How do millionaires use tax havens and offshore companies?

millionaires tax havensAuthor Jake Bernstein dedicates his most recent book “Secrecy World " to enlighten from his point of view, how the so-called "tax havens" and the ways in which millionaires use offshore companies to lower their tax burdens operates.

Bernstein assured that creating an offshore company is a relatively easy process and can be done with jurisdictions in countries such as Panama, the British Virgin Islands or Delaware or Nevada and, generally, in places where there are laws of protection to ensure the final beneficiary data. In this way, the nominee directors of an offshore company can be the public face of the society, but tare not the real owners.

The fact having an offshore company does not necessarily mean that it will be used to commit an illegality. For example, if a person wants to do some commercial activities, but does not want certain business partners to know of it, then the offshore company works well. However, Bernstein said that the most common use of the offshore company is to avoid the payment of taxes.

To substantiate his claim, Bernstein clarifies that the U.S. Treasury estimated that about 300 billion dollars a year are laundered in the United States. Foreigners enters and buys properties with offshore companies, and part of that is perfectly legitimate meanwhile the other part is clearly money laundering and corrupt officials with other people using their cash to place it on the property.

Even though, according to Bernstein, the offshore world is a problem, thousands of people continue to use it. The problem, with the book's author, is that the IRS is still ineffective in pursuing offshore companies. The writer praised the leaks of documents, such as the Mossack-Fonseca signature that originated the "Panama Papers", since they have helped, according to him, "to have the IRS and the rest of the public really have a vision of how the offshore system works and how big and comprehensive it is.”