Eternity Law International News Transfer funds to offshore accounts or tax planning

Transfer funds to offshore accounts or tax planning

February 21, 2020


What is better: transferring funds to offshore accounts or tax planning? Today this issue is one of the most relevant. Many countries of the world know firsthand what the global crisis is.

In this regard, the government of states that are on such a negative list is thinking about additional options for replenishing the treasury. Alternatively, entrepreneurs enter the “special attention zone”.

The United States Government is also concerned about the current economic situation in the world. In this regard, a number of laws have been passed by which services in other countries are required to report on the capital flows of American citizens.

The mechanism of action of laws is quite tough. In case of violation, fines and financial restrictions apply.

If you look in detail, then the law adopted in the USA controls the activities of both the country’s banks and foreign financial institutions. The management of international banks should periodically provide reports on deposit and withdrawal of funds from accounts.

And this despite the fact that legally such a decision is illegal, because no one can demand a report from banks whose activities are carried out in the territory of another state. But, the American law clearly states that its violation entails the accrual of penalties.

Their nature and size depend on many factors. The closest to this is the closure of a financial institution.

The pattern is extremely simple and understandable. The greater the state pressure on financial institutions, the more attractive the decision to “hide” their money in closed foreign accounts.

You do not need to have a special forecasting talent to understand that none of the entrepreneurs wants to give their money to the state.

Moreover, today it is relatively simple to transfer funds to offshore. Despite all the negative information (some of which is not true), the number of offshore accounts is steadily increasing.

Is it possible to influence such a negative development of events? Yes. There are several options for resolving such an important and necessary issue.


In fairness, it is worth noting that today many countries are trying to deal with offshore companies in this way. That’s just, while they impose their vision of the issue of taxation to other countries. Moreover, this is not just an imposition, but real pressure.

Refusal to participate in international programs in this case can be fraught with serious consequences for other countries. For example, we are talking about limiting financial assistance and the like.

Again, the United States is a good example. Forty years ago, the law on liability for receiving and giving a “bribe” was passed. In reality, this document began to operate relatively recently.

The thing is that any person should be punished, regardless of his citizenship, which the official is trying to bribe. If guilt is proved, then the offender faces a fine. Moreover, this is the most “loyal” punishment. For giving “bribes” in especially large amounts, they can be sent to prison.

Currently, the number of pending corruption cases in US courts has increased significantly. The reason is the work of the above law.


If the country will be loyal to entrepreneurs at any level (including in relation to taxation of profits), then the need to “hide” their income will disappear by itself.

An additional advantage of this solution will be the inflow of foreign capital. Which, again, has a positive effect on the economic condition of the country.

Currently, this approach to resolving the issue is popular among many countries. Economic zones are created (loyal rules apply in a certain territory of the state) that promote business development.

England, Austria, Switzerland and other European states went along such a path.

The creation of economic zones does not exclude the action of offshore companies. Practice shows that at present, there is a kind of competition between preferential tax proposals of different countries.

For additional attraction of entrepreneurs, offshore countries “plus” offer attractive conditions. For example, citizenship for the co-founders of the company.

Do not forget that practical and far-sighted businessmen will try by all legal means to reduce the amount of tax obligations.

New times require new, more complex, solutions. If earlier, in order to hide their income, it was enough to have one foreign account, but now they need several. Moreover, as a rule, we are talking about different countries.

Many European countries offer affordable tax rates. For example, in Bulgaria and Hungary, the profit rate does not exceed 15%. Cypriots offer the same conditions.

But Georgian entrepreneurs do not need to pay tax on their income. The only condition is not to “distribute” dividends.

Our company is based on experience with this sphere and Eternity Law International specialists will be happy to рrovide you with assistance in resolving this issue.

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