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Law enforcement officials have had a difficult time cracking down on offshore islands and countries that aid investors in concealing income and tax evasions. These countries, such as Switzerland often have their financial companies marketing trust accounts as a way to protect income from lawsuits, but in fact often the main concern is to evade taxes in the investor’s home country. In effect, when one country is persuaded by the United States or the European Union to crack down on tax evasion, another country or countries step into the breach to allow expanded “globalized” opportunities to conceal income. Thus there is a boom in offshore investment in Singapore, and in Dubai. Now in February 2006, Switzerland has agreed to European Union requests to stop tax evasion. This in turn has created a boom in the setting up of tax shelters in the island nation of Singapore. Swiss banks have actually beefed up their Singapore branches in order to transfer client’s assets from Switzerland to Singapore. Singapore started strengthening their bank secrecy laws in 2001, which provide for substantial penalties for disclosing account information. It has also been a tax haven for income being made in China and other hot spots in Asia. Non-residents of Singapore or only required to pay taxes according to the laws of Singapore, on income that they earn in Singapore. The U.S. Senate admitted that evasion of taxes is out of control, and approximately 7-cents out of each dollar paid by taxpayers are evaded, for a total of at least $70 billion. The ability to run these types of operations is enhanced by use of the internet to run a virtual office from almost anywhere on the planet. This includes internet site, mail drop service, and phone service. If necessary, many facilities are available to rent a board room for a meeting in various offshore locations, if this is actually necessary. Singapore also has excellent communications and other physical infrastructure. It has become a regional banking center for Southeast and South Asia. The independent city-state is a relic of the British Empire, like the Bahamas in the Caribbean and Dubai in the Persian Gulf. In this respect, they continue the economics of the tradition of the British Empire, by protecting the right of the individual and financial syndicates to do whatever they want with their money, without interference from governments and tax authorities, though often controlled by a small clique of bankers.
Article Source: http://www.financemanual.com
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