International Financial Services

If you do not require a banking license, there are a number of less costly and less regulated options available. Please note that these entities may not provide the exception to the US Passive Foreign Investment Income regulations available to licensed and operating international banks. In most cases, these financial services companies are combined with a Swiss Trust Company to move back office and investment services to Switzerland.

Danish Bankers Trust Company

A Danish Bankers Trust Company is a financial services licensed entity in Denmark. It may offer financial, investment, bank and trust services. With paid in capital ranging from zero to US$90,000, depending on your structure, the cost and compliance requirements are far less than an international banking license. The Bankers Trust may offer financial services only to its own members or within its own controlled group of companies. This means that the Trust may act as an in-house bank. It may not offer or market any services to the general public.

New Zealand Offshore Finance Company

A New Zealand Offshore Finance Company (NZOFC) can offer banking services to both private individuals and corporations worldwide, with no limitations on number of customers, amounts on deposit or number of currencies.

The NCOFC can offer most services a licensed offshore bank can provide, but the word "bank" cannot be included in the name. Activities of an NZOFC can include but are not limited to deposit taking & lending, debit and credit card services, issuing of financial guarantees and instruments, cash management services, current accounts, checking accounts, savings accounts, term deposits, issuing of CDs, wire transfer services, payment processing, fund management, and marketing of investments

The company is not subject to capital reserve requirements and there are no regulations regarding nationality or residency of directors and shareholders.

A NZOFC is not subject to Central Bank supervision and regulation, but its activities are regulated by a number of acts and laws in New Zealand. It is common to compare this entity to licensed banks in the Cook Islands (closely tied to New Zealand) and Samoa.

Swedish Credit Union

A Swedish Credit Union is a registered Economic Association and can offer financial services to up to 1,000 members and requires no paid in capital from its founders. Services are generally restricted to accepting deposits and the making of loans.

"Members" should be high net worth entrepreneurs and the Credit Union's business plan should include common goals for its members. The entity may not use the name bank, but "Credit Union," "Savings," or "Savings & Loan" are acceptable.

The Swedish Credit union is a very cost effective deposit taking entity. Most bank licenses, especially those with low paid in capital, do not allow basic deposit taking services. So, what's the catch? The Swedish tax rate is 30%. One might reduce this by providing some services in a low tax jurisdiction, thereby transferring a reasonable amount of profits out of Sweden based on the value added in the low tax country. Also, each depositor is considered a shareholder of the bank...because of this complex reporting issue, Chris Rusch does not provide US tax compliance or consulting for these entities.

Panama Financial Services Company

A Panama Financial Services Company may provide financial services such as: payment processing, factoring, leasing, precious metals trading, bill collecting and related services, foreign currency trading, debit & credit cards, and trading in precious metals.

This entity is most commonly used for payment processing. As an active business, with offices and people in Panama, it is an excellent vehicle to retain earnings in a low tax jurisdiction.

The PFSC is commonly combined with a Swiss Trust and/or offshore bank. It is tax exempt and best used to process payments on behalf of an offshore bank located in another jurisdiction.

There are a number of options, entities and jurisdictions available to the international entrepreneur. Please contact me for a free consultation.