The Las Vegas Indicator

Perhaps there is no better gauge of the current health of the US Economy than the “Las Vegas Indicator” (just made that up). Think about it – during boom or bust – this gaming oasis is likely to be the first in line to represent!! Things are still very dark according to the article published in today’s Wall Street Journal. “Wynn Resorts Chief Executive Steve Wynn said he sees an uncertain environment in Las Vegas as visitors are cutting back on spending …. the landscape in Las Vegas is troubling ... It's rife with uncertainty." Check out the Wall Street Journal on line for the entire story.

More Offshore Jurisdictions join the OECD's "white list"

The British Virgin Islands and the Cayman Islands have joined the global "white list" of countries using internationally recognized tax standards, the Organization for Economic Cooperation and Development said on Friday. Since April, more than 6 offshore jurisdictions have joined this list showing signs that positive changes are taking place in the international tax arena.

To read this article in full, go to http://www.caribbeannetnews.com/breaknews-18220--30-30---breaknews.html

Now Offering Irish Trust Companies

The Rich History of Ireland captured in a Financial Institution
The island of Ireland, said to be discovered around 6,000 BC, possesses one of the richest cultural heritages in all of Europe. Spanning more than 32,000 square miles, Ireland offers residents a highly prosperous economy, ranking in the top 10 on the continent based on income per capita. A truly competitive landscape for inhabitants of Ireland, many natives and foreigners have laid claim to Ireland to accomplish their business or personal endeavors.

While those who still inhabit the country reap the full traditions of this cultural mecca, there are others who have moved elsewhere but still possess strong ties to their Irish heritage. It is estimated that some 36 million American citizens claim Irish heritage, nearly 12% of the total U.S. population. For many of these individuals, who have moved away there is a strong desire to maintain and perhaps expand their affiliation with their homeland.

Worldwide Business Consultants is proud to now offer acquisitions of Irish Trust Companies, a recent addition to our extensive list of products available. For those business owners familiar with Ireland, the country is a welcome jurisdiction with which to conduct business. Similar to a Swiss Trust Company, an Irish Trust Company is a Non-Banking Financial Institution located in Ireland and authorized to provide a variety of benefits to its owners. Just a few benefits include enhanced privacy and asset protection, international financial management and the ability to issue financial instruments.

Irish financial companies are generally established to supply credit based on their ability to raise capital from public sources. Trust companies in Ireland are generally established to provide personal wealth management services to a family or small corporation. Based on our success with trust companies internationally, WBC has established relationships with financial professionals in Ireland to develop a hybrid form of trust company which maintains the functions of the finance company with the privacy and wealth management capabilities of a trust company.

Why You Should Rethink “Discount” Purchases in a Recession

Luxury items have existed since people initially left the hunter-gatherer lifestyle and headed for cities. During the Industrial Revolution of the 18th and early 19th centuries, consumer product luxury “brands” arrived in stores and homes. By Galbraith’s first look at “The Affluent Society” in 1958, the concept that “money was no object” when looking for luxury was ingrained in both modern, Westernized cultures and more remote villages alike. So why do we buy luxury? And what does this have to do with offshore financial services?

When you ask someone wearing a Gucci suit why he chooses Gucci over, say, Brooks Brothers, still a great brand, he will have a number of answers. Among these may be quality of the craftsmanship, the fabrics, or simply just for the label. According to a joint study from Nielson and Forbes in 2008, Gucci tops the list of the most desirable luxury clothing brands. Close behind, Chanel and Calvin Klein tied for second. Gucci started as a fine leather crafting company, but today the brand is more famous for its logo than its leather. We pay for this logo for both reasons. First, when we buy Gucci, we expect it to be a piece that will last for years to come. Second, when we buy Gucci, we want immediate recognition and prestige for our ability to purchase this fine luxury good.

Even as the global recession takes nearly 33% off the average monthly luxury auto sales, Audi’s A4 and Infinity’s G Sedan continue to top the list of luxury autos and outsell many less-glamorous brands. Luxury cars such as the Acura brand vehicles are often built in the same factories from the same parts as their cousins the Honda brand vehicles. But we still pay a premium for Acura. We need 4 doors, a high safety rating, a high trade in value, and good horsepower. Honda will give us this. We want refrigerated center consoles, appealing designs, and a car that says, “I have arrived.” Acura gives us this.

The same goes for offshore companies. You likely have a list of needs such as the ability to hold assets, protection through Bearer Shares and the ability to make loans and trades. Forming a brand new offshore corporation will provide for these needs. You also have a list of wants. This may include immediate access to top ten banks for correspondent relationships, a standing commercial history, a prestigious jurisdiction and SWIFT access. This is where the luxury brand of offshore companies comes into play. Older, established institutions in Europe are the Gucci of the offshore world. Their younger siblings, the Hondas, are newly formed European trusts or banks, and their distant cousins, the used Sions, are Caribbean IBC’s.

Recently, just like top auto dealers, we have seen a reduced market want for the “luxury” company - the aged, established financial institution. We have seen a greater need for a simple, no-hassle structure that will meet basic requirements. We are happy to provide for either need. However, there is one thing to remember when you purchase a company without everything you want. When the market turns, and your cash flow increases, you still have that lesser, utilitarian company. You are driving the Honda when you really want the Acura. This is your decision, and you will likely get a better deal because of it. However, if you ultimately know you will desire added prestige and increased performance, think twice before going for the bargain.

Written by Bethany Henderson, Senior Business Consultant at WBC Inc.

Swiss Plan to Block Any Order on UBS Data

From the Wall Street Journal, July 9, 2009

"Switzerland makes it perfectly clear that Swiss law prohibits UBS from complying with a possible order by the court in Miami to hand over the client information," the Swiss Justice Ministry said Wednesday. "On the basis of the Federal Council's landmark decision, UBS will by no means be in a position to comply with such an order." The Finance Ministry said "all the necessary measures should be taken to prevent UBS from handing over the information on the 52,000 account holders. Swiss Finance Minister Hans-Rudolf Merz said Tuesday that a settlement was possible and suggested that UBS could pay the tax liabilities of its U.S. customers who allegedly evaded taxes in the U.S. with its help."

To read this article in full, click on the title above.

International Banking Legislation

The term “offshore bank” makes most people think of the Cayman Islands, Panama or another remote Caribbean jurisdiction, where regulation is low and criminality runs rampant. This was true throughout most of the 60’s and 70’s, and continued slightly into the 1980’s. However, the growing global market and ease of international communication has lead to great changes in the sovereignty each nation has to allow unregulated banking. Namely, it is not truly possible.

The change has largely been the result of several international bodies that have arisen for self-regulation of the global banking market. None of these organizations is mandatory, and neither is cooperation with them. As we have recently seen in the case of the G20’s pressure on Switzerland to change regulation regarding tax evasion, though, the full force of one of the major international bodies threatening to “black list” a nation is enough to inspire change. The G20, Organization for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF, and its counterpart CFATF), are not able to create universal standard for acceptable bank licensing and money transfer practices.

The central bank of each nation, or similar financial authority in the absence of a central bank, is responsible for creating legislation sufficient for international standards. The benefits of the Internet allow anyone to access and review this information to learn about the requirements each jurisdiction has set for acquiring a bank license. For example, eight nations in the Eastern Caribbean have joined together to form the Eastern Caribbean Central Bank (ECCB). Between 2005 and 2009, Antigua & Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines have adopted one common legislative body to oversee their financial institutions. This type of cooperation is common among small nations without the large infrastructure to validate an independent central bank.

Taking a quick look at the ECCB’s regulation you will find exact requirements to obtain a bank license in these states. Much of the legislation is precise legal language for your offshore consultant or lawyer to advise you on. As an individual looking to acquire an international bank charter, there are a few key pieces of information you can take a glimpse at to determine basic parameters:

1. Application requirements: This section will show you the type of documentation you will need, the process you will follow, and who will be making the judgment about granting your license. For example, in the case of the ECCB, the Minister of the Bank grants all licenses after a review process.
2. Director requirements: This section will inform you how many directors you need and the type of experience they will be required to have. For some nations, you will need banking experience. In the case of the ECCB, you will need a statement from the jurisdiction you are looking to establish you bank in that they have no objection to you or this activity.
3. Approved language: There are many terms that may be used by a corporation that is not a bank. There are others, however, that are restricted in each location. You will need to be a certified financial institution in to use the terms “bank,” “financial institution,” “savings,” or “loan” according to the ECCB.
4. Paid-in Capital: All banks and most financial institutions will require you to keep funds on reserve. The amount will vary depending on the type of institution. For example, the ECCB sets a minimum of $1M USD share capital for financial institutions and $5M USD share capital for banks.

This is just a sample of the regulation that will affect a bank charter in any independent nation. Most financial regulation is from 50 to 100 pages in length, and you will need to comply with all of it to secure a license. Using an offshore professional who has been through the process and has contacts in your jurisdiction of choice will expedite your application. Newly formed banks afford their owners the ability to raise capital, preserve private wealth and take greater control of their fiscal livelihood. To capture these benefits, you will have to go through a legal process, but the process will be well worth it for the right individual.

Written by: Bethany Henderson, Senior Consultant at Worldwide Business Consultants

Banking "The Old School Way”

An interesting article recently appeared in Fortune Magazine giving readers an in-depth look at former politician and banker, Peter Fitzgerald. In 2004, Peter Fitzgerald set out to open a bank that would showcase the fiscally conservative principles of banking “the old school way.” Chain Bridge Bank opened in 2007 with startup costs of $18.5 million backed mostly by Fitzgerald himself and his investors. Since its opening, the bank has been well received by investors fleeing from larger and weaker banks, by September 2008, Chain Bridge Bank had deposits of $123 million.

The article continues on stating, “Launching a bank in this economy may sound insane, but star bank analyst Meredith Whitney has been saying since last year that the timing couldn’t be better. First, a new bank starts out with a nontoxic balance sheet. Second, its earnings are juiced by a steep yield curve that allows for a healthy spread between the interest the new bank is paying depositors and the rate its earning on its loans. And best of all, it is competing with established banks that don’t want to lend – they’re focused more on plugging leaks in their balance sheets than on making new loans.”