Requirements for Credit Cards in Offshore Company with Bank Accounts?

[italkcash]

The benefit of having an offshore company with a bank tied to it is of course the obvious tax evasion. Other than that another great thing about having an offshore company with bank account is that the company can order Credit Cards, ranging from Visa (Regular, Silver, Gold etc), MasterCard (Regular, Silver, Gold etc), Amex (Green, Gold, Platinum) and maybe some banks offer Diners Club Card.

In all banks there is a requirement from the bank to the client to be a customer for a certain amount of time to build trust. In that time it is also required that the client use the bank account and builds wealth in the bank.

After a certain time the client will be able to apply for a credit card and most certain since its an offshore bank, the client would have to put down an amount to be reserved for the bank to issue a credit card. The bank will also typically require that for each credit card issued there will be a reserved amount.

The obvious benefit is of course that the client has the option to get "unlimited" amount of credit cards, in "unlimited" amount of names for its clients, co-workers or partners. The downside is typically the huge amount of cash that has to be reserved, sometimes up to 80.000€ in certain banks in Switzerland or Liechtenstein. The good thing is that basically anyone with a lot of personal dept in their own country will always be able to obtain a credit card (that is of course if they can meet the deposit criteria).

Does anyone have any experience with deposit amount for offshore companies and bank accounts tied to them? How low a deposit amount have you had to deposit in order to get a credit card?

[Offshore]

Actually the cards kind of defeat the purpose of having an anonymous company, since Visa and Mastercad and most credit card companies are US based. They have agreements long ago with US authorities:
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The US Internal Revenue Service announced that it is expanding its search for US citizens evading taxes by using offshore credit cards to encompass Visa records.

The tax department also announced that, after almost two years of negotiations, MasterCard has turned over 1.7 million credit card records for accounts based in the Bahamas, the Cayman Islands, and Antigua and Barbuda.

In an affidavit supporting the IRS's request for legal support over the issuance of a similar summons for Visa records, IRS agent Joseph C. West revealed that MasterCard's disclosures for 1998 and 1999 had turned up over 230,000 US citizens with offshore credit cards, many of whom had failed to declare the money lodged abroad.

'These actions should send a clear message to tax evaders,' IRS Commissioner Charles Rossotti observed earlier this week. 'If people use illegal offshore methods to hide their income, we will find out who they are.' Rossotti went on to warn those US citizens whose hidden assets remain undiscovered as yet that: 'the guarantee of secrecy associated with offshore banking is evaporating.'

Although the MasterCard disclosure is a significant milestone for the IRS, many feel that it represents the thin end of the wedge. The results of the Visa summons are likely to prove even more significant, as the scope of the search has been greatly expanded.

According to reports, the IRS is now seeking information from the nation's largest issuer of credit cards on banks in Switzerland, Latvia, Luxembourg, Hong Kong, Bermuda, Panama, Singapore, and several Caribbean jurisdictions, for the years between 1999 and 2001.
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The request for records relies heavily on evidence supplied by John Mathewson, a Chicago executive who set up Guardian Bank in the Cayman Islands, which was used by more than 1,000 Americans to evade taxes. Mr. Mathewson, 72, a convicted money launderer who received probation in return for helping convict his bank's customers, told investigators that 95 percent of his customers used credit, charge and debit cards. "Mr. Mathewson advised that he promoted the use of credit/debit cards so that his clients could covertly access funds stored in the Cayman Islands," Mr. West wrote in his affidavit. That affidavit also described a mechanism used by the Royal Bank of Canada to routinely help wealthy Americans set up accounts overseas and arrange for them to get American Express cards.

All three credit and charge card companies said they were unaware that their logos were being used in advertisements soliciting tax evasion. Mr. West said that the charge slips sought by the I.R.S. would advance a number of investigations, including one into 77 stock brokerage accounts established in tax-haven countries, 66 of which use charge cards for access to funds in the accounts. He said the I.R.S. was also investigating a Medicare billing technique involving the use of an offshore bank to evade taxes on the sale of medical devices to the government at huge markups.
Taking Aim at Tax Havens: IRS Seeks Credit Card Slips - Global Policy Forum-Nations and States


Panama Brokerage, Offshore Forex Accounts

[Offshore]

Oct.3, 2000 USA Today (moneyline section) worth addressing.

IRS efforts target offshore bank credit cards
by Greg Farrell
USA TODAY

A federal judge gave the Internal Revenue Service permission to demand from American Express and MasterCard the names of U.S. citizens with cards issued by banks in offshore tax havens.

The IRS said the sweeping effort is one its biggest ever in search of billions of dollars believed stashed offshore. Judge Adalberto Jordan in Miami OK'd an IRS motion Monday to seek names of card holders it thinks are hiding wealth and using cards to tap it. The accounts are legal if properly reported.

[DianaR]

I see no benefit in running this gauntlet, especially since the IRS could very well start throwing folks in jail for trying the maneuver!

[Offshore]

The old "cash in hand", walk in transaction is the only solution here for US folks for offshore banking.