US Residents Beware of Dangerous Offshore Products and Banking

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Right from the get-go — this is my territory. I know the legalities and practicalities of the offshore world better than all but, maybe, 500 experts in the world. If you don’t know one of these people (and none of them is on the internet trying to sell you something) then please listen to me with both ears.

  1. I know many US residents want to diversify their banking and their portfolios to other countries. I don’t blame them.
  2. I know many US residents are tired of the tax system and are looking for relief.
  3. I know many US residents know a bit about “offshore” especially with the bombardment of enticing banking offers in Belize, Panama, or “other jurisdictions”.

I’m going to tell you the truth.

It is almost impossible for a US resident/citizen to get out of the US tax system legally. It IS impossible for a US citizen to set up a bank account he controls with more than $10,000 CUMULATIVELY ANYWHERE IN THE WORLD without reporting it on his regular tax return and a special information filing that makes you actually list the banks and account numbers. Unless the bank is in the US

There are some ways around all this. I have not seen any of those ways ever mentioned on the internet and my email is flooded with offers.

  1. It is almost impossible to get a foreign bank account without presenting a utility bill. If the utility bill is from the US, then why are you even trying?
  2. There is no use in buying offshore companies (IBCs) unless you can get a bank account THAT YOU DON’T HAVE TO REPORT TO THE IRS.
  3. That immediately limits your total worldwide non-US deposits to less than $10,000. So why try?
  4. Managing an offshore bank account from inside the US is not just stupid, it’s a death wish. In case you don’t watch the news, these government guys are very, very serious about catching people just like you and making examples of you.

Rule: Panama Foundations are stupid. First: if YOU get a bank account for it, you’re screwed. Second: if you let someone else open an account for you, you’re screwed.

Rule: You do not trust anyone else with your money unless you can also trust them with your life. Even in the US Trusting days are OVER! For example, unless you have family in Panama that you trust, then you don’t know anyone you can trust in Panama. Panama is a synonym for anywhere. You cannot trust banks or lawyers. Period. There are no exceptions.

Rule: If you want to diversify your portfolio to a foreign location, then GO TO THE PLACE and check it out. I’m not a fan of US banking, but I gotta tell you that once you’ve been to some of these places, you wouldn’t want to change a $20 bill at a local bank, let alone leave your money there. You go to a few restaurants and grocery stores and watch them hold every bill you give them up to the light to check it for counterfeiting. What does that tell you?


  • Find an HSBC near you in the US Open an account. Nothing to report.
  • When you are abroad, find another HSBC. Present your US HSBC banking bona fides and your account will be opened smoothly. Don’t put more than $10,000 in the account. HSBC is a synonym for any solvent foreign bank with a branch on US soil. Most advisors say never do this. They’re right. But since it’s very hard to get an offshore bank account as a US citizen without a reference letter from your US bank, then I respectively disagree with the experts. Get a bank account at a local branch of a foreign bank and then go open the real account with your sterling US credentials. Not perfect in the hide-and-seek game, but not much anymore.
  • If you have real wealth, but not enough to want to spend $50,000 for real international lawyers, start reading about “dynasty trusts” and check out Nevada as a jurisdiction. These are bulletproof US entities that can survive a government or creditor challenge or your death a lot better than an offshore trust.
  • If you’re really serious, become a RESIDENT someplace else. Not a citizen. A resident. Much easier and it doesn’t cost a kazillion dollars for an economic passport. Once you are a resident, with the proper ID, you can open bank accounts in your new country of residence that are not linked to your US documents. Is there still a reporting requirement if you reach the limit? Yes.
  • If you’re so inclined, you should explore “territorial tax” or “no tax” jurisdictions for your residency. See if your dream wish list can be matched with countries that have tax advantages.
  • If you’re flush, then buy a good-deal condo someplace you actually wouldn’t mind living in and then rent it out. If you can get a mortgage on it, great. But foreign lenders usually want 50% down. Make it a cheap condo. The condo gets you the utility bill you’ll need to open a bank account. But once you’re “there” sometimes utility bill requirements go away because your official address is on your government ID By the way — YOU CAN USE YOUR IRA FUNDS for buying foreign real estate. If you’re nervous about the state of the US, clean out your IRA and buy foreign real estate. Do I need to tell you that due diligence is very, very important. Don’t buy anything that is not someplace you may have to live. You might have it.
  • If you can’t afford a cheap foreign condo, then re-think the whole international thing and go buy some gold coins or bullion before you have to register it.
  • If you’re a bona fide resident of a foreign country there is a huge exemption on US taxable income. Take it. That’ll save you a pile right there.
  • Don’t get too cute about encryption and secrecy. You hide in plain view.
  • For God’s sake, if you’re not a billionaire, don’t renounce your US citizenship. Just get the hell out if you don’t want to stay. Times change. It’s a good passport and with the tax exemption you’ll rarely pay US tax anymore.
  • Learn to make money via a portable trade or occupation before you move away from the US. You take your cash flow with you. And remember the banking $10,000 limit? That’s money you have IN A BANK ACCOUNT. Not money you make and then take out of the bank and keep at home or in a vault. Remember, you’ve declared it even though you didn’t pay tax on it. It’s legal.


  • There is absolutely no way to open a bank account for a COMPANY you own and put more than $10,000 in it and not report it, even if you don’t sign on the bank account. If you don’t report it is a serious felony and prima facie tax evasion. Undoubtedly you’ll also be charged with money laundering.
  • If you actually sign on the company account, even if you’re a minority shareholder, and there’s more than $10,000 in it and you don’t report it to the US, it’s also a felony and is prima facie tax evasion. And money laundering.
  • If you file a US tax return and fail to report foreign earnings? More trouble.
  • If you set up a trust, but you indirectly control it, it is a crime if you don’t report it annually via a very obnoxious IRS filing that’s about 40 pages long.
  • If you set up a trust with real money in it – in an offshore jurisdiction – but you don’t control it, you’re a fool. I hope you see the rock and hard place set up.
  • There are trustees you can trust. You don’t know any of them or you wouldn’t be reading this.


  • Lots of decent-sounding banks have low entrance requirements. They don’t drill down too deeply before they will “accept” your deposits. Nice online service. Encryption. Privacy. Multi-currency accounts. Your confidence grows. You move more funds there. Perhaps you’ve decided you’re going to play tax games and you don’t exactly declare all the money on some country’s tax return. Your balance builds up. One fine day it hits, say, USD$100,000.00 and you decide to pull out $25,000.00. Suddenly your account is frozen by the “compliance” department. They will want to see you passport copy again, your utility bill again (oh, you let that rental condo go?), they’ll want a declaration and proof of the origin of the funds and, yes, they might even want to see a tax return. Folks, I’m not talking about some piece o’ sludge bank in Belize. I’m talking about a nice Swiss bank. And not a US citizen owner. And a year to get it untangled.


These are troubled and dangerous times. Everyone wants your money – which equates very quickly to a large chunk of your life. Your country. Other countries. Banks. Government agencies. County property tax authorities. State or provincial governments. Sales tax authorities. Added to that list of “official” pirates, you now have offshore pirates who want to sell you legal useless stuff.

Keep your money where you are. If you want to diversify, actually go somewhere and do something. As in go explore options and then get the hell out. If you don’t have that kind of money and you’re still scared, join the club. And keep your money hidden in your home and/or buy some silver and gold.

There are NO third party investment opportunities. If you don’t watch your money, it will disappear. Do not land. All loans are bad loans. Invest in and near yourself.

The real bad times have not even begun. This is, at best, the eye of the storm.

Author: Jack Campitelli, JD has lived and worked in a number of tax-advantaged foreign countries. He has taught asset protection inside and outside the US. He knows most of the folks in the business. His website is His suggested books de jour are “Portable Trades and Occupations” and “Bye Bye Big Brother” available at ascolibooks com. If you want to start an internet business as a portable trade, then consider his Legal Guide for Websites

Jack is absolutely not available for “offshore” consultation!

Copyright 2010 by RioneX IP Group LLC. All rights reserved. This material may be freely copied and distributed subject to the inclusion of this copyright notice, author information and all the hyperlinks are kept intact.

by Jack Campitelli, JD

September 10, 2010

Source by Jack Campitelli

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