How You Can Refuse to Participate in Financial Tyranny with a Second Residency
Financial privacy has been on the decline for decades now. From rules against money laundering to limits on cash transactions to the virtual abolition of financial privacy with CRS and FATCA.
The Common Reporting Standard (CRS) is the automatic exchange of financial information between countries. It was designed by the bureaucrats at the OECD to stop tax evasion. CRS means that banking privacy has been abolished in most of the world. All the major offshore locations are signed up to it. It’s now more difficult (but not impossible) to bank in private.
Bureaucrats who Attack Financial Privacy Live Tax Free
Interestingly, the bureaucrats at the OECD that make these anti-privacy rules to prevent tax evasion don’t pay tax themselves. According to the OECD’s website, salaries for OECD employees are exempt from tax in most member countries. So, it’s one rule for us and an entirely different rule for the politicians and bureaucrats who make and enforce the rules.
The same rules apply to the tax loving bureaucrats at the European Union. Their salaries are tax free despite working to impose tax and regulations on European citizens.
Take Back Your Financial Privacy
Anyone setting up an overseas bank account must consider how to get around the CRS rules. A few extra steps are now required to keep your finances private. Of course, many banks allow you to self-report your country of residence for CRS. It’s possible to get a tax ID from a country where you’ll never have any bank accounts or assets and report that as your tax residency. This strategy works in many cases. The end result is that your financial information is reported to the country you’ve given as your tax residence and not where you actually live.
Banks in some countries have stricter compliance. They’ll want a passport or at least a residency card for the country you claim as your tax residence. That’s where an easy to get residence permit can be useful. A residence permit for a country that’s not part of CRS is best. That means your financial information stays private and isn’t sent to any third parties.
Get Residency in a Non CRS Country
There are a few options around the world for easy to obtain residence permits. One of the best is Paraguay. The South American country is becoming increasingly popular with Europeans and Americans. It’s not part of CRS, so you can still bank in private. It’s also somewhere you’ll be left in peace by the government. That’s the reason it’s attracting more attention. It’s still a territorial tax country too. Anything you make outside Paraguay won’t be taxed there.
For those who want a residence permit, you’ll have to make the effort to go there for a few days to complete the formalities. That will involve depositing a few thousand dollars in a local bank account, proving you’ve got a clean criminal record and completing a medical. You’ll then get a residence card in a few weeks. You can use that residence permit to open bank accounts anywhere in the world. You’ll have all the evidence you need to claim Paraguay as your tax residency country. Even banks in high tax countries or tax havens lie the Cayman Islands will not be compelled to share your confidential information with anyone else.
The US government is not part of CRS. They have the equally intrusive FATCA to spy on the financial affairs of citizens. FATCA depends on a series of bilateral agreements. It’s worth noting that Paraguay does not have a bilateral agreement with the US government for exchange of financial information. Individual banks can still choose to participate.
Everyone should be concerned about the intrusive CRS. Having a second residency in a non-CRS country can be a useful way to maintain your financial privacy.