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Seychelles is an offshore magnet for money launderers and tax dodgers
- kazinator 12y agoCough ... "She sells shelters to tax shills by the Seychelles sea shore." :)
- tferraz 12y agowhat is the new news here?
- dang 12y agoMost interesting things aren't new.
- benologist 12y agoDoes this whole thing depend on countries not publishing their registered companies online? And becomes immediately transparent when they do?
- fred_durst 12y agoIts generally a collection of companies in various countries. They take advantage of the fact that each country has unique laws. By stringing them together you can eventually make it impossible to track to it's original source. It's kind of like one way encryption in a really stretched analogy.
- benologist 12y agoIt seems like you could just fly around obtaining or suing for the information, so it's not really impossible it's just too expensive because the data's not online yet?
- fred_durst 12y agoI'm not quite sure about that. From my understanding you can do it in a way where eventually you lose the trail. Because of the legalities of what information each country shares, if you get it in the right order you can prevent it from leading all the way back.
- BorisMelnik 12y agoI would say yes to this. If the case is big enough, like the someone assassinated the leader of a large country they could pull enough strings or threaten to embargo etc.
- bsder 12y agoObviously, with enough resources the information can be extracted. The US or Russia clearly have enough resources to either dig through technically or simply threaten to murder those who don't cooperate. However, the real issue is that very powerful people are using these techniques. So, governments have to worry that they're going to accidentally trip over somebody who is powerful enough to cause problems. If you are a bureaucrat examining what you think are low-level offenders but accidentally stumble onto something held by Vladimir Putin, you're going to bury that post haste so as not to endanger your life.
- 67726e 12y ago> The US or Russia clearly have enough resources to either dig through technically or simply threaten to murder those who don't cooperate. A government is not going to threaten to murder folks for not turning over some financials. I think you've been reading too much Tom Clancy.
- puddinghead 12y ago
- BorisMelnik 12y agoIt mainly depends on a lack of cooperation between nations. I register a company in small country A. As a representative of that company, I open up another company in another country, preferably one that will not extradite and has a history of a lack of cooperation in criminal and civil cases. They then use that company to open up another company in Seychelles which in and of itself according to this post is a known place to siphon funds through a corporation.
- superuser2 12y agoIf you're the government of one of these island tax shelters with basically no economy outside of banking, you understand that the party will stop the moment wealthy people stop perceiving your banks as safe from the US government. That would be the end of your country's prosperity and your own. In depends on the fact that if US investigators come calling, all the government will tell them is "fuck off."
- contingencies 12y agoVery informative. Another tax haven many people are unaware of is the City of London. George Monbiot puts it this way: The Corporation of the City of London is the dark heart of Britain, the place where democracy goes to die, immensely powerful, equally unaccountable. (See http://www.monbiot.com/2011/10/31/wealth-destroyers/ http://www.monbiot.com/2011/10/31/wealth-destroyers/ and http://www.newstatesman.com/economy/2011/02/london-corporation-city http://www.newstatesman.com/economy/2011/02/london-corporati... )
- mseebach 12y agoThat's probably because the City of London isn't in any meaningful way whatsoever a "tax haven". Fretting over the utter archaicness of the corporation, the power of the financial lobby and the connection of actual tax havens to the city doesn't make it a tax haven. Notice how the Monbiot piece is silly with irrelevant footnotes (in case you're worried he's pulling your finger on the date of the Lord Mayors parade, don't worry, it's carefully sourced) - except the bit where he makes his central assertions? Here's the relevant test: Does incorporating inside the jurisdiction of the City of London change your tax liability compared with incorporating anywhere else in London, in any way whatsoever (except business rates, which are actually slightly higher in the city)?
- samstave 12y agoThere is a LOT more that can be said about the Company of London (and the its incorporated subsidiary, the Federal US Government)
- hackerboos 12y agoI did research on incorporating offshore when I was planning on becoming a travelling freelancer. The Seychelles came up as one of the easiest and cheapest places to incorporate. Very little regulation.
- mynegation 12y agoCan you recommend any good resources that you found during your research?
- nandreev 12y agoThis guy has a blog with some useful articles that could get you started: http://flagtheory.com/bvi-company-formation/ http://flagtheory.com/bvi-company-formation/ There are some upsells, but the articles suffice as an introduction to offshore company formation and offshore banking.
- puddinghead 12y agoMany clients will not want to pay your freelancing invoice coming from a Seychelles corporation. Payments to offshore tax heavens are red flags for regulators and tax authorities and your clients will not want that risk.
- hackerboos 12y agoInvoicing isn't the issue - trying to get a bank account in the name of a company in the Seychelles is very difficult. I was told that people use Seychelles corporations as holding companies and then incorporate in a more reputable jurisdiction such as Hong Kong.
- hackerboos 12y agoLee Hadnum's books gave me a good foundation: www.UKtaxclub.co.uk Use a reputable incorporator like Ocra. Cheaper companies will take your money and not actually form the company.
- trentnelson 12y ago
- nodata 12y agoYeah okay, but how does the amount of lost tax revenue here compare to lost corporate tax revenue?
- michaelochurch 12y agoRight now, the hot commodity for corrupt officials, criminal billionaires, and money launderers (domestic and foreign) is real estate in the U.S. (and in Canada, esp. Vancouver). The U.K. is having the same problem. Even if this seems like a small percentage of purchases (but it's not; in London, foreigners laundering money make up about 75% of the purchases) it combines with price inelasticity to make prices go through the roof: several times what they would be otherwise. Take China as an example (mostly, just because it's a very large country) where corruption is a death-penalty charge. If things turn against you, you're going to need not only a new identity (for your entire family) but possibly a new face (not exaggerating). The West Coast has some of the best plastic surgeons, but it also has expensive houses (which you can borrow against) and tech companies (where non-technical executive positions involve zero responsibility and make great sinecures). The sort of high-level makeover process these guys involves buying a career (including fake references) and being inserted in an executive sinecure somewhere, but that takes about 3 years, so you need 3 years' worth of cash before you can start earning on your own again. With most assets frozen and the previous identity gone, the house (delivered through a shell company to the new identity) is the only reliable store of wealth. Silicon Valley is attractive to the world's criminals because it's the one place where you can have $4 million of "wealth" tied up in a house and not raise an eyebrow.
- Cyther606 12y ago> The buyer, an Italian, was in town for a week, with a million or so dollars to spend. We met one Sunday morning at 20 Pine, a Financial District condo building. She wore a red scarf, jangly jewelry, and a pair of lime-green sunglasses perched atop her curly hair, and she told me she would prefer to remain anonymous. Working through a shell company, she was looking to anchor some of her wealth in an advantageous port: New York City. Article is a fascinating read: http://nymag.com/news/features/foreigners-hiding-money-new-york-real-estate-2014-6/ http://nymag.com/news/features/foreigners-hiding-money-new-y...
- clamprecht 12y agoWhat you say is extremely interesting. But I have to ask, do you have a source for any of it? Where can I read more about it?
- dan_bk 12y agoYou don't even need to go as far as the Seychelles to dodge taxes - there's the inter-state tax dodging version called "Delaware" (although the incentive is a bit weaker).
- jacques_chester 12y agoI'm descended from a Seychellois family on my mother's side (hence my French name). It's a rotten paradise, sadly.