There are many ways of transferring your money to an offshore account, outside the local authorities’ area of influence and control. Today, for purely informational purposes, we’re going to digress somewhat and explain which legal options you have to make your money disappear and keep it safe from onlookers, so that no one can trace it.
There may be many good reasons for making your money disappear and transferring it to an offshore bank account. This, of course, is not illegal, and is a perfectly legitimate option for people who want to maintain their financial privacy. Of course, it is important that, before making your money disappear, you’ve paid all the necessary taxes.
There’s no reason why everyone should know where you keep your money or where you have your bank accounts, especially if you’re having problems with your spouse, family members, or a vengeful partner.
If you just make a transfer from your bank account, the offshore bank account will be perfectly visible and identifiable, such that no matter how much banking secrecy you are offered, it won’t be a secret account. In other words, if you really want to hide your money, bank transfer isn’t a good option.
As we already said, the methods explained below are designed for cases where you’ve already paid your taxes. In other words, they are not designed to evade taxes, but to allow you to protect your privacy. Bear in mind that tax evasion can have consequences.
Whether the method itself is legal or not will depend on the respective local laws. Whether each one is legitimate or not, from a moral standpoint, is something you will have to decide for yourself. So, stay out of trouble and read up on the laws that apply in your country of residence first.
This is one of the oldest tricks in the book that is very expensive and time-consuming, transferring from one bank to another.
Start with one (or several) totally innocent transfers to an overseas account, to some country that is not considered a tax haven. The UK is a frequently selected option for this first step.
From there the money is sent to reputable tax havens, such as Malta or Gibraltar. And from there the money is sent to a jurisdiction with stronger banking secrecy.
The process can be repeated as many times as you want until the sums of money reach their final destination.
The accounts in this process should not be in your name, but in that of an offshore company with appointed shareholders and directors. It is important that you never make a transfer to the same account from more than one bank in the payment chain. At the same time, banks should not be located in the same jurisdiction.
This method is almost impossible for the authorities to detect. Where structures are complex, tracking money which has been transferred several times, across different jurisdictions, requires an enormous amount of time and resources. Authorities often give up after ‘peeling’ the first layers.
However, everything obviously gets more complicated and expensive with each additional transfer, as well as for the person moving the money. Furthermore, banks don’t like to be mere ‘transit banks’, but want to make money off the money you keep in their accounts.
Therefore, these transactions are closely monitored by the bank and if they are of large amounts you might be asked to justify the transaction in some way.
In this case, an offshore company you control issues an invoice to you. These invoices must include intangible goods and services, such as web hosting, technology consulting, leisure or VoIP services.
Of course, you shouldn’t try to deduct the expense, as this would be illegal. In any case, it is usually something you won’t be able to do with invoices issued by offshore companies (we talked about that here).
In most countries this method is relatively simple and secure. Legally speaking, it is usually a grey area. Anyway, bear in mind that you will not be able to make very high sums of money disappear in this way either.
Online gambling is another very popular method, which, in turn, is becoming increasingly complicated. It is ideal for small sums, lower than €10,000.
You have to transfer the money to several betting sites, the more the better. The deposit must be made using a method in which reimbursement is not possible. It is generally made by credit card or Paysafecard. Then, if someone asks you about the money’s whereabouts, you can come up with a story about your gambling addiction.
After depositing the money, you must use it at least once fully for the game. This is necessary because, otherwise, the provider will think you’re looking to launder your money.
To avoid raising suspicion you should bear certain aspects in mind. On one hand you should avoid low-risk bets. For example, you shouldn’t bet that Brazil will beat San Marino at football or that New Zealand will beat Switzerland in rugby. A good risk analyst would notice this behaviour.
Instead, you have to choose many rounds of Black Jack, Video Poker or other casino games. You need many rounds with small bets to minimise the risk of losing. You can use bots for this, which will do it for you. However, you have to have enough technical skill to get them to simulate human behaviour.
Unless you’re a professional gambler, you will lose sometimes, but these losses will be minimal if you’ve done many rounds with small bets.
Once you’ve stopped playing, you can withdraw the money to another account that is also in your name.
Although this is very time-consuming, and you’ll often lose some of the money, this is still a popular low-risk method.
There are many variants of this method, but in essence it consists of suing yourself through your own offshore company and transferring the sums requested to your company’s offshore account.
It is precisely the obviousness of this method that makes it most effective.
Be that as it may, it is a method you can rarely use twice, unless you do it with trusted third parties.
This method is rarely legal and is considered immoral by most people. In this case, offshore companies or foundations are registered under a name similar to that of a charity, and then you donate the amount you want to them.
If you have time and want to give it some imagination, you can set up your own charity, make a website and so forth.
Especially if you plan on deducting your donation (something that would undoubtedly be considered tax evasion and which we do not advise), you’ll need to create a structure and image sophisticated enough to pass off as an established charity.
Be that as it may, bear in mind that donations to fake charities are illegal in most countries (even if you don’t try to deduct it), and tax authorities are usually very wary of new or not very well-known charities, especially if they’re in tax havens.
Travelling with cash and precious metals
The days where you could travel to Switzerland with a briefcase stuffed full of money are gone (at least in bank branches you will not be accepted as a customer).
However, travelling with money or precious metals is still legal in the EU, as long as you’re not carrying more than $10,000 (here is another article on cash circulation restrictions). If you’re carrying more you’ll have to declare it, something which in theory shouldn’t be a problem.
In practice, however, cash limitations do not make much sense without the existence of borders and controls in the EU and Schengen area. Even if we travel by plane, the likelihood of being controlled is minimal.
Even though Switzerland no longer accepts large cash deposits, there are other countries outside Europe that consider this relatively normal.
In many countries, cash cards and the use of cards is quite uncommon and banks still rely almost entirely on cash. This is especially the case in places like Armenia, Azerbaijan, Liberia, Tanzania and many other African countries.
However, many of these jurisdictions are blacklisted and are under close control. There’s also always the risk of losing your suitcase.
As you can see, there are still ways of avoiding the state’s control and protecting your privacy, including financially. However, as we explained in this article, it is not a good idea to use them to evade taxes, as this could cause huge problems.
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