The Aspen Post
Suite 2302-3 Pacific Plaza 410 Des Voeux Road West Hong Kong
E-mail: [email protected] www.aspenoffshore.com
Hong Kong
November 2009
We don’t want to bore you with a long newsletter.
In This Issue
• Season of change
• Panama celebrates in November
• Luxembourg-Austria veto
• Other Tax Friendly Homes
Our Services
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International Tax Planning
Company Formation
Professional Directorships
Company Management & Secretarial
Services
International Bank Accounts
Brokerage Accounts
Prepaid Debit cards (Visa Electron)
Merchant Accounts
Second Passports
Seminars
Website hosting
Our Favorite Jurisdictions
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HONG KONG
PANAMA
BELIZE
SEYCHELLES
BARBADOS
BRITISH VIRGIN ISLANDS
LUXEMBOURG
BELGIUM
SWITZERLAND
WYOMING
NEW YORK
CAYMAN ISLANDS
Contact Us
E-mail: [email protected]
Season of Change
The first three days of
November
have
brought cooler winds
and fresh air to Hong
Kong. The skies are
slowly turning pearly
grey; HK office ladies
are back to their high
top boots, turtlenecks;
and the gentlemen are
wearing even darker
Outside our window at 410 Des Voeux Road
West, in Hong Kong. Across the harbor, the
suits.
It seems
Kwun Tong container terminal.
clothing defines the
seasons here in Hong Kong and not the thermometer but we are
enjoying an average 20-21°C.
It could just be we’re catching a bit of a draft from China. Earlier than
ever before, the government in Beijing made it snow on Saturday and
Sunday. Local government workers fired 186 doses of silver iodide
into the air to prompt precipitation, causing extra 16m cubic meters of
snow to fall on the city. The extra snowfall will aid the growth of crops
because the temperature will
rise very soon, benefiting
farming. The melted water will
help with the winter irrigation
needed in agricultural fields.
And with a boom the seasons
changed.
Many have renewed their
interest in changing their tax
residence and even finding a
new place to call home. In this
issue we’ll take a look at 2
Island Hoping in Pulau Singa Besar,
interesting
places
both
Langkawi, Malaysia.
corporate or individuals can
call home to save on income
and other types of taxes. We take a quick look at Malaysia and the
beefy incentives offered by Switzerland.
This month finds our people in Prague, Singapore, and China.
Our Offices
Panama Celebrates in November
You have to allow me to talk again about
Panama. It is after all, my motherland.
Panama celebrates in November its most
important national holidays. Expect delays
on all business conducted from Panama
during the month of November:
Hong Kong
Suite 2302-3 Pacific Plaza
410 Des Voeux Road West
Hong Kong, S.A.R.
Tel: (852) 3175 8758
Fax: (852) 3175 8456
E-mail: [email protected]
Panama
Aspen Legal Services
Local 11-12 Causeway Blvd. Commercial Ctr.
Isla Perico, Panamá City
Republic of Panamá
Tel: (507) 314 3392
E-mail: [email protected]
Prague
Opletalova 1603/57
110 00 Praha 1
Česká republika
Tel: (420) 221 419 747
E-mail: [email protected]
Luxembourg
62, Avenue de la Liberté
L-1930 Luxembourg
November 2:
November 3:
November 4:
November 5:
All Souls Day
Independence from Colombia
Flag Day
Independence from Colombia in Colon (the Colon Free
Zone is closed)
November 10: Announcement of Independence
November 28: Independence from Spain
Quick facts about Panama
Total Population: 3,360,474 (est. 2009)
Capital
Panama City; 930,000
Area
75,517 square kilometers
(29,157 square miles)
Language
Spanish, English
Religion
Currency
Roman Catholic, Protestant
Balboa, US dollar
Life Expectancy 74 (All my elders have exceeded this expectancy!)
GDP per Capita
U.S. $6,200
Literacy Percent 93
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Favorite Quotes
“A man's homeland is wherever he prospers.”
Aristophanes (450 BC - 388 BC), Plutus, 388
B.C.
“The politicians don't just want your money.
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They want your soul. They want you to be worn
down by taxes until you are dependent and
helpless. When you subsidize poverty and
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failure, you get more of both.” James Dale
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Davidson, National Taxpayers Union, U.S.A.
“The avoidance of taxes is the only intellectual
pursuit that still carries any reward.”
John Maynard Keynes (1883 - 1946).
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Panama is the southernmost country in Central America.
The official name of the country is the Republic of Panama.
Panama is the largest economy in Central America, followed by
Guatemala, Costa Rica and El Salvador. It is also the fastest
growing economy and the largest per capita consumer in Central
America.
Shares of the Panama Railroad were the highest priced stock on
the New York Stock Exchange, at $295 per share. Take a look
http://www.panarail.com/en/index.html
The Panama Rail Road was the most expensive railroad ever
built, at 8 million dollars.
Panama is home to more than 10,000 different plants species,
including 1,200 varieties of orchids, 678 ferns and more than
1,500 varieties of trees.
80 kilometers of land separates the Atlantic from the Pacific
Ocean at the narrowest point of the Isthmus.
Panama boasts 5,637 kilometers of coastline and more than 1,518
islands.
Panama is the only place in the world, where you can see the sun
rise in the Pacific and set in the Atlantic. Other Tax Friendly Homes
I recently read Forbes’ list of the 10 best retirement
havens, based on a wide variety of criteria ranging from
safety to retiree-friendly visa requirements to decent
medical care and low taxation rates. The countries on the
Forbes list are: Austria, Thailand, Italy, Panama, Ireland,
Australia, France, Malaysia, Spain and Canada. I have to
agree with a few of these choices, especially, Panama,
Malaysia, and Spain; however, I dare to add Portugal,
Switzerland, and Uruguay as jurisdictions that will suit
not only the very wealthy but anyone who wishes to pay
less taxes and live well.
Corporations also look for jurisdictions with low tax
rates. Until very recently, for companies, jurisdiction
shopping was mere paperwork; a tax friendly location
where business could be based on paper and enjoy the
benefits of said tax friendly location. Larger
multinational corporations tended to stay closer to home
with their marketing and sundry services located
offshore and still making significant corporate tax
savings.
Malaysia MM2H Program
Malaysia my Second Home Program is open to all foreign citizens
wishing to retire or reside in Malaysia on a long term basis. It is fully
endorsed by the Government of Malaysia and your immediate family
(spouse and children) can also participate in the program. The key
benefits of the program:
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10-year Visit Pass and Multiple-Entry Visa (renewable every
ten years) which will eventually give you a lifetime easy
access to the country (perpetual visa).
Tax free import of vehicle or tax free purchase of a new car,
as well as other tax incentives.
You can invest and own businesses in Malaysia.
You can enjoy a luxury lifestyle at a fraction of the costs. It is
the cheapest and very affordable place to retire early.
As for individuals, aside from retiring, the most anyone
aspired to was a second passport to either facilitate
travel, avoid visa requirements, and a myriad of other
headaches world travelers faced every day. But as
governments around the world make great efforts to
battle deficits, companies and individuals are expecting
higher taxes and aggressive measures to collect them.
For many, it is time to run for the hills.
Switzerland
With the marvelous tax incentives Swiss cantons are
offering, the horrible memory of the UBS showdown is
forgotten.
McDonald’s will move its European headquarters to
Geneva, only to find that Yahoo, Nissan, Tyco
International, and Kraft Foods are already there.
While Britain, Ireland and the U.S. will increase personal
income tax rates for high earners, Switzerland does not
plan to do so. In Switzerland, each canton is free to set
its own tax rates and they are setting them low and
lower. In 2008, ten cantons reduced their tax rates to
attract investors. The cantons of Obwalden and
Appenzell Ausserrhoden both reduced their corporate
tax rate to 6%.
Swiss Tax Advantages
In addition to Obwalden and Appenzell Asserrhoden,
corporate tax rates are also attractive in Lucerne, 15.9%,
St. Gallen, 14.2%; Zug, 13.4% and Nidwalden, 12.7%.
Malaysia: A life of lush, exotic, safe, sunny luxury
You can retain your own citizenship and all privileges in your own
country. Unlike some European alternatives, Malaysia is cheap, safe,
and the landscape is extraordinarily beautiful. Its former English
colony heritage continues reflected in the most important thing of all,
communication. Almost everyone speaks English and every sign,
document, warning is in English too. Malaysia is tough on crime and
you will feel the safety all around you.
Applicants aged below 50 years are required to show proof of liquid
assets worth a minimum of RM500,000 (US$146,000 approx.) and
offshore income of RM10,000 per month (US$3,000, approximately).
Applicants aged 50 and above may comply with the financial proof of
RM350 thousand in liquid assets and off shore income of RM10
thousand per month. Retirees are required to show proof of receiving
pension from government approved funds of RM 10,000 per month.
Applicants who have purchased properties worth at least RM 1 million
qualify to place a lower fixed deposit amount upon approval.
Switzerland’s treaties network comprises 70 countries
which includes even countries that most others won’t
consider such as: Jamaica, Tajikistan, Serbia, Iran, and
Pakistan. It holds treaties in Asia with China, Thailand,
Malaysia, Japan, and Vietnam.
Swiss income tax treaties are basically designed after the
OECD model convention. Generally, Switzerland applies
the exemption with progression method; the credit
method applies to passive income (dividend, interest and
royalties).
Switzerland has made a reservation on the exchange of
information clause (Art. 26 OEDC model). Swiss tax
treaties just foresee limited exchange of information for
the purpose of applying the tax treaty (but NOT of
enforcing domestic laws). A special provision applies in
respect of the US.
This may pose a problem for U.S. companies that want to
relocate to jurisdictions without full tax treaties with the
United States.
Since 2008, the U.K. taxes foreigners living in the U.K.
over income and capital gains earned outside of Britain
or an annual $49 thousand over what they already owe
the government. From April 2010, the U.K. government
will increase its top tax rate to 51.5% for anyone citizen
or foreign resident earning more than $245 thousand
dollars per year.
Switzerland offers residency incentive programs for the
independently wealthy, retirees and investors. Once you
are a resident, there is the possibility of paying a fixed
amount of taxes every year. This amount is based on
your rental payments (or the rental value of your home),
and has no relation to your real income or wealth. You
are not required to declare neither your income nor your
assets.
The lump sum taxation arrangement is based on
Switzerland's federal law and is available in all cantons.
Switzerland is safe, clean, boasts powdered snow, great
chocolate, watches, pens, and other luxury goods. The
bankers and banks are still top of the line and have
become even more efficient and reserved. There is
virtually no traffic, and I’ve experienced a varied and
elegant cuisine. However, all that silence, that cold,
clean mountain air, hand-fed cows, environmentally
conscious people and the peace low taxation can put you
to sleep.
Applicants younger than 50 years of age must open a fixed deposit
account of RM300 thousand. After one year, the participant can
withdraw up to RM150 thousand for approved expenses relating to
house purchase, education for children in Malaysia and medical
purposes. The second and subsequent years, the applicant must
maintain a minimum balance of RM150 thousand.
If property worth RM1 million and above was purchased in Malaysia,
then the basic fixed deposit requirement of RM 150,000 is met on
condition that the property has been fully paid and ownership
documents such as grant and land title have already been issued. This
amount may not be withdrawn until the participant decides to
terminate his participation in MM2H program.
Luxembourg & Austria Veto EULiechtenstein Agreement
Austria and Luxembourg have vetoed a draft anti-fraud agreement
between the European Union and Liechtenstein fearing negative
repercussions against their own financial centers.
Both countries also blocked negotiations over similar anti-fraud
agreements between the EU and Andorra, Monaco, Switzerland, and
San Marino. The Austrian Finance Minister claimed that the proposed
agreement did not guarantee full transparency and that the
agreement omits regulations pertaining to the exchange of
information on anonymous investment vehicles; rendering
Liechtenstein with a significant advantage.
Over the past year, Austria, Luxembourg, and Belgium have
maintained traditional banking secrecy while complying with OECD
standards of international cooperation; however, any requests for
exchange of information can only come bearing specific requests. The
vetoed anti fraud agreement with Liechtenstein comprises fraud in
relation to direct and indirect taxation; it includes individuals and
corporations; and the submission of false and incomplete tax returns.
The draft agreement also includes administrative cooperation in tax
matters which may require exchange of information that may be
relevant to tax authorities. Under the parameters of the draft
agreement, the parties can requested information and seek judicial
assistance for acts that are punishable under the laws of the party
seeking the information. Information cannot be refused solely on the
premise that the information requested is held by a bank or
anonymous investment entity.
Under the terms of the EU Savings Directive, Austria, Luxembourg,
and Belgium are to forsake the existing rules once tax ambiguities end
in Liechtenstein, Switzerland, San Marino, Monaco, and Andorra, as
well as Delaware and OECD standards are fully met.