Sunday, December 11, 2011

London, the citadel of the offshore world

Why bother with black lists and immobilization of bearer bonds in BVI and other countries? You can get bearer shares from United Kingdom Limited Liability entities and be welcome by tax authorities and banks in most countries which have black lists copied verbatim from the France-based OECD.

The final irony is that Panama and the United Kingdom will start negotiations for a double-taxation agreement


The modern offshore company, which began its all-conquering journey in the islands which once formed the British Empire in the 1970s and 80s, can justifiably be described as an English invention. At that time, it was also possible to incorporate so-called "non-resident" companies in England, which, if managed from outside of the United Kingdom, were not subject to taxation in England, although even then London could never have been described as a classic offshore zone.

This possibility ended in the early 90s, but, England, and in particular, London remained an extremely popular place for the incorporation of companies, for both English and foreign businesses alike. Numerous businessmen chose to incorporate in London; Companies House now boasts a register with over three million companies, ranging from small business to multinational companies. So what makes people want to incorporate in London?

The tax advantages related to English companies

The above shows quite clearly that English companies cannot be categorized as traditional tax-free companies, and in fact they are quite the opposite. How, therefore, can English companies be used advantageously in international business transactions? The following section shows just two of the possible uses.

Trading company for nominee purposes.

Blacklists have meant problems for a large number of offshore companies, particularly those providing services. One very efficient way of overcoming this problem is by using an English company, which concludes a special contract with the offshore company, which may be incorporated in a traditional offshore zone such as The Bahamas, BVI or Belize. According to the terms of the contract, the English company concludes contracts with foreign partners on behalf of the offshore company, prepares invoices for the total amount of the services provided, and receives full payment into its bank account, although the offshore company actually provides the services. Periodically (as defined in the contract between the English and offshore companies), the English company is entitled to an agency fee of between 5 & 10 % of the value of the contracts concluded. The English company must declare this income and pay tax accordingly, whereas, the remaining 90-95 %, is transferred to the account of the offshore company, as set down in the contract. An offshore company is subject to tax in England on income with an English source. Although the offshore company operates through an English resident company, the actual source of the income is not England, but the foreign partner. At the same time, it is an important condition that the offshore company should be managed from outside England, and that the directors, shareholders and bank account signatories of the offshore and English companies should not be the same people.

Dual resident companies

An English company must be classified as resident in England if it was incorporated in England and/or the majority of the directors are resident in England and manage the company from England. However, according to the agreements made by England for the avoidance of double taxation (DDTs) it is possible for a company to be resident in two or more places, if, for example, it is managed from a different company. Such companies are known as "dual resident companies". As long as the company is managed from a country which is protected by a DDT, then the company can apply to the English tax authorities to be taxed in that country rather than in England. And if that country has more favorable rates of taxation, then it is worth operating the company as a dual resident company. Currently, the most attractive jurisdiction with which England has signed a DDT is Cyprus. According to Cypriot law, if a company, or a branch of that company, operates outside Cyprus, then that branch is subject to the 4.25% profit tax of the worldwide income. The English company becomes resident in Cyprus by establishing an offshore branch there. The majority of the directors of the English company must be Cypriots and all the decisions relating to the running of the company must also be managed from outside England, preferably from Cyprus. Similarly, the company must not receive income from English sources. This is all the more problematic as activities carried out in England are subject to VAT. Dual resident companies must file annual returns in both Cyprus and England, but can also take advantage of the DDTs signed by Cyprus.

This information is not intended and should not be construed as concrete tax advice. Should you wish to make use of one or any of the structures mentioned, we recommend that you consult your personal tax adviser, as well as experts on the legal systems of all the countries involved.

Source: LAVECO brochure. Extract posted with thanks to N. Remé (Humboldt-Universität zu Berlin, EJP).
Photo: UK Inland Revenue offices

Former strongman returns to Panama "largely irrelevant"

PANAMA CITY, Panama - More than two decades after the U.S. forced him from power, Manuel Noriega returned to Panama on Sunday as a prisoner and, to many of those he once ruled with impunity, an irrelevant man.
Some Panamanians feel hatred for the former strongman and rejected American ally; a few others nostalgia. But as he returned to his native country for the first time since his ouster, it seemed like few people had any strong feelings at all.

Noriega was convicted in absentia in three homicide cases involving 11 murders, including the 1985 beheading of Hugo Spadafora, a physician who threatened to reveal Noriega's drug ties, and the 1989 execution-style slaying of nine officers who staged a failed coup.

Sentenced to 20 years in each case, he will serve the terms concurrently. Official photographs of the facility prepared for him at the El Renacer prison showed a spartan, beige-painted cell with a bathroom, table and small bed.

Noriega will also face charges over the 1970 murder of Heliodoro Portugal, an opponent of Panama's military leaders.

Panamanian media showed images confirming the imprisonment of the former strongman, while pointing out at the cameras.

Friday, December 09, 2011

Las Uvas: The town that only exists in paper


The desolate lands in coveted Juan Hombrón

Before the coastal peninsula became a public issue, 'La Estrella' visited it twice in three years and found no traces of human life in the place

12.07.2011 Title resolutions issued by the Ministry of Finance for the twelve corporations listed 45 people. The vast majority alleged land holders, the others, witnesses, 'who have declared under oath that they are residents and residents of the community in Juan Hombrón Las Uvas, district of the chiru, a district of Antón, Cocle province '.

In almost all cases the residence period exceeds 20 years. In no case is less than five.

I tried to visit the community of Las Uvas three years ago, on November 13, 2008 to be exact. A few miles west of Rio Hato is a stone path that runs from the Panamerican highway to the sea, where the five or six houses of Juan Hombrón are.

If the tide is low, the peninsula can be reached on foot or by car.

I drove along its length. A group of investors were attempting to obtain title land which rights of possession they had bought from some fishermen, and I researched for La Estrella.

I found a strip of sand, half covered on the lagoon side of the scattered scrub. Aside from insects, crabs and birds, it was empty of animal life, and the only trace of human life were a couple of decaying ranches, rotting from rust.

I could not visit the community because there was none! although 45 people have said, 'under oath', who resided in it when I visited the peninsula.

In January this year, the 28th, two journalists from La Estrella went there. Cortez Zelideth reporter and photographer Luis Garcia.

They found the same as me, except that now there are three ranches. Apart from the two and their guides, no one was there.

What would have happened to the 45 residents? Could it be that, on both occasions, they were all on vacation.

Residents often have residences. What has happened to them? Neither I nor Luis Zelideth not see nothing worthy of appeal. Perhaps the residents, such as snails, had brought, or penalty of perjury may not weigh much in the Las Uvas, as elsewhere.

Zelideth and Luis spoke with some of the persons mentioned in the land title resolutions.

They live near Anton, several miles from Las Uvas. They said that sometimes, when fishing, they spend the night in Las Uvas.

It may be true, although it would have been necessary to bring drinking water, for on the peninsula there is not a drop. You may tell the truth, but spending a night in a place from time to time is something different from what the alleged inhabitants of Las Uvas declared "under penalty of perjury ', and gives no possessory rights over anything.

Some of the people mentioned in the resolutions have the same names and identification numbers that they sold their alleged possession rights to the group of investors that I researched in 2008. I do not blame them at all. There are wealthy bums who make their land scams, it is fair that poor people take something, and the most they got was a few thousand dollars.

A funny thing happened when the group tried three years ago to obtain title in Las Uvas. A real estate broker named Jimenez sent an e-mail to Mr. Steve Guthrie, Denver, United States, secretary-treasurer of Grand Panama International, offering lots at bargain prices. 'He wanted to sell land that we had bought from Mr. Lucom and for which we had paid half a million dollars!' said Guthrie.

"That lagoon is where we thought of putting the marina, and without those miles Santa Monica beach is unfit for the project."

RANCHES. In Juan Hombrón (Las Uvas), the houses look more like ruins. Photo: Luis Garcia | La Estrella