Cash Flow In And Out Of The United States Products US Residents Beware of Dangerous Offshore Products and Banking

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US Residents Beware of Dangerous Offshore Products and Banking

From the very beginning — this is my territory. I know the legalities and practicalities of the offshore world better than all but maybe 500 professionals in the world. If you don’t know any of these people (and none of them are on the internet trying to sell you something), please listen to me with both ears.

  1. I know many US residents want to shift their banking and their portfolios to other countries. I don’t blame them.
  2. I know many US residents are tired of the tax system and are looking for relief.
  3. I know many US residents know a thing or two about “offshore”, especially with the bombardment of tempting banking offers in Belize, Panama or “other jurisdictions”.

I’ll tell you the truth.

It is almost impossible for a US resident/citizen to legally opt out of the US tax system. It IS impossible for a US citizen to open a bank account they control with more than $10,000 CUMULATIVE ANYWHERE IN THE WORLD without reporting it on their regular tax return and a special data entry that makes you actually list the banks and account numbers. Unless the bank is in the US

There are a few ways to all of this. I have never mentioned any of these methods on the internet and my email is flooded with offers.

  1. It is almost impossible to get a bank account abroad without presenting a utility bill. If the utility bill is from the US, then why bother?
  2. There is no point in buying offshore companies (IBCs) unless you can get a bank account that YOU DON’T NEED TO REPORT TO THE IRS.
  3. This immediately limits your total non-US deposits to less than $10,000. So why try?
  4. Managing an offshore bank account from the US isn’t just stupid, it’s a death wish. If you don’t watch the news, these government guys are very, very serious about hunting down people like you and making an example of you.

Rule: Panama foundations are stupid. First: if you get a bank account for it, you’re screwed. Second: If you let someone else open an account for you, you’re screwed.

Rule: Don’t trust anyone with your money unless you can trust them with your life. Even in the US, the days of trust are OVER! For example, if you don’t have family in Panama that you trust, then you don’t know anyone that you can trust in Panama. Panama is synonymous with anywhere. You can’t trust banks or lawyers. Dot. There are no exceptions.

Rule of thumb: If you want to diversify your portfolio into a foreign location, then GO THERE and check it out. I’m not a fan of American banking, but I have to tell you that once you’re in these places, you wouldn’t want to change a $20 bill at the local bank, let alone leave your money there. You visit a few restaurants and grocery stores and watch them hold up every bill you give them to the light to check if it’s fake. What does that tell you?


  • Find an HSBC bank near you in the US Open an account. Nothing to report.
  • When abroad, find another HSBC bank. Present the bona fides of your US HSBC banking and your account will be opened smoothly. Do not deposit more than $10,000 into the account. HSBC is synonymous with any solvent foreign bank with a branch on American soil. Most advisors say never do this. They’re right. However, since it is very difficult as a US citizen to get a bank account abroad without a reference letter from your US bank, I disagree with the experts. Open a bank account at a local branch of a foreign bank and then open a real account with your US pound credentials. It’s not hide-and-seek perfect, but it’s not much anymore.
  • If you have real wealth, but not enough to want to spend $50,000 on real international lawyers, start reading about “dynasty trusts” and check out Nevada as a jurisdiction. These are bulletproof US entities that can survive a government or creditor challenge or your death much better than an offshore trust.
  • If you are serious, become a RESIDENT somewhere else. Not a citizen. Resident. Much easier and doesn’t cost a million dollars for an economy passport. Once you become a resident, you can use the appropriate ID to open bank accounts in your new country of residence that are not linked to your US documents. Is there still a reporting requirement if you reach the limit? yes
  • If you are so inclined, you should research the “territorial tax” or “no tax” jurisdictions for your residence. Check if your dream wish list is comparable to countries that have tax benefits.
  • If you’re keen, then buy a bargain flat somewhere you wouldn’t actually mind and then rent it out. If you can get a mortgage on it, great. But foreign lenders usually want 50% down. Make it a cheap apartment. The apartment brings you a utility bill, which you need to open a bank account. But once you’re “there,” sometimes requests for utility bills disappear because your official address is on your ID. By the way – YOU CAN USE YOUR IRA FUNDS to buy foreign real estate. If you’re nervous about the state of the US, clean out your IRA and buy foreign real estate. Do I need to tell you that diligence is very, very important. Don’t buy anything that isn’t a place you might need to live. You may have to.
  • If you can’t afford cheap foreign housing, then rethink the whole international thing and go buy some gold coins or precious metals before you have to register it.
  • If you are a bona fide resident of a foreign country, there is a large exemption from US taxable income. Take it. This will save you a bunch.
  • Don’t get too cute about encryption and secrecy. You hide in plain sight.
  • For God’s sake, if you’re not a billionaire, don’t renounce your US citizenship. Just get out if you don’t want to stay. Times are changing. It’s a good passport, and with a tax exemption, you’ll rarely pay more tax in the US.
  • Learn how to make money with a portable trade or profession before you move out of the US. You take your cash flow with you. And remember the $10,000 bank limit? This is the money you have IN YOUR BANK ACCOUNT. Not the money you earn and then take out of the bank and keep at home or in a vault. Remember that you declared it even though you didn’t pay tax on it. This is legal.


  • There is absolutely no way you can open a bank account for a BUSINESS you own and deposit more than $10,000 into it and not report it, even if you don’t sign on to the bank account. Failure to report is a serious crime and prima facie tax evasion. You will undoubtedly also be accused of money laundering.
  • If you actually sign on to a company account, even if you’re a minority shareholder, and there’s more than $10,000 in it and you don’t report it to the US, that’s also a crime and prima facie tax evasion. And money laundering.
  • If you file a US tax return and don’t report foreign earnings? More problems.
  • If you set up a trust but indirectly control it, it’s a crime to not report it annually via a very nasty IRS return that’s about 40 pages long.
  • If you set up a trust with real money in it – in an offshore jurisdiction – but you don’t control it, you’re a fool. I hope you can see that the anvil is ready.
  • There are administrators you can trust. You don’t know any, or you wouldn’t be reading this.


  • Many decent sounding banks have low entry requirements. They don’t dig too deep before they “accept” your deposits. Good online service. Encryption. Privacy. Multi-currency accounts. Your confidence is growing. You move more funds there. Maybe you’ve decided to play tax games and don’t report exactly all of your money on a state’s tax return. Your balance is building. One fine day it reaches, say, $100,000.00 and you decide to withdraw $25,000.00. Suddenly your account is frozen by the “compliance” section. They’ll want to see a copy of your passport again, your utility bill again (oh, did you leave out that rental apartment?), they’ll want a statement and proof of source of funds and, yes, they might even want to see a tax return. Folks, I’m not talking about some mud bank in Belize. I’m talking about a good Swiss bank. And the owner is not an American citizen. And a year for the matter to be resolved.


These are difficult and dangerous times. Everyone wants your money – which very quickly equates to a large part of your life. Your country. Other countries. Banks. State agencies. Regional tax authorities. State or provincial governments. Sales tax authorities. To this list of “official” pirates we now add pirates in the sea who want to sell you legal useless stuff.

Keep your money where your mouth is. If you want diversification, actually go somewhere and do something. Like go explore the options and then get out. If you don’t have that much money and are still scared, join a club. And keep money hidden in your home and/or buy some silver and gold.

There are NO third party investment opportunities. If you don’t watch your money, it will disappear. Don’t lend. All loans are bad loans. Invest in yourself and those around you.

The real bad times haven’t even started yet. This is the eye of the storm at best.

Author: Jack Campitelli, JD has lived and worked in many tax-advantaged foreign countries. He has taught asset protection inside and outside the US. He knows most of the people in the business. His website is His recommended books de jour are “Portable Trades and Occupations” and “Bye Bye Big Brother” available at ascolibooks com. If you want to start an internet business as a mobile store, consider his Legal Guide to Websites

Jack absolutely is no available for “offshore” consulting!

Copyright 2010 RioneX IP Group LLC. All rights reserved. This material may be freely copied and distributed, provided that this copyright notice is included, the author information and all hyperlinks remain intact.

by Jack Campitelli, JD

September 10, 2010

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