Robots, Art, Offshore Finance, and Life 


Tricks of sophisticated privacy seekers .....

​Sophisticated privacy seekers use everyday business transactions to transfer money offshore in private. Why? International commerce offers a wide range of unintended privacy opportunities. Take a closer look.

There has been a noticeable development in the activities of commercial intermediaries via a completely new class of clients -- those seeking to transfer funds in silence.

Transfer-pricing privacy

Transfer pricing companies, factors, collection agents, import/export agents and many other types of international businesses not only exhibit established trading histories, but also a nature of business that by definition results in a continuous pattern of high-volume, high amount and often rapid incoming/outgoing payments. The outward and ostensible appearance makes such companies ideal and discreet vehicles through which to direct international funds transfers in order to gain a privacy advantage.

For example, it is now the case that clients can purchase financial privacy for a set fee and no longer solely on a percentage basis. Some transfer-pricing agents have even begun to offer the possibility of receiving client remittances in one jurisdiction, and subsequently making the onward transfer from another entity in a separate jurisdiction altogether. A number of other tactical strategies are being deployed to answer the specific needs of the privacy market.

Outside of what is sometimes termed as "transfer-pricing privacy", many individuals are choosing to use low-risk foreign exchange trades (and even certain derivative and arbitrage trades) for the purpose of placing their funds offshore. A money transfer structured via an appropriately selected brokerage house again allows the regaining of a rudimentary level of financial privacy.

Self-owned intermediary entities

A bolder strategy used by some is to form their own intermediary corporation(s), particularly where the size and/or frequency of the intended transactions warrants the extra cost and administration involved. Some go as far as to obtain a class B bank or an insurer, specifically for the purpose of effecting confidential asset transfers.

Whatever form a self-owned intermediary takes, strict attention must be paid to its structure, ownership, domicile and management if any privacy benefits are to be derived from it. 

Corporate agents as a privacy tool

So-called corporate agents also deserve a mention in the context of confidential money transfer strategies. Corporate agents typically take the form of a client-owned onshore corporation that acts as an add-on "front-end", or admin and clearing centre, for the client's primary offshore corporation.

Depending on the beneficial owner's domicile, a corporate agent might be incorporated in say Great Britain or New Zealand solely for the purpose of representing the client's offshore company in return for a small commission.

The concept of corporate agents originally developed in order to provide a more direct access to particular geographical markets, and/or to engage in those trading activities where the direct use of an offshore corporation would be inappropriate. In its simplest form, these arrangements enable a business to operate from a prestigious and convenient onshore location, yet under a near-offshore tax regime -- only the commissions of the corporate agent are taxed onshore, with the majority of the profits accumulating offshore.

Aged companies and SPV's?
These structures have become so widespread and popular that instant, ready-to-trade and often "aged" (established) corporate agents are available for purchase in a variety of jurisdictions via specialised professionals. As an SPV (special-purpose vehicle) whose existence and functioning is well understood within the financial community, they ironically avoid many of the banking problems that other corporations might encounter.

While it was not their original purpose, it is easy enough to see why many now choose to employ such vehicles to help to void the trail connecting their onshore and offshore holdings.​

Robots, Art, Offshore Finance, Life - Offshore due dilligence; page 7 of 8
"Offshore Finance" safe harbour

Offshore - Due Diligence (Page 7 of 8)