Currency Diversification Into Chinese Yuan

Currency Diversification Into Chinese Yuan
Currency Diversification Into Chinese YuanThe Easiest Way To Hold Yuan

July 6, 2015
Algarve, Portugal

Dear Offshore Living Letter Reader,

Five years ago, a friend recommended that I open an account with the Bank of China in New York. A Bank of China account is an easy way to hold yuan directly, something that, as my friend suggested to me years ago, every global investor should think about doing.

Finally, in New York City with my wife last week, I was able to take my friend’s advice by accident.

Looking for a place for lunch between Kathleen’s morning interview on Fox Business News and an afternoon meeting with the Wall Street Journal, we passed the Bank of China. Serendipity. We walked in to ask about opening an account.

An hour later, with the competent and efficient help of the charming Bank of China agent, we had U.S. dollar checking and yuan savings accounts. All we needed were two forms of ID and our Social Security numbers. Banks in the rest of the world nowadays want to see two forms of ID, a bank reference letter, maybe a reference letter from a professional contact (your attorney or accountant, for example), and maybe a copy of your most recent tax return. Then they hand over a stack of forms for you to complete.

That’s been my recent experience. In Panama, add unhelpful and sometimes surly bank agents to the mix for a full picture. The experience at Bank of China in New York was so dramatically different from any other I’ve had in so long that I’m tempted to try to open an account at the Bank of China operation in Panama to see how the process compares in that country.

My friend recommended holding yuan starting back in 2010 as a hedge against what he thought could be a big revaluation of the Chinese currency at …Continue Reading

It Is Not Illegal To Move Assets Offshore

business move assets offshore
business move assets offshoreMoving Isn’t Hiding

July 2, 2015
New York, New York

Dear Offshore Living Letter Reader,

Some recent reader emails have me scratching my head. Some readers rail against me for writing about ways both to save taxes and to protect assets by moving them offshore. These readers seem fully to believe that these activities are illegal. The only thing I can think is that they are mis-merging ideas.

Hiding assets offshore to avoid taxes, yes, that’s illegal. Do that, and, in the current climate, with the IRS on a mission to uncover every U.S. asset held offshore it can, you’re going to get caught. The cost of getting caught is going to be multiples of whatever you might temporarily save in taxes.

For the record, I’ve never recommended moving assets offshore to hide them. I recommend (always have… always will) disclosing everything you’re meant to disclose to whatever government or tax authority it’s meant to be disclosed. Hiding assets does not work.

However, hiding assets is not the same thing as moving assets. Hiding assets offshore is illegal. Moving assets offshore is not. Don’t believe anyone (any media, any accountant, any attorney) who tries to tell you that moving assets to another country (by placing them in a bank account there, for example, or in a foreign trust) is illegal or a tax dodge. It’s not.

The truth of the matter is that moving assets offshore is …Continue Reading