taxation. Non-doms are also not currently subject to various anti-avoidance measures in respect of the use non-UK resident trusts and companies. From 6 April 2008 a non-dom who has been UK resident for 7 out of the last 10 years will be required to pay an annual fee of £30,000 in order to continue to benefit from the remittance basis. This is with the exception of non-doms who have £2,000 or less of un-remitted foreign income and gains. All non-doms wishing to claim the remittance basis, regardless of their length of stay in the UK, will no longer be entitled to the personal allowances and capital gains exemption. If the £30,000 is not paid the remittance basis cannot be claimed and the non-dom individual will be taxed in the UK on a worldwide arising basis. It was confirmed in the Budget that the £30,000 charge is to be treated as income or capital gains tax for the purpose of Double Tax Agreements. As well as the headline £30,000 charge there will be changes to the taxation of non-UK trusts and companies of non-dom individuals. The original proposals announced in this area were very far-reaching, but much of the proposed legislation was subsequently amended by the Budget. The use of non-UK trusts by non-doms may therefore remain advantageous. Finally from 6 April 2008, many of what have been referred to by the UK Government as ‘anomalies’, will be removed. These were accepted methods by which non-doms could bring funds to the UK from overseas without a tax charge and include the ‘source ceasing rule’ and ‘cash only basis’. The review also looked at matters relating to day counting for residence purposes. Current practice is to ignore days of arrival and departure and it was proposed that such practice would be fully reversed with days of arrival and departure being counted as days of residence. The Government announced in the Budget that they had settled on a compromise, stating that the rules will be changed so that only days when an individual is present in the UK at midnight will count as days of residence. Contributed by Robert K Essex, Taxation Manager, Intrust Limited, Robert.essex@intrust.co.uk. |
DUBAI: ETISALAT BIG DIVIDEND In its meeting on Monday, the assembly also approved the distribution of a 20% share dividend, with one share distributed for each five shares. Contributed by Elie Sfeir, General Manager – Fiduciary Services, GCSL Hong Kong |
PANAMA: EXTENSION OF TAX EXEMPTION LAW WILL BOOST FOREIGN REAL ESTATE INVESTMENT Contributed by Ms. Lorena Velásquez, Patton Moreno Asvat, Panama, lvelasquez@pmalawyers.com |
CENTER FOR FREEDOM & PROSPERITY STUDY  This flat tax revolution is changing the world. Jurisdictions with the most aggressive and far-reaching single-rate tax systems, such as Estonia, Hong Kong, and Slovakia, are enjoying rapid economic growth. Flat tax systems also are leading to more revenue in many cases, reaffirming the Laffer Curve notion that reasonable tax rates and strong economic growth are the best way to generate monies for government. Perhaps most important, the flat tax revolution signifies a victory over the notion that the tax code should be used to penalize those who contribute most to economic growth. The ultimate irony is that this revolution in both economic and moral attitudes is being led by nations in Central and Eastern Europe-countries that were part of the Communist Bloc less than two decades ago. Contributed by Dan Mitchell, Senior Fellow of the Cato Institute and co-founder of the Center for Freedom and Prosperity (www.freedomandprosperity.org). |
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ANGUILLA: THE FINANCIAL SERVICES COMMISSION DETAILS RESPONSIBILITIES OF INSURANCE MANAGERS Section 8(8) of the Insurance Act requires every insurer who maintains a Class B licence to appoint an insurance manager. This is the service that GCSL Anguilla offers to licensed insurers in Anguilla. An insurance manager is defined as a person resident in Anguilla, who not being an employee of any insurer, is or has available to him, a person(s) with such insurance knowledge and expertise as the Commission may deem necessary for the conduct and management of the insurance business of any insurer(s) in a competent manner. The guidelines specify that the insurance manager should act as a consultant and advisor to the managed company in respect of insurance matters and be responsible for or have oversight of the following:
The guidelines go on to state that the insurance manager is also responsible for the effective management of the insurer. This includes, but is not limited to, doing the following:
The Commission has mandated the entering of contractual arrangements between the insurance manager and the insurer. There should be a formal agreement between the two parties which will describe and govern their relationship and set out the respective functions, duties and responsibilities. The agreement should address the following:
GCSL Anguilla welcomes the issuance of these guidelines and will, of course, comply with the same while working with licensed captive and other insurance companies to develop Anguilla as a reputable insurance domicile. Contributed
by Carlyle Rogers, Managing Director, GCSL Anguilla |
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BELIZE: TAKING TIME OUT... I also realized I wanted to talk about this issue from some time ago, but it was nestled at the back of my mind. We have become dependent on technology to keep us connected. Some of us cannot even dream of what the world was like before the internet as we now know it. Interestingly enough, some of us can remember the days when the fax machine (Jack remembers the Telex!) was cutting edge business technology, and computers used 12 inch floppy disks, the same size as a floor tile! Cutting edge, I tell you, back in the day. What is the message I am trying to get across here? We hold this vaunted internet in such high regard that we experience much the same withdrawal as alcoholics going through rehabilitation. We feel that without that level of control in our lives, at any point, we are spiraling down into chaos and personal anarchy. In this day, we are able, with the touch of a button or the movement of a mouse to transfer huge amounts of money, pay bills, and act almost like God. It is tremendous. In the same way, having managed as an individual to make one’s money, we are then asked, as Settlor, to hand it over to some offshore trustee who will possibly operate on our behalf, and then organize affairs so that the money is properly invested and the beneficiaries are taken care of at the contemplated time. I believe that this is a hard sell for most people. After all, who is this fellow from Belize walking in to meet me and do what, only God knows, with my money? I worked hard for this money, why should I give it to Carlo Mason from GCSL, no matter how good looking, suave and debonair he is (ok, so I embellish)? If I can make it, surely I can manage it the way I want to, without having to give it to Carlo. After all, in giving it to him, I lose my control over it. How can I just give away my money to him? What people do not understand is the never ending saga of what I call the “Protection/Exposure Spectrum.” The theory here is quite simple, and one on which I have spoken of before: protection from one’s creditors or potential creditors, in an offshore trust relationship, is perhaps only attainable where the Settlor loses all “control” over the trust property, and no longer retains any authority over its dealings. It is inversely proportionate, therefore, to one’s exposure. The more control one has over one’s trust, the more exposure one has to liability arising from these matters. With Belizean trust law, this is such an integral part of the whole working of the relationship. The Settlor can comfortably be deposed, and can also truthfully indicate that the money was transferred to the Trustee for whatever reason, be it for investment business or for the preservation of his or her assets for the benefit of the named beneficiaries. Without the protection offered by the offshore trust, the Settlor is as exposed as anyone trying to run from their house with a suitcase load of money. I hope you understand that we offer this protection for as long as you are willing to have us operate in that capacity. We do not shirk our responsibility, neither do we take it lightly. This is who we are, what we do, and we always do our job. Contributed
by Carlo Mason, Managing Director, GCSL Belize |
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COOK ISLANDS: GOVERNMENT SERIOUS ABOUT TH E OFFSHORE INDUSTRY It is still early days, but Puai Wichman is one of two representatives from within the Trustee Companies Association (“TCA”) appointed to this all important Committee, together with representatives from Government and the Regulatory body of the Cook Islands. The objective is very simple: grow the financial services sector in the Cook Islands. The TCA, made up of all trustee companies within the jurisdiction, has shown its full support for the initiative and has made recommendations on how this objective can be achieved. The Cook Islands is a very small financial and offshore jurisdiction by world standards. Yet it retains considerable unrealized potential. Despite its early growth in the late 1980s and 1990s, the offshore financial services industry has suffered severe setbacks in recent years due to changes in the international financial environment. Despite the setbacks, the industry has continued to provide significant direct revenue to the economy. However the decrease of these contributions shows how important it is that the industry is developed. The first task is to identify the strengths and weaknesses of the jurisdiction and from there devise a strategic plan forward. These initiatives are a long time coming, but its better late then never. With his long association with the jurisdiction, Puai Wichman, who is also the current President of the TCA, is leading the charge for the development of the industry. If the initiatives being recommended by TCA are adopted, it will have far reaching consequences for the industry in the Cook Islands as well as the economy in general. As a Cook Islander, Puai has a vision to see the industry overtake tourism as the main source of revenue to the Cook Islands. Watch this space for developments from the Cook Islands.
Contributed
by Puai Wichman, Managing Director, GCSL Cook Islands |
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SAMOA: CREDITOR CONTROLLED INTERNATIONAL COMPANY At this point in time, we would like to offer a few pointers on the registration of a CCIC, i.e. a Creditor Controlled International Company, in Samoa. The benefits are similar to that of a Company limited by guarantee, or rather, it is registered without share capital and can operate without shareholders and all the usual rights normally exercised by the shareholders accrue to the holder of the bearer debenture. Other advantages include:
This Samoan creature may be of interest to professionals seeking unique solutions for their clients
Contributed
by Laura Fepuleai, Manager, GCSL Samoa |
Many are touting that the offshore jurisdiction of the Cook Islands has the potential to become the largest source of diversification in the income base of the country which is heavily dependent on tourism.
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The things that make us smile, frown and generally make life interesting... OUR MONTHLY QUOTE THAT MADE US SMILE CONFIDENCE IN GOVERNMENT - SAGGY PANTS LEGISLATION CONFIDENCE IN GOVERNMENT TAKE TWO - NATIONAL SECURITY GAFFE WE LIKE BOTH OF ‘EM!!! SMART GOOGLE...JUST WHAT I ALWAYS KNEW I NEEDED...YEAH RIGHT!!! WHY DID THIS CEO GET PAID SO MUCH WHEN HIS COMPANY WROTE OFF BILLIONS? CELLPHONE FOR SIX YEAR OLDS...WHATEVER HAPPENED TO FUN IN THE PLAYGROUND? |
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The contents of the Global Consultants and Services Ltd's ("GCSL") Newsletter is for reference purposes only, and is provided by GCSL as a complimentary service. We have reviewed many different publications to compile this information, and we recommend that readers conduct due diligence before acting on any opinions mentioned herein. GCSL, its directors, officers, shareholders, employees, affiliates and agents do not warrant the accuracy or reliability of any information made available herein. In accordance with the Personal Data (Privacy) Ordinance, Chapter 486, of the Hong Kong Special Administrative Region of the People's Republic of China, we hereby inform you that we will discontinue sending our newsletter to you in the event you request we do the same. |
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