Offshore Credit Card

An Offshore Credit Card

That seems to be the common lynch-pin of the "offshore" dream....especially of the wanna-be's.

Now, I don't use the term "wanna-be" in a derogatory fashion. Heck, I'm one of them. I use it to refer to the person who wants to be at the level where he can have a few 10 million USD sitting idle in an offshore account protected from would-be frivilous lawsuits, creditors, and changes in their respective tax laws -- but isn't quite there yet.

This is the group of people wants and needs more than infrequent access to that money. With the scrutiny an offshore bank wire invites, not mention the cost and hassle, what could be better than having your money safely ensconced offshore in a tax haven -- presumably with strong bank secrecy laws -- and having immediate acces to you funds back home?

Not So Fast

Well, unfortunately, for most residents of high-tax regimes, the tax collection authorities have been wise to this scheme for quite some time. They've even had the time to release some official directives regarding the use (and abuse) of offshore tax shelters and an offshore credit card for convenient, supposedly secure access to your money.

You can click on this link to view more what the IRS has to say about offshore credit cards in their offshore credit card program memorandum.

Offshore Credit Cards are Legal -- Tax Evasion is Not

If you'd rather not dig through an IRS document (who can blame you) I'll save you some time. The IRS's official stance is that like an offshore bank account an offshore credit card or using offshore atm cards to access the money in your account is not illegal -- as long as it is not done as part of a scheme to evade taxes.

Duh, huh?

So, for the average US citizen this isn't really a great route -- because odds are, you have the offshore account and credit card or bank card as a means to hide money from someone, right? Following the US federal government's directives, you are obligated to file a form with the US Department of Treasury for any offshore account.

Presuming that it is NOT the US government or tax collection agencies that you are trying to hide the money from, is it conceivable that your creditors could subpoena such information and get it directly from the US government. Are you willing to lie under oathe if asked directly regarding ownership of assets offshore or an offshore account specfically?

So, How CAN I hide money offshore?

Like the old saying goes, probably the best way to do this is by hiding it "in plain site". In other words, through a more complex offshore asset protection structure designed specifically to protect your assets in cases of direct attack -- even when the litigants (or attackers) know about the structure itself.

OK, admittedly, these aren't the cheapest thing to setup. However, if you have sizeable assets, and/or a good chance of having your assets come under attack by an estranged spouse, settlement, court order, criminal mischeif, or tax law changes detrimental to your previous asset planning it could be money very well spent. What is the price of peace of mind?

If you want to know about forming trusts or an offshore company formation, following the links to read more. Depending on your needs, this company here has some very complex tax neutral asset protection structures that could meet your needs.

Good luck with your search for the holy grail -- the offshore credit card.