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 |  Subject: The Philippines as a Tax Haven?  Sun Aug 30, 2009 6:02 am | |
| De Facto Offshore Financial Center
But that's history. What my email correspondent S.W. suggests is that the Philippines, while not a true tax haven, is in may respects, an ideal Asian offshore tax-free base with strong financial and banking privacy laws, easy international banking connections and a plentiful supply of English-speaking talent.
S.W. says that while not a "haven" it does have laws that are not well known "and people like myself take advantage of them."
With thanks to him, here's more of what S.W. wrote:
"I'm an IT (information technology) programer with clients in the UK and Europe mainly, and a small staff here. I'm currently on a tourist visa (visa on arrival that is renewed every two months up to two years) and whilst I cannot be employed, I can run my offshore business from here quite legally, and the low cost English literate staff are a big plus.
Tax Free LivingBeach
After 6 months you are classed as a resident, but resident foreigners do not pay local taxes on foreign source income, so I legitimately pay zero tax here and as a British Citizen who hasn't lived in the UK since 1967, I pay no taxes there either.
"My companies are in the BVI and Belize with a virtual office in Hong Kong for invoicing and mail delivery. (UK / EU clients are much more comfortable with a Hong Kong address than a BVI one).
Easing International Banking
"My banking is with a corporate multicurrency account with HSBC Hong Kong that comes with one of the most secure internet banking options available today. Locally I bank with HSBC in the Philippines which is not a local incorporated subsidiary, but rather an HSBC HK main branch operating in the Philippines as a foreign bank.
"Again, whilst UK / EU clients have no issue with transferring funds to Hong Kong, some do have issues with the Philippines or the Caribbean. HK has such a massive flow of mainstream funds, for import / export, investment in China, finance etc., transfers there do not seem to attract the focus of regulators in the manner that a transfer to Belize or BVI possibly might.
Strong Financial Privacy
S.W. also told me that one of the big pluses for foreigners doing business in the Philippines is that foreign currency bank accounts are given an extremely high level of secrecy under Republic Act 6426, (The Foreign Currency Deposit Act).
This law makes bank deposits absolutely confidential; they cannot be examined by any person or government official withiut written permission of the bank account holder. The law also exempts foreign currency deposits from attachment, garnishment, or any other order.
I should note that the Philippine government, (as Switzerland and other offshore centers), recently has agreed to allow limited tax information exchange under OECD Article 26, in an effort to get off the OECD "gray list."
Pacific Choices
So there you have it -- another possible Asian offshore base for your operations to add to established offshore centers such as Hong Kong and Singapore.
To find out a lot more about the Philippines and how you might establish a base there, you can pre-order my latest (7th) edition of The Passport Book. It has a full chapter on the Philippines with contact information.
http://baumanblog.sovereignsociety.com/2009/08/the-philippines-as-a-tax-haven.html |
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