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Offshore financial centers
exist because of the differences in the types of taxes and the
rates charged to taxpayers around the world.
Offshore financial centers
offer the advantages of tax minimization, asset protection, and
estate planning. As long as differences exist in either the
types of taxes, or the rates charged, taxpayers will constantly
seek to carry out their activities in jurisdictions, which
impose the least tax burden.
If your accounts are resident
in an offshore financial center such as the Bahamas, the tax on
your investment earnings is zero. The result of properly
structuring your affairs offshore is illustrated by the
following example:
If you have $50,000 invested
in your high tax country of residence and your investment is
earning 15% per year (you wish). And if you're in a 50% income
tax bracket, then over the next 25 years, your $50,000
compounded annually will grow to $304,917. Your net rate of
return is only 7.5%.
However, if you invest the
same $50,000 offshore at a 15% rate of return and a 0% tax rate
it will be worth $1,645,948 at the end of 25 years. That's 540%
more money. The onshore tax bill will cost you $1,341,031 at the
same rate of return!
I say avoid the million-dollar
tax bill and go offshore! |
