If the only reason one has for going offshore is tax avoidance we recommend strongly that one seek the assistance of qualified tax attorney and explore the myriad of opportunities available for onshore tax deferral.

Some of the biggest and best names in American industry have gone offshore. Companies like Boeing, Weyerhaeuser, Sears, Firestone, Exxon, Caterpillar, Monsanto, and most of the Fortune 1,000 companies. American Express, Citibank, Chase Manhattan, Bank of America, Security Pacific Bank, and liberally hundreds of mainstream banks know that their earnings depend upon tax-free offshore profits. Banking profits from an offshore financial center are virtually tax-free because dividends, interest and capital gains are not considered taxable income to these firms. Addressing a large audience of government regulators and bankers form forty countries, Walter H. Diamond, Editor and Economist had this to say:

"Within the past decade, the once eye-catching words "Tax Havens" have given way to the far more acceptable term of "Offshore Financial Centers." Reflecting its increasing importance in the world of international finance, the Offshore Financial Center has vastly improved the global image of the continually popular "Tax Haven." Today, the offshore financial base with $5 trillion of investment funds is a powerful necessity in the daily operations not only of financial institutions but also multinational corporations, small and medium-size companies, and executive in the legal, accounting and investment counseling professions."

"In conclusion, it is our firm conviction that offshore investment operations are here to stay and will expand rapidly in the future. In fact, we believe that the 21st Century will be known as offshore domiciles."

There are a number of very important reasons for one to consider expanding their business activities offshore, in addition to the truly significant benefits of privacy and asset protection, and the sometimes benefit of tax shelter. Motivating factors may include:

• An offshore company can invest in global securities including top performing mutual funds not available to Canadian or U.S. citizens.
• Privacy is often integral to risk planning. Offshore clients typically seek confidentiality in their affairs to protect business strategic.
• Offshore jurisdictions are typically less business invasive allowing for aggressive and unrestrained enterprise with lower overhead.
• An offshore corporation may be used to file first position liens against assets and property thereby closing the "apparent" window of vulnerability to predatory litigation and stop frivolous litigation before it commences.
• By titling property into an offshore company, you can transfer real estate, boats, and other property more easily by selling or transferring stock instead of re-titling the property when sold.
• An offshore company may be used to segregate high-risk investments form other more secure holdings.
• Offshore legal structures are widely recognized as the premier resource for segregating assets and achieving privacy from potential litigation.
• The offshore option may be used as an effective prenuptial agreement.
• Protect retirement funds from possible bankruptcy.
• Estate planning: Provide for the transfer of assets for the next generation in an efficient and discreet fashion.
• An offshore company in conjunction with nominee directors and officers can allow you to conduct business transactions for your benefit while you remain anonymous.
• By transferring assets out of harm's way, different types of insurance costs may be substantially reduced.
• An offshore company may be used as holding vehicle for troublesome properties.
• When used in conjunction with an existing company, an offshore company can in many cases reduce or eliminate state income taxes.
• Used in conjunction with a carefully structured plan, federal taxes may sometimes be legally delayed or avoided altogether.

Several high tax countries such as Australia, Canada and U.S. have enacted anti-avoidance legislation designed to reduce the use of tax haven countries for strictly tax avoidance reasons. Tax haven countries are now generally referred to as Offshore Financial Centers, ("OFCs") and its interesting to note that their very existence substantially begin as an effect of U.K. and American efforts to reduce aid to specific developing nations. Instead of providing foreign aid, legislation was passed to grant incentives for multinational corporations to invest in target offshore jurisdictions.

Corporations based in an OFC may derive substantial tax benefits form their activities provided they know the rules and follow them carefully.

An offshore company can easily invest in any fund or investment available worldwide. These passive investments must be disclosed in most high tax countries and capital gains taxes paid in most cases.

However, if your goal is to access new markets, take advantage of business and investment opportunities unavailable at home, and protect your assets form frivolous and predatory litigation, use of an offshore corporation could reap extraordinary future benefits.

"Where I live in Alexandria, Virginia, near the Supreme Court building there is a toll bridge across the Potomac River. When in a rush I pay the toll and get home early. However I usually drive outside the downtown section of the city, and cross the Potomac on a free bridge. If I went over the toll bridge and trough the toll without paying I would be guilty of tax evasion.
However, if I go the extra mile and drive outside the city of Washington to the free bridge, I am using legitimate, logical and suitable method of tax avoidance. And, I am providing a useful social services as well."

- Louis D. Brandeis_U.S. Supreme Court Justice