Offshore Banking Report HTML version
Before writing this report I pondered over my own experience - which now dates back to 1998. That
was the year I first really learned about offshore bank accounts and the offshore world in general.
I was fascinated from the start. Back then it seemed to be merely a matter of searching out some
offshore tax haven and then opening an account with a bank that was established there.
And that's exactly what I did. I picked Vanuatu. Now, before you get flummoxed and ask where the
hell that is, I'll tell you. It's in the South Pacific - a small group of islands that (at the time) fancied
itself as an offshore tax haven.
That was good enough for me. I discovered there were two banks operating out of this tiny country -
so I picked the larger one, and an Australian bank which had a branch there.
To make my new found banking domicile complete, I formed a Vanuatu IC (International Company)
and opened the bank account in the corporate name, using an accounting company present on the
I felt pretty good. I was now the proud owner of my very own offshore bank account.
This particular account was set up and managed by the accounting company as mentioned, which
meant they had signatory power over my account and that I was like an "invisible' third party.
When I wanted to withdraw funds (bank wire was the only option in those days) I had to send my
instructions via email - using PGP (Pretty Good Privacy encryption) and then the accounting
company would action my request.
Depositing funds was easier, requiring only that I send a wire transfer to the account directly. Each
month I received a statement via the accounting company and a fee for their (exorbitant) charges!!
Back then there was no internet banking to speak of, and not even a basic debit card - just a plain
bank account that cost me more than $100 a month to operate.
But it did the trick. It allowed me to experience the reality of banking offshore - and to take advantage
of the privacy it offered.
All went well for a couple of years. I was building an internet business at the time and I had found a
credit card merchant in Canada which would wire my accrued funds to my Vanuatu bank account
once each month. And the money piled up nicely.
The easy ride finished straight after 9/11 - when suddenly the spectre of international terrorism
caused the USA to initiate far-reaching banking regulations - applicable to all accounts (worldwide)
that were transacting in USD.
Very soon, Vanuatu found itself on a blacklist - and it was impossible to wire USD directly to my
account. At first the Australian bank did a praiseworthy job of trying to make things work - by
allowing funds to be wired directly to their main branch in Australia, for an internal transfer to the
books of their Vanuatu branch.