A lot of readers contact me to ask about offshore banking and wealth management services in Singapore. Unquestionably, Singapore has some very sophisticated banks and bankers, and it has developed a well-earned reputation for discretion and confidentiality.
However I recently found the following observation on an internet discussion group:
The Singapore government is proposing changes to its tax laws to meet demands from the U.S. and Europe to clamp down on bank secrecy. Singapore will seek to amend its domestic laws to allow it to extend further cooperation on information exchange via double-taxation agreements with other countries, the Finance Ministry said in a statement. It is seeking public comments through July 28 on the amendments.
The Swiss government however, as we have seen, takes the right to confidentiality and financial privacy more seriously. There has been an ongoing debate for over a year in Switzerland about revealing data in the well-known UBS case. So how can we interpret these reports? Is Swiss bank secrecy better than Singapore bank secrecy? Or is bank secrecy dead?
First of all, they both have to be taken in context. While it's good to see Switzerland sticking up for its sovereignty, we have always recommended clients against doing business with big, international banks like UBS or Credit Suisse. It was hardly surprising that UBS were targeted, given their large US presence. Swiss Cantonal Banks offer much better security and privacy.
Singapore is a place where we've never done a lot of banking business, and the quotation above goes some way toward explaining our reticence. But we fully admit that our geographic bias when it comes to banking is more towards Europe and Latin America. Singapore is certainly convenient for Asians and Australasians, due to time zones, languages and culture. On the other hand, it would have to be up there with Hong Kong at the top of the hit list for say the Aussie tax authorities, who are getting more and more agressive these days, especially demonstrated by their ludicrous recent attempt to tax the mining business.
But is banking in Singapore and Hong Kong such a good idea for Europeans and North Americans? In my view, probably not. Both the EU (particularly the UK) and the USA have quite strong influences there, and unfortunately, due to the political situation, neither of these entities are friends of offshore banking although they nominally support free enterprise. Canadians might be OK in Singapore.
Generally, when it comes to private banking, a ground rule is that convenience is a threat to privacy. If you are looking for the most private, best offshore bank for you, you want to be as far away as possible - both geographically and culturally - from your home country and the places where your fellow countrymen do their offshore banking. Europeans might do well in Latin American havens like Panama and Uruguay. North Americans might do well still in more obscure corners of Europe.
Whatever you decide, remember that nothing is for ever. You need to monitor the situation and changes taking place in the world of offshore finance. It pays to work with banks that are nimble enough to help you with this. So I would look for banks that have a multi-jurisdictional presence.
And is bank secrecy dead? Far from it. Don't get me wrong, I do not advocate tax evasion at all, and the old ruse of holding a bank account overseas and not declaring it is very likely to get you into trouble, depending mainly on your country of residence and citizenship. Americans, in particular, are required to declare all offshore bank accounts unless the total value is under $10,000 and the IRS is very strict on enforcing this, so don't think of breaking the law! On the other hand, if you are an honest law abiding citizen who still believes in the concept innocence until proven guilty - that government spying on your financial affairs is both wrong and unconstitutional - then there is still every reason to go offshore. It's where the smart money is!
Peter Macfarlane has written numerous articles on his blog about the Right Way to Open Offshore Bank Accounts and use international asset protection structures legally and confidentially. His annually-updated "Practical Offshore Banking Guide" includes contact details of other recommended sources for private banking services.
Writer Peter Macfarlane is acknowledged as a leading writer and public speaker on offshore banking and asset protection matters. He is editor of the Practical Offshore Banking Guide. This annually updated guide is available free to readers of The Q Wealth Report, a privately-published newsletter based in Switzerland covering freedom, wealth protection and privacy issues. Visit QWealthReport.com to read more articles like this or sign up for free offshore banking information in the weekly 'Q Bytes' e-mail newsletter.