Offshore Investing in the Bahamas: Is It Coming to an End?
A Washington DC tax attorney provides help to taxpayers who are invested offshore and who are concerned about the ongoing crackdown that has affected many foreign financial institutions.
The Swiss banking industry has gone through major changes in light of the U.S governments aggressively going after Swiss banks for facilitating tax evasion, and many banks participated in the Swiss Bank program in which they provided U.S. tax authorities with information about accountholders in exchange for avoiding prosecution.
It is not only Swiss banks being affected either: A recent article in the Tribune suggests that the Bahamas may no longer be an offshore financial center in the future.
The Bahamas Will No Longer Be an Offshore Financial Center
According to the Tribune, the Bahamas has long been a mecca for people interested in investing funds offshore. The foreign banking industry has been one of the major drivers of the economy in the Bahamas as numerous banks established a physical presence locally. This, in turn, created jobs for people within the Bahamas and lessened the economic importance of the tourism industry.
Now, however, the global crackdown on tax evasion is compromising the Bahamas' ability to cater to foreign clients and the Tribune indicates there is reason to believe the Bahamas will not be able to continue serving as a foreign financial center. This will mean the economy once again becomes more dependent upon tourism.
The problem comes from numerous foreign authorities that have begun imposing new rules, regulations, and requirements. These foreign authorities include the Organization for Economic Cooperation and Development (OECD), the European Union, the International Monetary Fund body, and the Financial Action Tax Force (FATF). Together, these authorities have been working with countries across the globe to try to ensure that no taxpayers are able to hide their wealth offshore without their governments knowing about it.
While the general crackdown on offshore banking is a problem for the financial institutes in the Bahamas, the bigger issue is that the Bahamas has been “blacklisted.” According to the Tribune, the government of the Bahamas was shocked by the blacklisting and is trying to work with the OECD and European Union in order to be removed from the blacklist. However, some of the demands that are being placed on the Bahamas would mean fundamental changes, including disclosing names of beneficial owners of offshore structures or altering the rules for corporate income taxes.
If these changes are made, the Bahamas would no longer be able to operate its offshore financial industry under the same rules, and it would likely no longer be attractive for individuals and businesses to invest in financial institutions within the Bahamas. The Bahamas has essentially been put into a difficult position where the blacklist is having an adverse impact and where any changes that are made would also have an adverse impact on its financial industry as well.
If the Bahamas is no longer a viable location for offshore investors, this is just one more place where it will become difficult or impossible to invest outside of the U.S. Washington DC tax attorney Kevin Thorn can provide insight to investors into what any changes might mean for them.