VEGAS WEALTH BUILDER PART III

BY

VEGAS

[Originally published February, 2006]

[Updated July 8, 2006]

IMPORTANT DISCLOSURE INFORMATION

YOU MUST READ

All the information in this file and/or document has been prepared for entertainment,
educational, and/or informational purposes only. All or any specific opinions, views, or
information presented herein by the author, has been prepared with the knowledge and
belief that it is true at the time of writing and/or publication. There can be no guarantee or
warranty that this information is correct, and/or will not be materially changed in the
future. The author does NOT provide any professional legal, tax, and/or accounting
services. If you need proper legal, tax, and/or accounting assistance, you should contact
the proper licensed professionals in the jurisdiction in which you are domiciled.

This file and/or document is NOT a prospectus. It is NOT an offer to buy or sell any
securities. The author is NOT registered with any governmental agency, nor has any third
party judged the merits of this file and/or document.

This file and/or document may contain ideas and strategies that are new to some people.
If you are NOT a sophisticated investor, and/or find that some information is not clear,
then you should seek competent, professional advice.

It is the strict and clear policy of the author that every legitimate, legal entity upholds and
obeys the laws of the jurisdiction in which they are domiciled. It is NOT the author’s
intent, either directly or indirectly, to suggest that a legal entity knowingly violate any
law.

The author will definitely NOT be held responsible and/or accountable for any
consequences resulting from the use of ANY information, in this file and/or document,
by individuals whose intent is to violate any law in any jurisdiction. You and you alone
are responsible for your actions.

The author is not a promoter or provider of any offshore services or products, and has no
financial interest in any offshore services or products any third parties may provide now
and/or in the future. The author does not represent any third parties for offshore services.
Any and/or all third parties referenced in this file and/or document are hypothetical in

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nature and are intended, either directly or indirectly, for use in an informational and/or
educational capacity. The author does not condone and/or recommend any attempts at tax
evasion in the jurisdiction in which you are domiciled. Every person should respect and
obey all laws in the jurisdiction in which they are domiciled.

IN PLAIN ENGLISH

1) If you use any of the information in this file and/or document to evade taxes,
or evade reporting requirements as stipulated by law in your domiciled
jurisdiction, and get caught, it’s your problem and no one else is responsible.
2) If you use any of the information in this file and or document to hide assets
from creditors, former or current spouses, and/or civil/criminal judgments and
fines and get caught, it’s your problem and no one else is responsible.
3) If you use any of the information in this file and/or document and the resulting
consequences lead to civil and/or criminal prosecution, it’s your problem and
no one else is responsible.

IF YOU DO NOT AGREE TO THE TERMS OF THE ABOVE DISCLOSURE

SECTION OF ‘VEGAS WEALTH BUILDER PART III’ THEN STOP READING
NOW AND DESTROY THIS FILE AND/OR DOCUMENT. DO NOT CONTINUE
READING PAST THIS SECTION. YOU AND YOU ALONE ARE RESPONSIBLE
FOR YOUR ACTIONS.

INTRODUCTION
LET’S GET STARTED
Many of you, quite naturally, are immediately concerned about the cost of going
offshore. What is the initial cost and what are the maintenance fees thereafter? I will
answer this question shortly, but before I do, it is important for you to not think of these
costs as truly costs. They are expenses for infrastructure that allow you to amass a fortune
over time.

Consider the following table constructed in Excel. Think for a minute about how much
your trading activities generate each year in profits [if no profits, then see VWB and
VWB II immediately]. Let’s be conservative and not be overly optimistic. If you can
generate about 3% - 4% per month over a long period of time, then you are returning
about 40% per year. If you do this year-in year-out you can safely say you are a
successful trader. Granted, small amounts of trading capital can show huge percentage
[%] returns and may allow your capital to grow more quickly in the beginning years, but
in order to keep the calculations simple for this hypothetical example let’s keep the
original assumption at 40% per year.

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In Table 1 below, go to the 20 year row and 40% column. Twenty years at 40%, on
$1,000 equals over $800,000. Now, that’s just on a measly thousand bucks. Oh, wait a
minute; you have to pay taxes every year so this is impossible. Every year the
Government will get about 50% [Federal and Local] so instead of the 40% return go look
now at the 20% row. It yields about $38,000. Consider the first scenario being offshore,
and the second where you are at now paying taxes.

Table 1

So what would it look like if you had started trading with $50K in the account? How
about $40 MILLION vs. $1.9 MILLION!!

So, should anyone complain about startup costs and annual maintenance fees of a few
thousand dollars?

To structure the offshore entities correctly [model #1], plan on initially spending no more
than USD $5,000. I’m not saying someone will spend this much, just be prepared. Actual
costs will be somewhere in this ballpark figure. Yearly maintenance fees will be
approximately USD $2,500. A very basic structure [model #2] will cost approximately
USD $1,500 with annual fees about USD $400 - $500.

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Over twenty [20] years that would equal about USD $55,000 in outlays [model #1] vs.
the $38 Million in additional earnings. That’s why I say it’s an investment in
infrastructure not an expense.

CHAPTER 1
RECOMMENDED OFFSHORE JURISDICTIONS

There is no purpose in going over every single offshore jurisdiction in the world. From
many to choose, there are only three that make the list [and one that will be added later].
Every place else lacks in some important criteria. All three offer the very best in the
following important areas: 1) case law, 2) political stability, 3) independent foreign
government, 4) very strict privacy and confidentiality laws, 5) relevant offshore business
legislation, 6) great communications and banking infrastructure, 7) reputable offshore
business environment, and 8) low cost offshore structure.

The three [3] are [no importance of order]:

1) Belize
2) Panama
3) Nevis

It is important to realize that I am referring to the business structure of being offshore.

There are other considerations which must be thought out and I will get to them shortly.
Currently these 3 jurisdictions [and the other mentioned later] provide the absolute very
best in offshore incorporation schemes and protection.

Why Belize and Panama

Both have very strict privacy and confidentiality laws. Just asking somebody about a
financial matter in which you are trying to discover information can land you in jail.

How secure is Belize? Well, enough to withstand even the best efforts of the US SEC.
Belize was the first country to turn away the SEC in a landmark Supreme Court ruling. In
a landmark decision asserting Belize’s sovereignty as an offshore financial jurisdiction,
the Supreme Court of Belize upheld the country’s confidentiality laws by revoking a
previous court order set in motion by the Securities and Exchange Commission of the
United States requesting that confidential documents, belonging to Swiss Trade and
Commerce Trust, Ltd., be handed over to them.

In the case, Securities and Exchange Commission (SEC) vs. Swiss Trade and Commerce
Trust, Ltd., Banner Fund International, Lloyd Winburn et al, Supreme Court Justice
Troadio Gonzalez ruled that documents held by the Belize court belonging to Swiss
Trade and sought by the SEC, be immediately returned to Swiss Trade and Commerce
Trust, Ltd.

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Lawyers for Swiss Trade said that what this means for Belize is that this aspect of
confidentiality, which is an important feature of the offshore industry, has been upheld.
The decision was a major shot in the arm for Belize’s offshore financial services sector.
A country’s ability to assert its sovereignty without the interference of outside forces is a
major deciding factor in choosing a place to invest and protect personal property.

When asked for his comment related to the decision, Lloyd Winburn, Director of Swiss
Trade & Commerce Trust, Ltd., in Belize, stated, “The Court’s decision confirms our
reasons for establishing our company in Belize originally. The law related to
confidentiality has been tested and found to be not lacking clarity and strength.

The case arose after the SEC investigators attempted to get information on individuals
holding assets with Swiss Trade. The Supreme Court decision was upheld by the Court of
Appeals in 1996.

So, in summary, the Belize Supreme Court told the US to go pound sand. Below is a link
so that you can read the opinion of Supreme Court Justice Troadio J. Gonzalez. The link
is:
http://www.joeizen.com/belize.htm

Panama is unique in that it has two major things going for it that nobody else has. First, it
is the hub of commerce between the two hemispheres, so it isn’t only a tax haven. Every
major bank and Fortune 500 company has a presence in Panama. There are very large
maritime, insurance, banking, legalized gambling, and international shipping industries
that use Panama extensively. So, being there isn’t going to automatically mean you are
escaping taxes.

The second matter is the legislation regarding the adoption of the Private Interest
Foundation into the legal code. Outside of Lichtenstein [which is super-duper expensive],
Panama is the only other jurisdiction in the world [although others are trying] that offers
these unique vehicles for privacy, security, anonymity, and asset protection.

These are essentially charitable vehicles that YOU control 100%. YOU name the
beneficiaries [you may change them at any time]. There are NO public records anywhere
that reveal your name. They are based on Roman Law not English, which means there is
no concept of OWNERSHIP [nobody owns the Foundation], only the concept of
Beneficiary. They cannot engage in business, but managing assets [trading forex, stocks,
bonds, options, bank accounts, etc.] is not considered “business”.

In essence, the Private Interest Foundation, is a private charity for yourself [obviously
you can name yourself a beneficiary] and your beneficiaries [can be anybody or entity]
that you, and nobody else, controls and manages.

For a complete discussion see Appendix A.

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The official translated English version of the legislation that created the Private Interest
Foundation is Appendix B.

Why Nevis?

If there is a need in your financial matters for the use of a trust, Nevis is the place to be.
They have the most up-to-date legislation and the strictest requirements for third parties
[i.e. Government and lawyers] attempting to find information about your affairs. Nevis
makes it expensive and time consuming to try and find information on trusts.

CHAPTER 2
LAYERING OFFSHORE STRUCTURES

What do I mean by layering? Simply, that keeping everything [or most all] in one
jurisdiction is not prudent or wise. The correct approach in being offshore requires a
multi-dimensional business structure with activities taking place in more than one
jurisdiction.

The other jurisdictions that can be used in this regard are the following [no importance of
order]:

1) Seychelles
2) Antigua
3) St. Vincent

These jurisdictions can be used for banking, brokerage, and/or management services.
They are NOT to be used for the business structure, but are very safe and private for what
they may be required in an offshore plan with the original three [3] outlined in Chapter 1.

CHAPTER 3
RECOMMENDED OFFSHORE STRUCTURES

These are the very best structures to use in the following jurisdictions:

BELIZE

The use of the International Business Company [IBC].

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[Note: Complete information on the Belize International Business Company [IBC] can be
found in Appendix C.]

PANAMA (MANDATORY FOR US, CANADIAN, AND EUROPEAN CITIZENS)

The use of the Private Interest Foundation [PIF].

[Note: Complete information on the Panamanian Private Interest Foundation [PIF] can be
found in Appendix A. The relevant legislation of Panama is in Appendix B.]

NEVIS (NOT FOR US, CANADIAN, AND EUROPEAN CITIZENS)

The use of a Nevis Foreign Asset Protection Trust [FAPT].

[Note #1: This is an option for others that may, in some circumstances, be safely utilized.
It is an alternative to the Panama PIF. Your circumstances will determine if this is a safe
vehicle. If you are unsure, stick with the Panama PIF, as it is for everyone.]

[Note #2: Complete information on a Nevis Foreign Asset Protection Trust [FAPT] can
be found in Appendix D.]

SEYCHELLES

The use of a reputable, well-known, management services company that can provide all
the in-house services your structure needs for successful operation. They will provide all
incorporation and management services for each layer in the offshore structure in
different jurisdictions, bank and/or brokerage account introductions and setup, act as
Nominees, and most importantly act as Account Signatories. They may offer additional
services such as anonymous mail-drop, phone and fax capabilities, office services, etc.

CHAPTER 4
THE ULTIMATE PROTECTION OFFSHORE STRUCTURE

[Note: This is a hypothetical example only and is the author’s opinion based on
knowledge available at the time of writing. There is no guarantee or express warranty that
this information is correct or will be correct in the future. The author does not provide
professional legal and/or tax advice. If you need such advice you should consult a
professional attorney in the jurisdiction in which you are domiciled. The author does not
sell or promote any offshore schemes, nor is the author partnered in any respect with third

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parties to provide such services. The author does not wish to imply, either directly or
indirectly, that anyone should engage in tax evasion. Every person should obey all laws
in the jurisdiction in which they are domiciled. This information is for educational and
informational purposes ONLY , in the broader context of offshore finance.]

FOR US, CANADIAN, AND EUROPEAN CITIZENS

This is a dual entity structure consisting of a Panamanian Private Interest Foundation

[PIF] holding 100% ownership of a Belize International Business Company [IBC]. This
type of structure provides the utmost in asset protection, privacy and anonymity. The
Belize IBC holds liquid assets in bank accounts [CD’s, checking account, and possible
money market accounts] and brokerage accounts [equities, bonds, mutual funds, forex
trading account, options, CFD’s, etc.]. The Foundation simply acts as the holding
company to the corporation.

To understand the role of the Foundation within this structure, you first have to
understand the composition of the Foundation. There are 4 parts.

1) The Founder

The Founder is the person or entity that forms the Foundation in the public registry. All
reputable firms provide a Nominee Founder to protect your privacy and anonymity [an
undated, pre-signed letter of resignation from the Founder is provided immediately upon
incorporation of the Foundation. At that point, he holds no control.].

2) The Foundation Council

The Council serves the same function to the Foundation as Directors do to a corporation.
The Council’s names and identification numbers [Passport] are registered in the public
registry when the Foundation is incorporated [All reputable firms provide a Nominee
Council to protect your privacy and anonymity, and provide undated, pre-signed letters of
resignation from the Foundation Council. At this point they have no control.].

4) The Protector

The Protector is the controller of the Foundation. Immediately upon incorporation of the
Foundation, the Foundation Council appoints a Protector [you]. It then notarizes what is
known as a Private Protectorate Document. This Document is a private, non-publicly
registered document; therefore the Protector remains 100% anonymous.

At this point, the Protector has FULL CONTROL over the Foundation and ALL of its
assets.

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 4) The Beneficiaries

The Beneficiaries are appointed by the Protector through a Private Letter of Wishes. This
letter is a non-publicly registered, private document, so the Beneficiaries remain 100%
anonymous. The letter can be changed or modified at any time by the Protector ONLY.

The Foundation is established to serve four (4) primary purposes.

1) To serve as the holding entity for the Belize IBC.

By using the Foundation, you avoid having to use bearer shares or shares registered in
your personal name. The Foundation is the shareholder of record. You control the
Foundation anonymously [as Protector] through the Private Protectorate Document.

2) To serve as the beneficial owner when opening financial accounts.

In this 9/11 world we now live in [Patriot Act, etc.], all offshore tax haven jurisdictions
have implemented laws that require banks and other financial intermediaries [brokerage
houses] to obtain “declarations of beneficial ownership” when establishing corporate
bank and/or brokerage accounts. The Foundation can serve as the beneficial owner for
these declaration purposes and the Nominee Foundation Council can sign the declarations
on behalf of the Foundation.

3) To serve as a testamentary vehicle for distribution of your assets to your heirs.

Under Panamanian laws, a Foundation’s assets are non-embargoable and non-

sequesterable, meaning no one may freeze the assets under any circumstances [3 year
statute of limitations from the time assets are put in the Foundation].

The Foundation is specifically designed to protect and distribute your assets to

beneficiaries [which can be changed at any time for any reason] upon a triggering event
[death]. The Letter of Wishes [written by you the Protector] serves as a living will,
detailing the Foundation’s assets, lists of Beneficiaries, and how and when those assets
are to be distributed.

Since the inheritance of assets is outside the Beneficiaries domicile, the inherited assets
are not subject to the usual hassles [taxes and probate fees] and legal red-tape found in
most industrialized countries.

4) To serve as the vehicle to facilitate the transference of funds offshore.

Since the Foundation is a charitable entity [for your private use and your beneficiaries], it
may receive donations from anyone. It may also give donations and/or grants to anyone.

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You can clearly see that, although the structure is fairly simple in design, it is impossible
to follow if you have no information regarding its inception. No one jurisdiction or one
function of either the IBC or the PIF, gives any clue to a third party as to what else is
going on inside the structure [proper layering]. To attempt to follow this around the globe
would be an expensive and useless exercise.

FOR NON-US, NON-CANADIAN, OR NON-EUROPEAN CITIZENS

For those of you who are NOT citizens of the United States, Canada, or the European
Union (EU), there is another alternative if you feel comfortable with the structure. While
the Panamanian Private Interest Foundation is the preferred structure, you may choose to
elect a Nevis Foreign Asset Protection Trust (FAPT) in its place as the holding entity for
the Belize IBC. Please see Appendix D for further details.

CHAPTER 5
THE MANAGEMENT SERVICES COMPANY

There is nothing more important than the quality of your management services company.
They basically do everything, and you send the money. You can spend many hundreds of
hours researching companies on the web and come up just as confused as when you
started.

A great jurisdiction for management services is the independent country Seychelles.

Privacy, anonymity, confidentiality, and the laws to back them up with severe penalties
make this an ideal location for your Nominees. Located half-way around the globe from
Belize and Panama, it is a perfect compliment for a layered offshore structure.

Maritime International Ltd. Is a professional offshore provider located in Seychelles.

There isn’t anything this company can’t do. Need Nominees – No problem; need a bank
account or brokerage account – No problem; need trust help and guidance – No problem;
how about web hosting offshore for that new internet company you want to start? – No
problem, they have the contact; how about world-wide health insurance for yourself? –
No problem, they have the contact.

Please go to the following website to discover this company:

http://www.milonline.com/index.html

Please take the necessary time to explore the website and all the links that they provide.

[Note: The author has no third party relationship of any kind with Maritime International
Ltd. The author does not have any financial relationship with any offshore management
service providers of any nature. The use of Maritime International Ltd. In any offshore

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structure is of a hypothetical nature and for educational and informational purposes only,
and in the general construct of a discussion of offshore finance.]

CHAPTER 6
WHAT ABOUT TRUSTS?

I’m not going to spend any time with trusts for one basic, simple reason: no matter how
you layer it, form it, or have somebody make it, you trigger a blizzard of IRS forms when
you create one. It doesn’t make any difference if it’s a FAPT from Nevis or any other
jurisdiction. A trust is a trust and you have to file forms. If you choose not to and the IRS
finds out about it, then you have a major problem.

Also, recent court cases in the US have proved that US judges either do not understand
the essence of what a trust is meant to be or simply have made decisions that in essence
disregard trust legislation altogether. For this reason, any trust structure that is domiciled
in the US and some other common law countries are not worth the paper they are written
on. This is not to say that the laws in these countries are always poor regarding these
structures. The real current problem is that those upholding the law (judges and court
systems) have chosen to disregard the law or interpret the law in such a way that no real
protection is offered with these types of structures.

So that you can become familiar with what’s going on in the US legal community, please
go to Appendix F now and follow the link. You’ll see why nobody in the US would ever
want to use a trust for anything.

CHAPTER 7
TAXES & OTHER IRRITATING GOVERNMENT FORMS

[Note: The author is not engaged in professional tax and/or legal advice. No assumption
should be made that the author is an attorney or is an expert in the field of US taxes. All
information in this chapter is the opinion of the author and is provided as educational
and/or informational material only, within the broader concept of offshore finance.]

There are five matters I want to headline before I discuss Internal Revenue Service [IRS]
forms and taxes, and Treasury Department Forms [TDF].

1) The first is the concept of the legal entity. Everybody knows that actual people are
individual entities as defined by the law. Corporations are also and it doesn’t
make any difference who incorporated the corporation. When you incorporate
[Domestic US Corporation, IBC or Foundation], you have just created a legal

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 entity that has all the rights under the law as a person. Every legal jurisdiction in
the world recognizes this concept.
2) The United States has the toughest tax laws of anyplace in the world. Maybe
Germany comes close, but from there it gets relatively easier. If anything can
avoid the IRS then it can be avoided pretty much everywhere else.
3) I don’t care how you structure or layer any entity. If you are a US citizen and you
receive money from ANY source, it counts as income as far as the IRS is
concerned. Period, end of story, and if you don’t report the income you are
committing tax evasion and tax fraud for the year in question.
4) Since no trusts are used for anything [except in rare cases should your tax
professional recommend them], ALL trust forms required by you to be filed with
the IRS are irrelevant.
5) If you are a NON-US citizen, it doesn’t mean you have clear sailing. Your
Government has similar laws and regulations you must deal with in a like manner.
Do a little digging and you will find the relevant information regarding your
country.

When you take your after-tax income and purchase the stock of a corporation, it becomes
the asset of the corporation and is no longer YOUR money. If it’s a public corporation
[e.g. IBM] you purchase the stock from a broker, and if it’s your “one-man” corporation
[one that you created] you fund the checking account and give yourself stock. Yes, you
have a claim on that asset because you are a shareholder, but as far as the actual cash
goes it doesn’t legally belong to you anymore; it’s the corporation’s. When the
corporation makes money, IF it’s in a tax-free jurisdiction, then nobody pays any taxes.
You don’t because it’s NOT your money. The corporation doesn’t because there are no
taxes that are required to be paid by the Government in the jurisdiction in which it is
domiciled. It doesn’t matter that you own 100% of the stock, are the only officer and the
only director. In essence it’s the very same as if it were in your own name, only
LEGALLY it is different.

The United States Government fully realizes this situation. That’s why they go to such
extreme lengths with their various forms they want you to file with the IRS and/or the US
Treasury Department. Let’s take a look at the structure that is created [Panamanian PIF
that owns 100% Belize IBC] and discuss what needs to be filed with the IRS or Treasury
Department. All IRS forms that are mentioned in this chapter can be found at the
following website:
http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

Panamanian Private Interest Foundation

A Panamanian Private Interest Foundation was created [by you] in Panama by your
Nominee Founder. What forms need to be filed for creating a foreign Foundation?
Answer: NONE

What IRS forms relate to foundations and in particular, private interest foundations? The
answer here is IRS form 990-PF; Return of Private Foundations. This form applies to

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DOMESTIC Foundations, i.e. those formed in the United States, OR Foundations that
have a “presence” [offices, charities, and active fund raising activities] in the United
States. The instructions for this form clearly state who must file this form: a) section 6033
(a) (b) (c) Foundations, b) section 6033 (d), c) those Foundations applying for exempt
status, d) Foundations making an election under 41(e)(6), e) Foundations making a
section 507 termination, f) section 4947 (a)(1) non-exempt charitable trusts treated as
Foundations. None of these apply to the Panamanian Private Interest Foundation;
therefore this form does not apply to you.

Forming a Panamanian Private Interest Foundation triggers no filing of forms of any kind
with the IRS, nor does it require you to subject the Foundation to filing status.

Belize IBC

The Belize IBC is created and 100% owned by the Panamanian Private Interest
Foundation. The Belize IBC will conduct ALL of your business. All forex and financial
trading as well as any online businesses that you may create are done within the Belize
IBC. Let’s look at all the relevant IRS forms and see what is required. How about the
personal 1040 form? Answer: there is nothing on the 1040 form that asks about IBC’s or
foreign corporations.

If you take money OUT OF an IBC, then as a US citizen you are legally required to
report this as income on the form 1040. The source does not matter. All that matters is
that you got money from somebody and it is reportable. Whether you do or not is entirely
up to you, but at least you know that you are required to do so.

[Note: Here is where a lot of people get in trouble. If you bring back money to finance
your lifestyle and can’t justify it to the Government, then you are in big trouble. For
example, if you bring back $100,000 per year and have a new Porsche in the driveway
and are living in an expensive house or condo and tell the Government you make $6,000
per year delivering pizzas at night, then you are going to have a problem. If, on the other
hand, you get an anonymous debit card and bring back a couple hundred bucks a week
from the local ATM to use as fooling around money, while you’re making and reporting
$70,000 per year to the IRS, then you can be pretty much assured that it will go
undetected [however, you are still committing tax evasion and tax fraud]. It all comes
down to a matter of degree. If you get stupid and arrogant, then you can count on
problems in the future. Be cool and smart, and keep the funds in question to a reasonable
amount you can justify based on your other income and you will have no problems.]

In essence, what is happening is tax DEFERRAL not tax evasion. What you do not take
out or bring back is not taxable until you do. Everything that happens inside the Belize
IBC happens tax-free with no income tax consequences for you.

Are there other IRS and/or US Treasury Department forms that deal with “offshore”
matters? The answer is yes; there are two forms that are relevant.

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The first is Treasury Department Form [TDF] 90-22.1; Report of Foreign Bank &
Financial Accounts.

One look at this form and it is clear the US Government wants to know everything about
your offshore accounts. [Remember, though, you don’t own any of the IBC; it is owned
100% by the Panamanian PIF and NOBODY owns it.] The key words on this Treasury
form are 1) do you have a financial interest in any account, and 2) do you have “signature
authority” or “other authority” in any account. It is clear in the first instance that the
technical answer is NO you don’t. For one thing, you don’t own [financial interest]
anything. Hell, nobody “OWNS” the PIF and it OWNS the IBC. What’s this got to do
with you? The second thing is that the Nominee Officers and Directors will have
“signature authority” on the IBC accounts. Where does your name appear? It appears
nowhere.

The key phrase in terms of this form is the “other authority” clause. Here the US
Government is clearly trying to use a “catch-all” phrase to encompass everything else
relating to a financial account. The “authority” they are talking about is clearly the ability
to communicate to a bank or brokerage account [in some other way] regarding the
dispensation of funds. It is clear then, that if you go ahead and get [and use] an
anonymous debit card for the Foundation or the IBC, you have “other authority”. So,
DON’T do it. You do not want anybody to be able to make the case that this “other
authority” exists. By getting a debit card you will do it for them.

Nowhere in TDF 90-22.1 does it say directly or indirectly anything about a trading
account advisory role. “Other authority” clearly refers to the dispensation of funds. When
you go on the internet to trade forex [or stocks, bonds, etc.] on behalf of the IBC, are you
communicating a desire to dispense the funds? No, you are not. You are merely
performing an advisory control over the trading activities of the IBC. When money is to
be moved and/or dispensed, you use the Nominees.

Think about this for a minute. If the above were not true, then every Investment Advisor
in the world would have to spend the entire year filling out Treasury Department Forms
[TDF]. They would number in the tens of millions. If I executed trades for a bank trust
department and the bank had 10,000 clients, it would mean that I would have to fill out a
TDF 90-22.1 for every single one of them because I had “other authority’ over the
accounts. Clearly, this is not the case

Remember, if done correctly, there is absolutely no link whatsoever between you and the
IBC. There is NO paper trail for money [from any source whatsoever], no forms, no
information, no nothing as far as links go. The US Government has no clue that the IBC
even exists, let alone the fact it is owned by a Panamanian PIF, where you are the
Protector. You only have contact with the PIF. The PIF in turn funds and directs the
Belize IBC through its Nominee Officers and Directors.

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The second is IRS Form 5471; Information Return of US Persons With Respect to
Certain Foreign Corporations.

This form is irrelevant since you have nothing to do with the Belize IBC. It is 100%
owned by the Panamanian Private Interest Foundation. You [as a legal entity] have
absolutely no ownership or control of stock in the IBC. Anything on this form has
nothing to do with you.

Those are all the forms that are relevant to the offshore structure. Clearly, the US
Government has made the TDF 90-22.1 the most important. Make sure you don’t trigger
the “other authority” clause by taking money out directly to yourself through wire
transfer or the use of a debit card.

CHAPTER 8
FUNDING YOUR OFFSHORE STRUCTURE

[Note: The information in this chapter is the opinion of the author. No representation or
warranty is given that the information is in fact correct. Examples used in this chapter are
hypothetical in nature and are presented as educational concepts for the reader. The
opinion of the author is given for the educational and/or informational benefit of the
reader, taken in the context of a hypothetical general discussion about offshore finance
methods.]

This is undoubtedly one of the most important chapters in this file. Please make sure that
you understand what is happening and why. Take your time and be methodical.
Remember, everything MUST be planned out in advance; it doesn’t matter how long it
takes you to implement your plan. If it takes 6 weeks, 6 months, or even a year, so what?
Where are you going that makes doing something stupid so inviting?

One other thing that needs to be mentioned is that the following models are only TWO
examples of proper funding schemes that might be implemented. There are many other
possibilities that could be used in conjunction with these ideas as well. Both models
could, depending on your particular situation, be combined or modified to some extent.
The important thing to keep in mind is the planning and detail BEFORE the
implementation. All of the service providers can be substituted if others are equal in
service, safety, and cost.

Model #1 is a hypothetical example of an offshore structure for someone who wants

everything to be perfect. This is the 10 out of 10 scenario for asset protection and privacy.
Here, cost is no object, every legal consideration [from a US citizen perspective] has been
considered, and paranoia is very high. Nothing is overlooked and every detail is thought
out and well coordinated. Assets and/or income for this individual should be at least USD
$100,000 for this model to be cost effective. That doesn’t mean, though, that it shouldn’t
be considered if you have less. Would you rather be building your infra-structure or
paying the money in taxes?

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Model #2 is a little different in that it mirrors the realities of the real world. A basic
structure [low cost and maintenance] for people with as little as USD $5,000 - $10,000 to
start. No consideration for the legal consequences, since THERE IS ABSOLUTELY NO
WAY THE US [IRS AND/OR TREASURY] GOVERNMENT WILL EVER BE PRIVY
TO ANYTHING YOU DO.

[Note: This needs a little explanation. As you will see shortly, this model uses techniques
that make it IMPOSSIBLE for the IRS or TREASURY to track the flow of either
information OR money. Unless you provide them with the details [highly unlikely unless
you get stupid], THEY ARE TOTALLY OUT OF THE LOOP. All of us, as individuals,
have different priorities regarding risk and staying within the laws of the jurisdiction in
which we are domiciled. Some people don’t care about the IRS, others live in fear. Some
care about Treasury Department forms, others could care less. You are somewhere
between these boundaries. It is up to you to figure out where you stand. This of course
means that anyone who adopts this model is committing tax evasion if not reported
properly.

An Overview

The Financial Crimes Enforcement Network [FinCEN] is the US Government agency

that tracks EVERY FINANCIAL TRANSACTION IN THE US OVER [AND
INCLUDING] $3,000. Signed into law by President Clinton in 1993, this is the 800
pound gorilla used by Treasury, the IRS, Immigration, etc. to track financial data. If the
money passed through or cleared the Federal Reserve System, by way of any financial
institution, then its transaction details are kept and known by FinCEN. Practically every
criminal/civil prosecution by the IRS or Treasury has INITIATED from FinCEN
computers.

If you are a US citizen, it is important to note, that every single check and wire transfer
[of USD $3,000 and over] you have ever made since 1993 is in a US Government
database [probably the same exists in the UK and Europe also]! If an IRS investigator
wants information on you, all he has to do is enter your name and Social Security
Number [SSN] into the FinCEN computers. If he checks and sees wire transfers in and
out of the US for tens of thousands of dollars; then goes and correlates this information
against your recent tax returns and finds you work at Pizza Hut as a delivery man making
$6,000 YOU ARE IN BIG TROUBLE.

In essence, FinCEN has become THE essential tool for tracking the flow of money. The
simple fact is that the Government knows people are sloppy and stupid. They are
counting on the fact you will give them everything they need to keep track of you. Every
business day there are tens of millions of checks and tens of millions of wire transfers
clearing the Fed, with information on each [of USD $3,000 and over] transaction duly
being kept by Uncle Sam.

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There are, though, some interesting observations that need to be made regarding this
information. First, it is very easy for FinCEN computers [even if they have trillions of
pieces of data] to sort out INDIVIDUAL people. How many people named Abe Strauss
bank at Wells Fargo and sent a wire to the Cayman Islands? This is pretty easy to find out
even if there are 50 people because then they go a little deeper and see a particular branch
in a particular city/state, etc. I hope you get the idea that it’s not that tough to figure out.
In a very short period of time they can link you to every $3,000 plus transaction you have
made.

Secondly, the vast majority of domestic and international wire transfers in the US occur
between CORPORATIONS. There are literally tens of millions of them every day. The
question becomes; what kind of information does the Government learn when Acme, Inc.
sends a USD $13,270 international wire to Global, Inc. at a foreign bank? The answer is
NOTHING. While they do know who you are [that’s easy to figure out], they have no
clue about the corporate transfer. It could be between two giant international corporations
for payment of an account or any number of ten thousand other things. More importantly,
there is nothing to link ANY INDIVIDUAL to either of the corporations. If you owned
Acme, Inc. how would the Government know? How would they know you own 100% of
Acme, Inc.? Practically all States in the US do not require a public list of shareholders for
domestic corporations. Even if somebody gets nosy and wants to find out more about a
specific transaction, what are they going to find? They don’t know what the business of
Acme, Inc. is or how big it is. Sure, some government snoop can check Acme’s tax
forms, but what does that prove without knowing who owns Acme? As for Treasury and
the IRS, without court proceedings, this isn’t going to happen.

If kept at a reasonable level, these corporate wire transfers are a viable way of
maintaining some sense of privacy and anonymity. Granted, they can be pierced by the
IRS and Treasury if they so desire, but it won’t be because of the wire transfer. In this
post 9/11 world, resources and manpower in the fight against terrorism at all levels is a
primary objective of the IRS and the Treasury Department. Your one-time [maybe] wire
transfer to the Management Services Company isn’t going to raise any “red flags” as long
as it doesn’t go to a country like Syria. If they do ultimately investigate you it will surely
come from something on FinCEN related to you personally.

MODEL #1

Creating the Domestic Corporation

By now it should be clear how to fund your offshore structure. Simply create a domestic
[Delaware] US corporation. If you don’t know how to do this then spend the time and
learn. Go to Barnes & Noble or Borders and look in the business section and you will
find many books that can guide you in starting your own corporation. You don’t need a
lawyer, anyone can easily do this. It will cost about USD $200 - $500 depending on
which incorporation service you use [or you can do it yourself] and which State you

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choose to Incorporate. Resident agent fees are about USD $150 per year [This is included
in the prices quoted in the Introduction.].

Simply create the corporation and begin doing business. You will need to get an
Employee Identification Number [EIN] from the IRS. They will give you one online in a
couple of seconds, or you can wait a couple of weeks by mail. Use your corporation for
any legitimate purpose. Its uses are only limited by your imagination [for example,
“consulting” or “precious metals dealer” or “financial management”].

To open a bank account you will probably need 1) a copy of The Articles of
Incorporation, 2) a copy of the list of Officers and Directors filed with the state, 3) maybe
a copy of the Original Document Certifying Incorporation, 4) a corporate resolution from
the Board of Directors giving permission to open the bank account [usually provided by
the bank] that is signed by the Corporate Secretary with the Seal of the Corporation
affixed, 5) the EIN of the Corporation, and 6) your ID as the signatory. All of these
conditions can be easily taken care of after incorporation.

Yes, you will need to file corporate tax forms with the IRS every year [form 1120-A, due
March 15 of the calendar year], but so what. Figure out how to give them a $1.98 every
year and they will be happy and leave you alone. You can’t keep filing year-after-year
with a loss or it raises “red flags” [The reason is that no legitimate business is in business
to lose money. If you go past 3 years of not making any money they become suspicious].

Of course the real reason you have the Corporation is to fund your offshore
activities at different time intervals, and with different amounts of money, anytime
you desire.

But to be totally safe, your Corporation needs to be in some kind of business. Anything
legitimate will suffice. As an example [and remember this is only ONE example], your
Corporation is named ABC, Inc. and it is in the precious metals and jewelry business.
You buy and sell precious metals and jewelry from the public. You should know that in
most States, where you may incorporate, they do NOT require you to pay for stock with
money. You can give yourself 100% of ABC, Inc. for “services rendered” or “intellectual
property”. The reason you don’t want to fund ABC, Inc. with cash from your checking
account is twofold: 1) to keep the Capitalization of ABC, Inc. as LOW as possible, and 2)
to prevent you from EVER having your money “mingle” with corporate money.

Basically, the IRS is not interested in US Corporations with [assets = liabilities + Capital]
LESS than USD $25,000 in Capital. You can file the short-form 1120-A when filing is
due [March 15 every year] and taxes are to be paid. The advantage here is that there is
NO requirement for financial statements. Just give them the income and expenses, figure
out the net, pay them $1.98 every year [money order ONLY], and they will leave you
alone.

The second point will prevent you from ever having to answer questions about ABC, Inc.
and your personal finances. There never can be an instance where some IRS agent says

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you are treating ABC, Inc. as your “personal” piggy bank. The fact is NO money
[traceable, like a checking account] EVER comes from you to ABC, Inc. and NO money
NEVER EVER is given back to you from ABC, Inc. in any way, shape, or form. As the
Sole Director and Officer of ABC, Inc. you take no salary and no fees in any way. The
ABC, Inc. checking account VERIFIES this.

[This point needs to be repeated so you get the message. No money link from you to the
Corporation and no money link from the Corporation to you. You don’t ever want
to use this corporate checking account as your personal bank account. NOT EVER.]

Now that you have ABC, Inc. properly incorporated you [as President] open a bank
checking account. How do you fund the bank account? You have two [2] choices; a) cash
[that you provide], b) money orders [anonymous money orders paid by you with cash].
Use the money orders about 90% of the time. Make copies of the money orders that you
deposit so that you have proof. Don’t go to the same place and get money orders. You
can purchase them everywhere. Have different people fill out the remitter portion so there
is different handwriting on the receipt copies. That’s it, nothing from you personally that
can be traced.

Granted, this is a pain in the neck and it will take a little time, and it will cost you a few
pennies to get the money orders, but it is well worth the time and expense. For ABC, Inc.
this money represents SALES [sale of precious metals and/or jewelry to the public]. Over
the course of 6 months [for example] you put USD $30,000 into the ABC, Inc. checking
account. Of course, this only represents sales; now you need expenses. Buying the
precious metals and jewelry cost you $29,000 [example]. That means you have a profit of
USD $1,000. Take away PROVEN EXPENSES [mail box fee, resident agent fee, annual
state filing fee, and corporate cell phone] of about USD $700 and ABC, Inc. has net
income of USD $300. Current corporate tax rate of 15%, and you send them a money
order for USD $45. That takes care of the business of ABC, Inc. and that takes care of the
IRS.

Great you say, but how does this tie in to getting the money offshore?

Well, there is one more step. After you deposit the cash or money orders into the
checking account of ABC, Inc., you wait a few days or week and let the deposit clear the
system so that you have cleared funds. Take about 95% of what you deposited and send it
to your E-GOLD Account through EuroGoldSales.

[Think for a minute what has been done here. You have created a U.S. Corporation that is
in the precious metals and jewelry business. You have receipts showing your sales
(money order copies, etc.) and you have receipts for buying [the cost of goods sold] the
precious metals (wire transfer receipts to EuroGoldSales). You report the net income
(after legitimate, proven expenses) and pay the tax due the IRS.]

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Creating an E-GOLD Account

Everybody should have an E-GOLD Account. It is the safest, most secure, private [if you
choose ANONYMOUS], and fastest way to make money move. In addition, NO
transaction can ever be REVERSED. There is no ID check to register, and if you desire,
you could put anything in the user name, company name, and telephone fields. You can
create an E-GOLD Account in a matter of minutes. IN ESSENCE, IT IS AN
ANONYMOUS NUMBERED ACCOUNT IN GOLD. The only way to get access to
the account is to know the “pass-phrase”. Make sure you use the entire ASCII alphabet
[256 letters, numbers, and symbols] in your pass-phrase to make it totally impenetrable,
and NEVER EVER tell anybody your pass-phrase. When you make a transaction with E-
GOLD make sure the webpage is SSL-encrypted [a lock in the lower task tray] and when
you verify your pass-phrase make sure you are at the E-GOLD website.

Worried that any Government will put the heat on E-GOLD to get to your transaction
history? Don’t because E-GOLD is domiciled in Nevis, ONE OF THE THREE
TOUGHEST OFFSHORE JURISDICTIONS in the world [see chapter 1].

Of course, you need a third party entity to get the gold into your E-GOLD Account and
that is where EuroGoldSales comes into the picture. There are plenty of reputable
merchant providers who can do this [see http://www.e-gold.com website under E-GOLD
Directory], but you do NOT need to establish an account with EuroGoldSales to buy or
sell gold. Every transaction is a unique event and treated as a singular purchase or sale. It
makes no difference if you use them once in your life, or you use them once a week. To
put icing on the proverbial cake, they are located in Gibraltar [tax haven] and have their
own set of secrecy laws. You can be assured that your transaction is private. The
following link will take you to their website:
http://www.eurogoldsales.com/

You have now created your E-GOLD Account and funded it with wire transfers from
ABC, Inc. through EuroGoldSales. You have precious metal [gold] in your account; so
now what?

Choosing the Offshore Bank for the Panamanian PIF

When choosing a bank oversees that has the Panamanian PIF bank account, it is
important to choose a bank that will accept a) different types of incoming payment
schemes, and b) dollar amounts as little as USD $1,000. For example, in addition to wire
transfers from your US Domestic Corporation, does the bank take deposits from E-
GOLD, or Western Union? Can you send just USD $1,000?

Become familiar with the following bank located in the offshore jurisdiction of St.
Vincent. St. Vincent has an excellent online banking services sector, backed up with
extremely tough bank secrecy and privacy laws. Please follow this link:
https://www.loyalbank.com/eng/index.html

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When you surf this website you will discover that LoyalBank will take an INITIAL
deposit of only USD $920 to open a corporate account [This is the lowest you will find].
The following link will prove this:
https://www.loyalbank.com/eng/account_open_corp.html#first

MOST IMPORTANTLY, LoyalBank ACCEPTS E-GOLD and converts your

deposit into any of the major currencies. Please see the following link:
https://www.loyalbank.com/eng/prod_add_exchange.html

LoyalBank is a registered and licensed Bank with the International Financial Services
Authority [IFSA] in St. Vincent and the Grenadines. Follow the link to the website
verifying the license of the bank:
http://www.stvincentoffshore.com/fin_institutions.htm

A Step By Step Approach

Step1
You created your own US Domestic Corporation [most likely Delaware, but it can be in
any state as long as that state does not make public a list of shareholders. Check and
make sure if you don’t use Delaware]. In this example, it was called ABC, Inc. You then
got an EIN from the IRS and opened a bank account. You fund the bank account with
cash deposits [nothing more than a thousand dollars at a time and at different branches]
or preferably money orders made out to ABC, Inc. [postal or any other and put anybody
for the remitter and use cash to purchase the money order]. All corporate mail will be
sent to a corporate mail-drop [Mail Boxes Etc., UPS Store, etc.] NOT your house.

Step 2
You opened an E-GOLD Account. What you choose to put in the name, company, and
telephone fields is up to you. If you are super-paranoid use an alias. If you want to use
your own name and company that is fine since E-GOLD is in Nevis and the website is
SSL-encrypted. You have a much better chance of getting hit by lightening than anyone
finding any information about your E-GOLD Account. [Note: There are NO reporting
requirements whatsoever from the IRS or Treasury Department concerning the
ownership of gold. EuroGoldSales is NOT a financial institution and you do NOT
have or maintain an account with them. Doing business with EuroGoldSales does
NOT trigger the filing of ANY forms with the IRS or The Treasury Department.]

Step 3
You start funding your E-GOLD Account with purchases of gold through EuroGoldSales.
You wire transfer them, at intermittent intervals a few days after the deposits clear,
varying amounts of money UNDER USD $3,000 per wire transfer [One time USD $
2,900, then 6 weeks later USD $1,950, then three weeks after that USD $ 2,257, etc.].
You are doubly protected here because of two important items; 1) you’re using ABC, Inc.
to wire the money [corporate anonymity], and 2) less than USD $ 3,000 does not trigger

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bank reporting to FinCEN. In other words, you are off the radar map and are operating in
STEALTH mode.

Step 4
When you have enough gold in your E-GOLD Account to go offshore, you contact
Maritime International, Ltd., located in the Seychelles [website listed in chapter 5] and
get the ball rolling on the creation of your Panamanian Private Interest Foundation [PIF],
which owns 100% of the Belize International Business Company [IBC]. Ask the people
at Maritime if you can pay for their services in E-GOLD [bank wire is always
preferred but ask anyway]. After these entities are created and the Nominees are in
place, they will send you information regarding reputable bank and/or brokerage houses
that your PIF and IBC can do business. Check and see if the bank (s) they recommend are
as good as LoyalBank and if they offer comparable services. Make a choice where to
place the bank account of the PIF making sure they can take deposits from E-
GOLD.

Step 5
LoyalBank [or some other offshore bank if you prefer] is taking your deposits of E-
GOLD. When this PIF bank account gets big enough, it is time to open and fund the
Belize IBC with its own bank account at a DIFFERENT BANK IN A DIFFERENT
JURISDICTION. Please follow the link to Barrington Bank in Antigua:
http://www.barrington.ag/WebOffice3/default.aspx

Maritime can easily handle the details. From the IBC bank, the money goes to the
opening of the brokerage account. Again, Maritime will give you some choice
recommendations for brokerage services. Make sure they are as good as Thales
Securities, located in Panama. Follow the link to check them out:
http://www.thalessecurities.com/index2.html

Step 6
You are ready to trade online forex [or anything else] at the brokerage house.

Appendix E contains a schematic diagram of a properly layered offshore plan [model

#1]. In section B of the schematic, some people may substitute the Nevis FAPT for the
Panamanian PIF. Notice the different jurisdictions that have functions outside where they
are formed. Notice also, that all management services are performed by entities outside
the jurisdiction of their function.

The Analysis

What, if any, tracks did you leave in your quest to move funds offshore? Well, you have
some ABC, Inc. corporate wire transfers that went to EuroGoldSales for the purchase of
gold. If you use these wires to buy gold and then have ABC, Inc. use them as cost of
goods purchased, you mark them up for resale to the public [your deposits] and show the

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difference as profit. You now have a registered US corporation doing legitimate business
and paying taxes. This is just one example; there can be many others as well.

You may, depending on your management services company, have an INITIAL wire
transfer to them for getting your PIF and IBC created. After the first year, this can be paid
out of the PIF or IBC bank account directly to them, thus avoiding the US banking
system altogether [if, of course, they don’t take payment by E-GOLD]. A one-time wire
payment isn’t going to raise any “red-flags” if this is the only choice you have.

Any other tracks? ABSOLUTELY NONE! Everything else is done outside the
jurisdiction of the United States banking system. NOBODY inside the US knows
anything about 1) your E-GOLD Account [maintained in Nevis], 2) your PIF and the
LoyalBank account, 3) the creation of the Belize IBC and its bank account, or 4) the
Belize IBC brokerage account.

This needs to be shouted!! Do you realize that you have just funded your Panamanian
Private Interest Foundation bank account in St.Vincent with an E-GOLD Account
[Nevis] that NOBODY in the US, EU, UK, France, Spain, or anywhere else has ANY
INFORMATION ABOUT WHATSOEVER? This has taken place outside the
jurisdiction of the US. Do you now realize the significance of funding your E-GOLD
Account through the business of ABC, Inc.?

MODEL #2

From model #1, you learned several key things that are important in an offshore strategy.
First, create your E-GOLD Account [whether you want to use an alias or your real name
is up to you; just remember that the only thing that matters is the PASSPHRASE. The
person who knows this owns and controls the gold!]. Second, find a licensed, reliable
offshore bank that will take deposits via E-GOLD. There may be others, but LoyalBank
is at the top of the list.

You now have the E-GOLD Account set up, so the question becomes, what is the most
viable way of funding small purchases [USD $500 - $1,500]?
[Note: This funding method can easily be incorporated in model #1 if you so desire.]

Please visit the following SECURED website and give it a good surfing session:
https://www196.ssldomain.com/goldage/

Gold Age is another reliable third-party exchanger for funding an E-GOLD Account.
Now here is the kicker: YOU CAN MAKE DIRECT CASH DEPOSITS AT BANKS
IN THE US, INDIA, MALAYSIA, THE PHILLIPINES, AND SINGAPORE. That’s
right, direct cash [meaning anonymous] deposits to fund your E-GOLD Account. In the
US, you can make your cash deposit at the following banks: Fleet, Wachovia/First Union,
Washington Mutual, Bank of America, Wells Fargo, US Bank, and Bank One (very slow

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bank). If you live in an area that has any of these banks, then you are good to go. You are
limited by Gold Age to depositing USD $2,500 per day.

[Note: Through a Gold Age affiliate www.asianagold.com the following banks take cash
deposits in the other countries listed: Malaysia – Hong Leong Bank; Singapore – OCBC
Bank; Philippines – Metro Bank; India – HSBC (HongKong Shanghai Banking
Corporation).]

[Note #2: If you live in an area that doesn’t have these banks, don’t worry. Gold Age
accepts Postal Money Orders [by mail] anonymously. You simply tell them the E-GOLD
Account number to place the gold into. It takes a little longer, but it’s as good as cash.
Please contact them for details if you choose this option.]

Now, before you can make cash deposits, Gold Age has a “verification” program. What
this entails is filling out a small e-form giving them 1) your name and address and a
LAND-LINE phone number [no cell phones], and 2) your E-GOLD Account number.
They will ask when you can be contacted [by phone of the number you provided] for
“verification”. Simply fill in the best time to call you and they will call within 1 or 2
business days.

So, what’s this “verification” all about? NOTHING, that’s what. A person from the
customer service department will call and ask for you. After you say “Hi” they will tell
you that this is for cash and wire transfers ONLY. There, you’ve been “verified”.

[Note: It’s not clear if they do any checking of your name and phone number. Maybe
they do or maybe they don’t, I don’t know. If you use an alias and a cell number I can’t
say what will happen. If you are so inclined, try it and see what happens. Remember,
what they are doing is connecting a name and an E-GOLD Account number to a cash
deposit. That’s it from their perspective.]

You might also want to consider becoming a member of Gold Age. You get better
customer service, a 1% reduction in fees, and quicker funding of your E-GOLD Account.
The cost is USD $59.85 [one-time].

After verification, you are now ready to fund your E-GOLD Account with a cash deposit.
At the Gold Age website go to the “buy gold” section and choose to buy gold with a cash
deposit. FOLLOW ALL THE INSTRUCTIONS ON THE FORM PRECISELY. Go to
the bank and make the deposit; if you are a member, within 24 hours your E-GOLD
Account is funded.

It’s time to “kill two birds with one stone”. Remember from Chapter 1 the three [3]
jurisdictions that were mentioned? Well, there is another that almost makes the list and
that is St. Vincent & The Grenadines. The ONLY reason they didn’t make the A+ list for
IBC incorporation is because they only grant total tax-free status for 25 years. Nobody
really knows what that means, though, since they only passed offshore IBC legislation in
1996. In ALL other respects they would make the list.

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In a perfect world, wouldn’t it be nice if the offshore bank you wanted to do your banking
at could help you create your offshore IBC? This would lower the fees and eliminate the
need to do the paper work twice [Management Services Company doing the IBC and then
the introduction to the bank, with a fee of course, and then the same due diligence
information to the bank.]. Just to make the dream perfect, you could pay for all the
services needed to create and implement your IBC with E-GOLD. No need for wire
transfers! Of course, your new IBC would be able to make deposits at the bank with E-
GOLD.

In model #1, LoyalBank [St. Vincent] was used strictly as the bank account for the
Panamanian PIF, thereby funding the Belize IBC. But LoyalBank can be so much more
than just a bank. Please go to the following website:
https://www.loyalbank.com/eng/prod_add_gbp.html

You have just discovered the power of LoyalBank. On this webpage is the information
regarding LoyalBank’s Global Business Package. THEY HELP YOU CREATE YOUR
IBC, IN ST. VINCENT, AND THEN OPEN YOUR IBC’S BANK ACCOUNT.
EVERYTHING CAN BE FUNDED WITH E-GOLD! Cost of doing this is about USD
$1,200 with annual maintenance fees around USD $400 per year.

Once your bank account at LoyalBank reaches a level that you feel comfortable opening
the IBC brokerage account, it’s a simple wire transfer to the brokerage house. Since your
money is offshore, there should be no fear using wire transfers at this juncture.
Everything escapes the US banking system completely!

A Step by Step Approach

Step 1
Open your E-GOLD Account and make it anonymous.

Step 2
Get “verified” at Gold Age.
https://www196.ssldomain.com/goldage/

You are now ready to make cash deposits at one of their banks to fund your E-GOLD
Account.

Step 3
Contact LoyalBank and get the ball moving on establishing your St. Vincent IBC. From
start to finish [IBC creation and opening the bank account] it will take about 2 weeks.
Everything can be paid with E-GOLD.

Step 4
Fund your new IBC bank account at LoyalBank with E-GOLD. They will accept E-
GOLD deposits up to USD $1,000 per day.

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Step 5
Create and fund your IBC brokerage account when appropriate.

The Analysis

There is only one consideration to think about. Where are the tracks that point to you?
You have an anonymous E-GOLD Account that is funded by depositing CASH in a bank.
From there, it’s a totally secure and anonymous transfer to the IBC banking account at
LoyalBank. THERE IS NO PAPER TRAIL OR MONEY TRAIL ANYWHERE!

The worst case scenario is that somehow somebody will find out about your dealings
with Gold Age. Even if they do, what does that mean? It means you funded an E-GOLD
Account so that you could spend money. Where is the offshore connection? Where is the
evidence [paper or money] you have an offshore account? Where are the wire transfers
out of the country? Where do the Feds think they have a case against you? THERE IS
NONE!

It’s obvious the beauty of this model is 1) its simplicity of design and cost, and 2) the
complete privacy and anonymity in transferring money to your IBC outside the
jurisdiction of anybody in the U.S.

The drawbacks are twofold. First and foremost, IF NOT REPORTED you would be
committing tax evasion and failure to file necessary US Treasury Dept. forms. If caught,
you would face serious penalties and possible incarceration. Secondly, if you have large
amounts of money it will take considerable time to effect and implement. It is simply up
to each individual to evaluate their own personal circumstances before implementing any
offshore method.

CHAPTER 9
REPATRIATING MONEY AND KEEPING THE IRS HAPPY

You got the brokerage account opened and you are trading successfully. At some point
in time you are going to want some money flowing back to you. You have one of two [2]
choices to make. The first is to NOT report the money coming back to you as income and
the second is to report the money as income. You have to do one or the other.

Make no mistake about this next sentence. Any money you personally receive, regardless
the source, has to be declared as income. Now, just because the Belize IBC [or the St.
Vincent IBC] earned USD $500,000 last year trading, doesn’t mean you owe any taxes.
When you bring back some of that money for yourself, then what you bring back is
taxable. So if you brought back USD $70,000 you would pay income taxes on this
amount.

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The first option is only valid if you a) want to take your chances with the IRS and b) are
willing at some point to drop-out of the Government database system. This, pure and
simple, is tax evasion and if you are caught it will land you in big trouble. If you choose
this option, the key in getting caught or not probably lies in whether or not you can justify
your living standard based on your US earnings. If you get a debit card and take cash out
at ATM’s and use this money for eating and/or shopping and it doesn’t amount to much
in relation to your earnings, then you are probably safe from scrutiny. If, on the other
hand, you can’t justify your lifestyle based on what you report to the Government and are
called upon by the legal system to do so; then you have a problem.

For those who trade for a living, the second option is the only viable long-term way to
manage your affairs [unless of course you completely drop-out of sight of Government].
You simply create another IBC in some other jurisdiction [Nevis perhaps] and have the
brokerage account wire money to its bank account, which is used to pay you. You report
to the IRS that you received income from the Nevis Company. Call the income advisory
fees, consulting fees, computer software design fees, corporate security design fees,
whatever you want. Since you are reporting the money as income, you will have no
problems. If you wire the money into your personal account here in the US, that money
will match what is reported to the IRS.

These decisions are left to the reader.

Again, please see Appendix E for a proper schematic.

CHAPTER 10
COMMON SENSE AND JUDGEMENT

This chapter is all about the little things that you need to do over the months and years
that may follow your going offshore. They should not to be taken lightly. I am dead
serious when I say –“Hey, pay attention to this list”.

1) Keep your mouth shut about your offshore activities. Don’t brag to friends or
relatives about your offshore bank account, the US Corporation, the anonymous
debit card, or your trading account. You have no idea how these types of “loose
lips” can come back to haunt you in the future. Resist the urge to be a big-shot
and keep it to yourself.
2) Keep your US Domestic Corporation [ABC, Inc. in the example] “clean’ and
current with the State you incorporated. Account for EVERY cent in this
corporation. NEVER pay the taxes [State, local, or IRS] from the corporate
checking account; ALWAYS use a money order. Only use verifiable, legitimate
expenses you have receipts.
3) Read Chapter 8 and 9 again and again.
4) Do NOT name your Foundation, IBC, or Domestic Corporation after yourself,
any person or family. Forget the Jim Smith Family Foundation and go for
something like The Galaxy Orion Foundation. Don’t be stupid about this point.

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 5) Take your time and be methodical. Go back and look at Appendix F again. Follow
the link to all the criminal and civil complaints. One common thread in all of them
is the sheer stupidity of the defendants. Regardless of what they each had done,
they all made costly mistakes in planning and implementing an offshore strategy.
6) Do not put tangible assets [house, car, boat, rental property, stock in your US
Company, etc.] from the US [if you are a citizen] in the name of your PIF or IBC.
This is one of the most common and dangerous things you can possibly do to
destroy your offshore structure. Why would you lead every lawyer in town to the
name and jurisdiction of your structure? Do you think you can convince a judge
that your house is owned by a Panamanian PIF and that you have nothing to do
with it? You can’t and the court will not recognize your defense. Many people sit
in jail until they tell the judge how and where to get the money. Don’t screw
yourself.
7) When you finish all the incorporations, you will receive many documents by
courier. Do not let these documents fall into the wrong hands or you are toast.
While you may need these documents in the future, in the US they are very
incriminating. Find a very safe and secret place to put them.
8) Do not use a debit card that is attached either to your main offshore bank account
or your offshore brokerage account. If the card is hacked, lost, or stolen you may
lose your entire account. Also remember, you may invoke the “other authority”
clause [TDF 90-22.1] if you have such a card from the PIF or IBC accounts. A
safer alternative is an anonymous debit card at another institution or a stored
value card that is funded by wire transfer or e-gold. Your risk is only what’s on
the card, not your entire financial account. Also, you can use this other IBC to
satisfy reporting requirements to the US Treasury and the IRS.
9) Realize that your offshore structure is good for LIQUID assets only. Money can
and is moved at the speed of light. A couple clicks of the mouse on a secure SSL-
encrypted website and your money is on its way. Money always moves faster than
Government. Make sure you keep the advantage.
10) Do NOT bring large amounts of cash back into the US without first figuring out
how you are going to explain its source. Do not under any circumstances
jeopardize the integrity of your offshore structure. Read Chapter 9 again.
11) If you are making your living by trading, then you must create another structure
[an IBC that is NOT in Belize or St. Vincent] that can pay you so you can report
what you receive as income to the IRS. For example, let’s say you make $300,000
trading forex in a year. You need $80,000 to live your current lifestyle, so you
create an IBC in Nevis and open a bank account in Antigua. This Nevis IBC with
its Antigua account will pay you a “consulting fee” that you report to the IRS as
income. Your Nominee Officers can sign the consulting agreement to show you
have the relationship. This way the bulk of the forex earnings are protected and
you won’t be hassled by the IRS because you are reporting the earnings you need
to live on. Even if the IRS gets interested in you, what do they have? You’re
reporting the payment. All they have is a bank account in Antigua that pays you.
So what, you are reporting it. Read Chapter 9 again.
12) If you are making your living by trading and you don’t adopt item #9 above [or
something similar to your situation], then your only other choice is to completely

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 drop off the government radar screen. This may involve moving oversees, having
nothing in your name, or owning any property at all. The fact is, if you can’t
justify your lifestyle, and the IRS finds out about you, you are in big trouble.
13) Don’t put your entire liquid net worth offshore. If you have $1 million in cash or
cash equivalents, do you really expect some judge or jury to believe it’s all
offshore and you have nothing to do with it? Use your offshore structure to a)
grow assets over time, b) create business income that has nothing to do with
anything in the US, and c) shelter an emergency nest-egg should the need arise.
Don’t be stupid.
14) For your safety and security use encryption for your email and your computer
hard drive. Hushmail [free] is good for email and PGP [about $100 USD] for your
computer system. If you don’t have a good grasp of encryption principles or how
PGP works, then spend some time learning about the product.
15) Use mail-drop services from your management services company. Under no
circumstances do you want bank or brokerage statements sent directly to your
address. Have them couriered to you every quarter or so by FedEx or DHL. After
you verify the contents shred them.
16) Finally, ALWAYS remember that unless you are willing to drop off the face of
the earth, you must make it appear that what you have in the US is ALL you have,
and that it is BELIEVABLE.

CHAPTER 10 (Continued)
DEBIT CARDS AND OTHER USEFUL THINGS

[Note: The author has no third party relationship of any kind with Loyal Bank,
EuroGoldSales, Thales Securities, e-gold, or any bank providing an anonymous debit
card. The author does not have any financial relationship with any of the offshore service
providers named above in any manner. The use of any of these offshore service
providers, in any offshore structure, is of a hypothetical nature and for educational and
informational purposes only, and in the general construct of a discussion of offshore
finance.]

E-GOLD has been covered in a prior chapter and really needs no further explanation. If
you can’t see the many benefits it unleashes in your offshore strategy then there is little
hope you will gain any expertise in any offshore strategies.

The use of anonymous debit cards raises some serious security issues relating to your
offshore strategies. Do NOT link a debit card to your MAIN offshore bank and/or
brokerage accounts. If push comes to shove, they will trigger Treasury reporting
requirements and/or compromise the security of the very offshore account you worked so
hard to form. Fund an anonymous debit card that isn’t linked to a bank account. Here are
some examples:
http://www.mygcard.com/
http://www.slogold.net/debitcards.html
http://www.freedom-cards.com/index.htm
http://www.sovereigngoldcard.com/index.html

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It is important to remember that these are NOT bank accounts with debit cards attached
to them. These are stored value cards and are good only for what is funded into them.
Fund them with E-GOLD and use them at ATM’s ONLY.

One other useful product you should consider is for your computer system. It may have
crossed your mind that Government and/or lawyer snoops may someday want access to
your computer system. Why? Of course, to do a diagnostic analysis to check your files
and cache to see where you have been web-surfing and what you have been downloading.
What are you going to say to some Government snoop when he informs you that
according to your computer system, you’ve been spending a great deal of time at a certain
IP address that belongs to a foreign brokerage house? Your computer verifies this fact
and you are toast.

The following link will take you to the homepage of “StealthSurfer”:

http://www.stealthsurfer.biz/index.html

This is a great product that will give you peace of mind when you are trading forex in that
offshore brokerage account, conversing with your bank (s), or sending private emails to
your management services company.

CHAPTER 11
UPDATED ADDITIONAL CHAPTER JULY 8, 2006
SOME NEW DEVELOPMENTS

It is now possible to implement your entire [or partial] offshore strategy in one place!
That’s right; you can now have the IBC or PIF, or both from one source. In a previous
chapter I mentioned Thales Securities, located in Panama. Here is the link:
http://www.thalessecurities.com

Thales is my personal choice for the offshore brokerage house. They are registered, safe
and honest. If you trade forex, they clear through Saxo Bank and use the Saxo trading
platform.

Thales can now form your PIF and or Panamanian IBC. Either separately or bundled
together for utmost privacy, they can now do everything in-house through their
proprietary management company. Their lawyers will form everything and then you can
open a brokerage account; you don’t NEED an offshore bank!

Before I go further, let me back-track a little and fill in some details. First, a Panamanian
IBC is, for all practical purposes, the same as an IBC in Belize. Granted, theoretically
you would not have a layered structure, but the practicality of the situation merits serious
consideration unless you are totally paranoid. All of the safeguards you find in Belize you
find in Panama. Second, their fees are competitive with other management companies in
Panama and other jurisdictions.

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Now, as we all know, an e-gold account can be as anonymous as you want to make it.
Unless you start to transfer millions of dollars through an e-gold account, you aren’t ever
going to have to produce ID documentation to support your account. What if you created
an e-gold account with the name of your IBC?

Here’s why, and this is really an exciting development within the offshore community.
THALES WILL TAKE THE REDEMPTION OF YOUR E-GOLD BY WIRE
TRANSFER [FOR EXAMPLE, FROM EUROGOLDSALES] AND DEPOSIT IT
INTO YOUR BROKERAGE ACCOUNT. IT WILL ONLY DO THIS IF THE E-
GOLD CAME FROM THE IBC OR PIF ACCOUNT.

You will definitely NOT find this information on their website, yet they will do it. You
have to request this service and then they will provide it. You can give them any story
you want as to why you want to do this, but by far the most credible is that you have an
internet business [where people pay with e-gold] and you wish to by-pass the US banking
system. They will certainly understand this criteria.

So, here is what you do step-by-step.

Step 1.
Read and implement the information in ‘Vegas Special File #1’. At the very least, make
sure you understand how e-gold works and why it’s important to safeguard your privacy
when using your e-gold account.

Step 2.
Create an e-gold account and in the company name put your anticipated IBC or PIF
abbreviated name. For example, [and this is just an example – don’t use this] you plan on
naming your IBC “Ashtonex S.A.” So, create an e-gold account and name it “Ashtonex”.
Now, you can fund this account using any of the ideas presented earlier, or you can use
this idea: sell your domestic US Corporation e-gold to “Ashtonex”. Again, make sure
you cover your tracks with e-gold by reading and understanding the section of ‘Vegas
Special File #1’ that deals specifically with e-gold.

Step 3.
When you are ready to implement your offshore strategy go to the following link:
http://www.thalessecurities.com

Somewhere on their homepage you will find a link to the secured online chat. Contact
customer support with your questions and get your offshore strategy in gear.

At this point, they will need payment for whatever offshore entity or entities you create.
Unfortunately, they will not accept e-gold for payment. However, this isn’t that big of a
deal because you can use your US Corporation Account to make the wire transfer, and
the amount of payment falls under the FINCEN radar screen [USD $3,000]. Even if you
create both an IBC and a PIF, and the services amount to more than $3,000, you can
always send two wires [one for the IBC and one for the PIF].

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You will find that the ID requirements required by Thales Securities [to open an account]
are not very strict by offshore standards. That’s not to say they are “loose”, just that they
don’t go overboard in finding out about you. You will need the following:
1) Notarized copy of drivers license [US] or Passport,
2) A reference letter from a bank,
3) A reference letter from a business associate [Commercial].

Now, before you think the last two are hard to get, please understand that they only want
these things because the US Government has put pressure on the offshore community to
“know your customer”. The fact is, the bank reference letter only has to be on bank
letterhead, addressed to “Whom it may concern”, and the letter only needs to say that A)
you have had an account since X, and B) your account is in good standing. That’s it,
nothing else [to my knowledge]. Have the letter signed by the Branch Manager or the
Assistant Branch Manager. You should have absolutely no problem getting this from any
bank. If they ask, just tell them it’s for opening a brokerage house account.

The Commercial letter just needs to say that he has known you for X, had business
accounts with you, and that your account is in good standing. That’s it, nothing else. To
the best of my knowledge, there is no follow-up on the reference letter [or the bank letter
for that matter]. They have better things to do like open your account!

[Note #1: Please keep this in mind as you fill out the account papers at Thales. JUST
BECAUSE THEY ASK A QUESTION DOESN’T MEAN YOU HAVE TO
PROVIDE AN ANSWER. Nobody offshore really wants to know, but because of Uncle
Sam, they have to ask annoying questions like, “Where does this money come from?” If
you open an account of less than US $ 250,000 they could care less what you put on the
account application.]

[Note #2: You should be prepared to put, at the very least, US $ 35,000 into a forex
account. If you put less, you will not be allowed to trade through the Saxo trading
platform interface. This may change over time, but as of right now I believe this is the
minimum.]

Step 4.
Once your account is open, you can fund your brokerage account by selling your e-gold
to a third party exchanger [for example EuroGoldSales] and having them wire the
proceeds to Thales. Since the e-gold is being sold out of the “Ashtonex” account,
EuroGoldSales will send the wire to Thales [or anywhere you want] showing the remitter
as “Ashtonex”, which is of course the name of your IBC. Thales will accept this wire
because it came from you.

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 CHAPTER 12
FINAL THOUGHTS

The assumption has been throughout this file that you are a US citizen. If you are not,
then your country probably isn’t far behind the US in clamping down on your right to do
with your money as you see fit.

This file didn’t attempt to cover any of the multitudes of business strategies that can be
implemented with the Belize IBC or the St. Vincent IBC. Please remember, though,
business activity is the dominion of the IBC and the Panamanian PIF is used only as a
holding company for assets.

Take your time in educating yourself about all the things presented in this file. If you do
not understand something that was presented, then take the time and learn all you can
about the subject matter. Break this process, of going offshore, down into steps you can
follow and implement. Chapter 8 gives two examples in a step-by-step approach for each.
Realize that you aren’t going to be offshore by next Tuesday; so slow down and be
methodical.

Don’t make the assumption that just because you think you have a foolproof offshore
plan, that you want your Government knowing anything about what you are doing. Just
look at the people who used trusts. Foolproof until there standing in front of a judge. The
blunt truth is that no matter what you construct, your Government isn’t going to like it
one little bit. They aren’t going to sit there and just take it. Most likely, if you get
careless, they will simply invalidate the FORM and concentrate on the SUBSTANCE of
what you did. DON’T LEAVE THEM ANY TRACKS TO FOLLOW. Do I really need
to repeat this? Yes, you have probably got a great plan, but don’t be stupid and leave
ANY tracks for the FEDS, or anybody else, to pick up and build a case against you. Your
legal arguments aside, this is the most important thing I can tell you as you finish this
file.

The last thing to be said is to reread some of the legal cases provided in the link in
Appendix F. Regardless the merits of the cases, just the sheer stupidity of the defendants
ought to make you pause and think. Ask yourself if anything you do looks familiar in
these cases.

Go forth and make millions offshore.

-vegas

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 APPENDIX A

Panama Private Interest Foundation Information

INTRODUCTION TO THE PRIVATE USE PANAMA FOUNDATION

The concept of a "Foundation" began during the Roman Empire, under the influence of
Christianity. As an example, the Catholic Church was considered a divine foundation,
and the various sub-organizations within the church had the legal control for
administrating its' patrimony. The original foundations were not created for serving a
private need for a specific individual or family, rather they were formed for serving the
needs of a community. Several centuries later, the legal entity denominated as a
"Foundation" continues to exist and is widely used and accepted around the globe for
personal and private needs.

The concept of a "Private Interest Foundation" began when the Principality of

Liechtenstein created the "Law of Persons & Companies", the 20th of January, 1926
(Personen und Gesellschaft Recht - P.G.R.), which created the "Family Foundation", (for
the private benefit of the members of one or more families) and the "Mixed Foundation"
(for the private benefit of not only families, but also for other persons or institutions).

Historically, wealthy families in Europe have established Family Foundations

incorporated in the Principality of Liechtenstein (a Neutral jurisdiction for purposes of
wars, etc.) for the purpose of estate-planning necessities, to ensure the safe transition of
assets to the family's beneficiaries. Today, Liechtenstein Foundations can cost upwards of
US$25,000 to incorporate, and up to US$10,000 per year to maintain.

The Republic of Panama inspired in the laws of Liechtenstein adapted the European
model to create a Private Interest Foundation more modern and flexible, with clear
advantages for the protection of assets and international tax planning and empowered to
carry on transactions.

The Panama Private Interest Foundation is a type of entity that is a cross-breed between a
trust and a corporation, however, it is neither. A Foundation is an entity that is different
from any other legal entity known in Anglo-Saxon law because it is not the legal
personification of a person or group of persons (as with a corporation), rather it is a legal
entity that does not have owners (share-holders, participants, or partners), and it
traditionally has a specific purpose for the benefit of a general group of individuals.

The Private Interest Foundation is a juridical person, which is equipped by its Founder
with assets which constitute a separate patrimony of the Foundation, after their
transference. These properties are managed by a Foundation Council, which is named by
the Founder with the purpose to accomplish the objectives of the Foundation.

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A Private Interest Foundation, as juridical person with its own patrimony, has the
capacity to execute rights and acquire obligations. The Private Interest Foundation does
not have shareholders or members. It is created by a declaration of the Founder and
generally has as purpose the preservations of an established patrimony for benefit of the
Founder or third persons.

The Private Interest Foundations are instruments for the planning of family successions
may act as shareholders of assets and help to preserve the patrimony for beneficiaries’
generations. Panama has a long reputation for providing offshore services to the
international community. In an effort to provide additional opportunities in this area, Law
No. 25 of 1995 was enacted. Said Law contains the procedures and requisites for the
creation of Private Interest Foundations in the Republic of Panama.

USES OF PANAMA FOUNDATIONS

Panama Private Interest Foundations may be established for the benefit of a person or
persons, a family, or a specific social purpose. In general, Panama Private Interest
Foundations are used by people who wish to control and maintain ownership of foreign
corporations; however, they do not wish to own their corporations themselves directly,
due to the Controlled Foreign Corporation (CFC) rules in their home countries. Several
highly taxed countries such as the UK, Canada, USA, Australia, New Zealand, France,
Italy, Spain, etc. have CFC rules which require that their citizens submit declarations
(reports) to the appropriate tax authorities, in which they declare that they are the
shareholders of such foreign corporations.

Instead of holding the corporations' shares in their personal name or in bearer form, they
establish a Private Interest Foundation in Panama that holds or owns the shares of their
foreign corporation(s), thus avoiding the CFC reporting rules. Hence, the advantage of
using the Foundation as a shareholder for their corporation is to remove ownership from
one's personal name (or through a Bearer Share arrangement), and transfer ownership to
the name of a foreign entity which does not have owners, rather has privately appointed
beneficiaries, which are anonymous. In this way, there is no question as to who owns the
company, since the company's shares are issued to the Foundations' name.

Another advantage of utilizing the Foundation as a shareholder applies in the following

scenario: In many cases, when opening corporate bank accounts or investment accounts,
the financial institutions require that you reveal the beneficial owners of the corporation.
Through the Foundation ownership strategy, one can state that the Foundation is the
owner of the corporation. Again, the objective is to remove ownership from their
personal name, to the name of a foreign entity whose ownership is anonymous.

The Panama Foundation provides additional advantages other than just ownership. For
example, the Panama Foundation can be useful in transferring funds offshore or receiving
funds from offshore. In some cases, people use Panama Foundations as vehicles for these

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purposes. Some people donate their funds to their Panama Foundations and later use the
Foundation to give educational or special grants to their children, grandchildren, or any
one else they choose. The advantage in this case, is to avoid fiscal regulations
surrounding donations, where some governments impose "gift taxes" and exhaustive
reporting requirements.

In general, Private Interest Foundations may not engage in habitual profit-making

commercial activities as a corporation can. Nevertheless, they may carry out commercial
activities from time to time, as long as the profits of those activities are used for the
objectives of the foundation. For example, a Private Interest Foundation may engage in
banking or investment activities, such as investing in bank time deposits (Certificates of
Deposit - CD's), stocks, bonds, mutual funds, options, money markets, etc. so long as the
proceeds from these investment activities are for the benefit of the beneficiaries of the
Foundation.

ADVANTAGES OF A PANAMA FOUNDATION

They provide a fiduciary structure for the orderly transfer and disposition of assets to
beneficiaries upon the death of the Founder, keeping control of the assets during his/her
lifetime. They may be established to have effects from the date of their constitution or
after the death of the Founder.

According to Law 25 of 1995, inheritance laws that apply in the domicile of the Founder
or the Beneficiaries, shall not be effective against the Foundations assets nor may these
laws affect the validity or performance of the Foundations objectives.

Foundations are established to carry the specifics goals set out in the Foundation Charter
and may additionally undertake sporadic commercial activities, exercise rights pertaining
to their holdings, own property, contract obligations and take part in administrative or
judicial proceedings.

A Private Interest Foundation should be established with a patrimony destined to fulfill

its objectives, which shall be no less than US$10,000.00. Said patrimony may be
increased by additional contributions of the Founder or third parties and does not have to
paid in part or in full before the incorporation.

The assets of the Foundation become legally independent and do not form a part of the
private estate of the Founder. Such assets are not subject to lien and may not be subject to
any action or measure, unless such action or measure pertains to obligations incurred or
damages arising from the fulfillment of the Foundations objectives; Notwithstanding the
creditors of the Founder or of a third party shall have the right to contest the contribution
or transfer of assets to a foundation when such transfer constitutes an act in fraud of the
creditors. The rights and actions of such creditors shall lapse at the expiration of three (3)
years, counted from the date of the contribution or transfer of the assets to the foundation
was done.

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According to article 27 of Law 25 of 1995, Private Interest Foundations are exempt from
payment of any taxes, contributions, duties, liens or assessments of any kind arising from
the acts of constitution, amendment or extinction of the same, as well as acts of transfer
or encumbrance of the Foundations assets and the income arising thereof, when related to
assets localized abroad; Money deposited by natural or juridical persons whose income
does not derive from a Panamanian source is not taxable in Panama for any reason;
Shares or securities of any kind issued by corporations which income is not derived from
a Panama source, or which are not taxable for any reason, even when such shares or
securities are deposited in the Republic of Panama.

The transfer of unmovable property, titles, certificates of deposits, assets, funds,

securities or shares carried out by reason of the fulfillment of the objectives of the
foundation or the termination of the same, in favor of relatives within the first degree of
consanguinity or the spouse of the Founder shall also be exempted from all taxes.

INFORMATION OF PUBLIC AND PRIVATE KNOWLEDGE

The only information made public are the names of the Founder, the member (s) of the
Foundation Council and the name of the Protector, this last if it is so established on the
Foundation Charter, as the Protector can be appointed by means of a private and
confidential document.

Nominee’s from the agent law firm are usually appointed as Founder and member (s) of
the Foundation Council for purposes of anonymity and complete privacy. Usual practice
is to appoint the Protector by a private and confidential document that is held by the
Protector. Therefore, public records are virtually useless in determining the Protector and
Beneficiaries.

The Foundation Regulations are for internal purposes of the Foundation and are not a
matter of public records. Information regarding names of beneficiaries and of the
protector and method for distribution of assets can be contained within the Regulations
thus will not be publicly disclosed.

CONFIDENTIALITY

The Law 25 of 1995 innovates in this field when it stipulates on Article 35 that all the
members of the Foundation Council, Protector, public or private servants that have
knowledge of the activities, affairs, transactions and operations of the PIF must maintain
reserve and confidentiality at all moments. Violation of these Articles carries a sanction
of 6 months of jail time and a fine of Fifty Thousand Dollars (US$50,000), without
prejudice to the civil liabilities.

PURPOSE OR OBJECT OF THE PRIVATE INTEREST FOUNDATION

It is important to explain that, as in Liechtenstein, a Panamanian Private foundation, as

stipulated in Article 3 of the law, cannot be simply profit oriented or be used to carry on a

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particular business. Although the private foundation shall be used more as a holding
company, it can sporadically perform certain acts of commerce when such acts are
convenient or advantageous to the foundation and only if the proceeds of such acts are
dedicated exclusively to the non-commercial purpose or objectives of the foundation.

Therefore, the purpose of a private foundation shall be along the following lines: To
contribute to the costs of upbringing, education, aid, as well as general maintenance or
other similar aims of one or more members of one or several families as established in the
Regulations. In addition to the members of one or several families, the foundation may
benefit other natural or juridical persons including institutions of any kind and it may take
the necessary provisions for the orderly disposition or succession of its patrimony.

To achieve its object the foundation is authorized to preserve, administer, and invest in an
appropriate manner the foundation's assets, being these assets of any kind, particularly of
real estate and participations in other entities, and to conclude all businesses and legal
transactions serving the pursuit and the realization of such objects.

PRIVATE INTEREST FOUNDATION DOCUMENTS

Two main documents constitute a foundation: the Foundation Charter and its Regulations
or by-laws.

The Foundation Charter

As mentioned above, Panamanian Law requires that a Foundation Charter be registered at

the Public Registry in order for the foundation to acquire juridical personality. Like any
other juridical person who will have rights and obligations and who will acquire and own
assets of all kinds, the Law requires that certain basic information be provided in the
Charter in order to validly constitute a foundation.

The Foundation Charter must include the following information:

ƒ The name of the foundation in any language with characters of the Latin alphabet,
and which to avoid confusion, shall not be identical or similar to that of any other
foundation previously registered in the Republic of Panama. The name shall
include the word "foundation" to distinguish it from a natural person or from a
different kind of juridical person.
ƒ The initial capital of the foundation, expressed in any currency of legal tender,
and which shall in no case be less than an amount equivalent to US$10,000.00.
ƒ A complete and clear designation of the name and address of member or members
of the Foundation Council, to which the founder may belong.
ƒ The domicile of the foundation.
ƒ The name and domicile of the Resident Agent of the foundation in the Republic of
Panama, who must be an attorney or Law firm. The Resident Agent must
countersign the Foundation Charter prior to its registration in the Public Registry.
ƒ The purposes or objects of the foundation.

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 ƒ The manner of appointing the beneficiaries of the foundation, which may include
the founder.
ƒ The reservation of the right to modify the Foundation Charter when deemed
convenient.
ƒ The purposes or objects of the foundation.
ƒ The manner of appointing the beneficiaries of the foundation, which may include
the founder.
ƒ The reservation of the right to modify the Foundation Charter when deemed
convenient.
ƒ The duration of the foundation.
ƒ The destination to be given to the estate of the foundation and the manner of
liquidating such estate in the event of dissolution.
ƒ Any other lawful clauses which the founder may consider convenient. Unlike
some Liechtenstein foundations and Common Law Trusts, the fact that the
foundation charter needs to be registered offers the Panamanian vehicle more
judicial safeguards: it grants the Public Registry the elements to issue a
"Certificate of Public Registry" thus ensuring the real existence of the foundation.
This document may be legalized by Apostille, and it will prove to be a great tool
for the prompt opening of bank accounts in the name of the foundation.

Regulations

Any information not required by Law to be included in the Foundation Charter and which
the founder would rather keep confidential can always be written into "the Regulations".
As in Liechtenstein, the Regulations are a private document and, as such, do not need to
be registered at the Public Registry or anywhere else. Traditionally, then, any information
containing the names of the beneficiaries and their rights over the foundation property are
written into the "Regulations". Consequently, the beneficiaries' identity and all
successory dispositions need not be revealed to any governmental agency, not even to the
attorneys organizing the foundation.

The Law places practically no limits upon the structuring of the beneficial interests of a
foundation. One of the more common scenarios is for the founder to designate
himself/herself as beneficiary for life and provide successive beneficiaries upon his or her
death.

The Law further enhances the confidentiality of this instrument by creating in article 35
severe sanctions (fines of up to US$50,000.00 and imprisonment of up to six months) for
breach of the duty to maintain the information confidential. This obligation applies to
members of the Foundation Council and of the supervisory bodies, if any, as well as to
public or private employees having any knowledge of the activities, transactions or
operations of the foundation.

Furthermore, the Regulations may be kept outside the country in the hands of the
founder, his fiduciary agent, the protector or any other person or institution vested with

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the confidence of the founder. For all of the above-mentioned reasons, and some
additional ones which will be explained in other parts of this Newsletter, the private
foundation has been called the perfect living will. There is no need to open public
proceedings if the founder dies, and his wishes regarding the use, transference, and final
destination of his assets can be carried out privately by the Foundation Council.

Foundation Council

The Foundation Council shall be appointed at the time of constitution of the foundation.
It shall be formed by no less than three (3) members in case of natural persons or only
one in the case of juridical person. The Law does not require any of its members to be
Panamanian.

The powers and responsibilities of the Foundation Council shall be established in the
Foundation Charter or in the Regulations. As a general rule, the Foundation Council shall
be responsible for carrying out the objectives of the foundation.
ƒ Unless otherwise provided in the Foundation Charter and/or the Regulations, their
general obligations shall be the following:
ƒ To administer the assets of the foundation according to its Charter or its
Regulations.
ƒ To carry out acts, contracts, etc., which are convenient for the attainment of the
foundation's objects.
ƒ To inform the beneficiaries of the foundation of its economic status, as provided
in the Foundation Charter or Regulations.
ƒ To carry out all such acts or contracts permitted by the Law and by the
Foundation's Regulations.
Please bear in mind that the Foundation Charter and/or the Regulations of a foundation
may also limit or expand the powers of the Foundation Council to suit the wishes of the
Founder. Additionally, the Founder might appoint himself as a member of the Foundation
Council and require that certain decisions be taken by unanimity.

All such acts may need to be previously authorized by a protector or other supervisory
body. Moreover, the founder may reserve for himself/herself or for any other person the
right to remove the members of the Foundation Council. This disposition must also be
expressly established in the Foundation Charter.

-END APPENDIX A-

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 APPENDIX B

PANAMA LAW NO. 25

June 12, 1995
"Whereby Private Foundations are regulated"

THE LEGISLATIVE ASSEMBLY

DECREES:

Article 1
One or more natural or juridical persons by themselves or through third parties, may
create a private foundation in accordance with the provisions set forth in this law. For
such purposes, the endowment of a patrimony exclusively dedicated to the objectives or
purposes expressly stipulated in the foundation charter is required. The initial patrimony
may be increased by the creator of the foundation, hereinafter called the founder, or by
any other person.

Article 2
Private foundations shall be governed by the foundation charter and its regulations, as
well as by the provisions of this law and other legal or regulatory provisions that may be
applicable. The provisions of Title II of Book I of the Civil Code shall not apply to these
foundations.

Article 3
Private foundations shall not be for profit. However, they may carry out mercantile
activities in a non-habitual manner or exercise the rights deriving from titles representing
the capital of mercantile corporations that make up the patrimony of the foundation,
provided that the economic results or proceeds of such activities be dedicated exclusively
for the purposes of the Foundation.

Article 4
Private foundations may be constituted to become effective at the time of constitution or
after the death of its founder, by anyone of the following methods:
a) Through a private document, executed by the founder, whose signature must be
authenticated by a notary public at the place of constitution.
b) Directly before a notary public at the place of constitution.
Whichever may be the method of constitution, it must comply with the formalities
established in the present Law, for the creation of foundations.
In case of a foundation being created either by public or private document, to have effect
after the death of the founder, the formalities stipulated for the execution of testaments
shall not apply.

Article 5
The foundation charter shall contain:
1. The name of the foundation expressed in any language with characters of the Latin

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alphabet, which shall not be equal or similar to that of a foundation previously existing in
the Republic of Panama, 80 as to avoid confusion. The name must include the word
"foundation" to distinguish it from other natural or juridical persons of a different nature.
2. The initial patrimony of the foundation, expressed in any currency of legal tender that
in no case shall be less to a sum equivalent ten thousand Balboas (B/10,000.00) =U.S.
Dollars .
3. A complete and clear designation, of the member or members of the Foundation
Council, to which the founder may belong, including their addresses.
4. The domicile of the foundation.
5. The name and address of the Resident Agent of the foundation in the Republic of
Panama, which shall be an attorney or a law firm, who must countersign the foundation
charter prior to its registration at the Public Registry.
6. The purposes of the foundation.
7. The manner in which the beneficiaries of the foundation shall be designated, among
which the founder may be included.
8. The reservation of the right to amend the foundation charter whenever deemed
convenient;
9. The duration of the foundation.
10. The destination to be given to the assets of the foundation and the method of
liquidation of its patrimony in case of dissolution;
11. Any other lawful clause that the founder may deem convenient.

Article 6
The foundation charter, as well as any amendment thereto must be written in any
language with characters of the Latin alphabet, and must comply with the regulations for
the registration of acts and titles in the Public Registry; for which purpose it must be
previously protocolized by a notary public of the Republic (of Panama). If the foundation
charter or its amendments are not written in the Spanish language, they must be
protocolized together with their (Spanish) translation by an authorized public translator of
the Republic of Panama.

Article 7
Any amendment to the foundation charter, when permitted, shall be carried out and
executed in accordance with what is established therein. The respective agreement,
resolution or act of amendment shall contain the date on which it was carried out and the
name, clearly identifiable, of the person or persons subscribing it and their signatures
which shall be authenticated by a notary public of the place where the document is
executed.

Article 8
Every private foundation must pay a registration fee and an annual maintenance tax
equivalent to those established for corporations in Articles 318 and 318A of the Fiscal
Code. The procedure and method of payment, the surcharge for late payment, the
consequences for lack of payment and all other complementary provisions of the
aforementioned legal principles, shall be applied to private foundations.

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Article 9
The registration at the Public Registry of the foundation charter shall bestow upon the
foundation juridical personality without the need for any other legal or administrative
authorization. Besides, the registration at the Public Registry constitutes a means of
publicity before third parties.
Consequently, the foundation may acquire and own assets of any kind, incur obligations
and be a party to any type of administrative and judicial proceedings in accordance with
applicable legal provisions.

Article 10
Once the foundation has obtained its juridical personality, the founder or third parties that
have pledged to contribute assets to the foundation, on their own or at the request of any
person with interest in the foundation, shall formalize the transfer to the foundation of the
assets so pledged. When the foundation is constituted to be effective upon the demise of
the founder, it shall be deemed to have existed prior to such death, in respect to the
donations that he (she) may have made to the foundation.

Article 11
For all legal purposes, the assets of the foundation shall constitute a separate patrimony
from the personal assets of the founder. Therefore they cannot be sequestered, embargoed
or subject to any precautionary action or measure, except for obligations incurred, or for
damages caused by virtue of fulfilling the purposes and objectives of the foundation, on
behalf of the legitimate rights of its beneficiaries. In no case shall the assets respond for
personal obligations of the founder or of the beneficiaries.

Article 12
Foundations shall be irrevocable, except in the following cases:
a) When the foundation charter has not been registered at the Public Registry;
b) When the opposite is expressly established in the foundation charter.
c) For any of the causes of revocation of donations.
The transfers (of assets) made to foundations shall be irrevocable by whoever has made
the transfer, unless the opposite is expressly established in the act of transfer
.
Article 13
In addition to the provisions of the previous article, when the foundation has been created
to be effective after the demise of the founder, the latter shall have the exclusive and
unlimited right to revoke it.
The heirs of the founder shall not have the right to revoke the creation or the transfers,
even if the foundation has not been registered in the Public Registry prior to the demise
of the founder.

Article 14
The existence of legal provisions in inheritance matters in the domicile of the founder or
of its beneficiaries, shall not be opposable to the foundation, nor shall it affect its validity,
or prevent the fulfillment of its objectives as provided for in the foundation charter or its
regulations.

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Article 15
The creditors of the founder or of a third party shall have the right to dispute the
contributions or transfer of assets in favor of a foundation, when the transfer constitutes
an act of fraud to the creditors. The rights and actions of such creditors shall prescribe
three (3) years from the date of the contribution or transfer of the assets to the foundation.

Article 16
The patrimony of the foundation may originate from any lawful business and may consist
of present or future assets of any nature. Periodic sums of money or other assets may also
be incorporated to the patrimony by the founder or by third parties. The transfer of assets
to the patrimony of the foundation may be effected by public or private document.
Nevertheless, in the case of real estate, the transfer must conform with the rules for the
transfer of real estate.

Article 17
The foundation should have a Foundation Council, whose duties or responsibilities shall
be established in the foundation charter or in its regulations. Unless it be a juridical
person, the number of members of the Foundation Council hall not be less than three (3).

Article 18
The Foundation Council shall be in charge of carrying out the purposes or objectives of
the Foundation. Unless otherwise stated in the foundation charter or its regulations, the
Foundation Council shall have the following general obligations and duties:
1. To administer the assets of the foundation, in accordance with the foundation charter or
its regulations.
2. Enter into acts, contracts or lawful businesses that may be suitable or necessary to
fulfill the object of the foundation, and to include in such contracts, agreements and other
instruments or obligations, such clauses and conditions as are necessary and convenient,
which conform to the purposes of the foundation and are not contrary to the law, to
morals, to bonus mores or to public order.
3. To inform the beneficiaries of the foundation of the patrimonial situation of the latter,
as established in the foundation charter or its regulations.
4. To deliver to the beneficiaries of the foundation the assets or resources set up in their
favor by the foundation charter or its regulations.
5. To carry out all such acts or contracts which are permitted to the foundation by the
present Law and other applicable legal or regulatory provisions.

Article 19
The foundation charter or its regulations may provide that the members of the Foundation
Council may only exercise their powers by obtaining previous authorization of a
protector, a committee or any other supervisory body, appointed by the founder or by the
majority of the founders. The members of the Foundation Council shall not held liable for
the 1088 or deterioration of the assets of the foundation, nor for any damages or prejudice
caused, when said authorization has been duly obtained.

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Article 20
Unless otherwise provided for in the foundation charter or its regulations, the Foundation
Council must render an accounting of its activities to the beneficiaries and, when
applicable, to the supervisory body. If the foundation charter or its regulations stipulate
nothing in this regards, the rendering of accounts must be done annually. If the accounts
90 rendered are not objected within the term established in the foundation charter or its
regulations, in lack of it, it shall be deemed as having been approved within ninety (90)
days from the day it was received, for which purpose, record of this term shall be made in
the report rendering the accounts.
Such period having lapsed or the account approved, the members of the Foundation
Council shall be exempted from liability for their administration, unless they had failed to
act with the diligence of a bonus paterfamilias. Such approval does not exonerate them
before the beneficiaries or third parties having an interest in the foundation, for damages
caused due to gross negligence or fraud in the administration of the foundation.

Article 21
In the foundation charter the founder may reserve for himself/herself or for other persons,
the right to remove the members of the foundation Council, as well as to appoint or add
new members.

Article 22
When the foundation charter or its regulations do not establish anything in respect to the
right to and the causes for removal of the members of the Foundation Council, these may
be judicially removed, through summary proceedings, for the following causes:
1. When their interests are incompatible with the interests of the beneficiaries or the
founder.
2. If the administration of the assets of the foundation lacked the diligence of a bonus
paterfamilias.
3. If they are convicted for a crime against private property or public faith. In this case,
while the criminal proceedings are in progress, the temporary suspension of the member
on trial may be decreed.
4. For incapacity or impossibility to carry out the objectives of the foundation, from the
time such causes may arise.
5. For insolvency or bankruptcy proceedings.

Article 23
The founder and beneficiary or beneficiaries may request the judicial removal of the
members of the Foundation Council. Should the beneficiaries be disabled or under age
they may be represented by whoever exercises upon them the "patria potestas" or
guardianship, as the case may be.
The judgment of the court decreeing the removal, shall appoint new members in
replacement of the previous ones, who shall be persons with sufficient capacity,
competence and good moral standing to administer the assets of the foundation, in
accordance with the purposes established by the founder.

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Article 24
The foundation charter or its regulations may provide for the constitution of supervisory
bodies that may be constituted by natural or juridical persons, such as auditors, protectors
of the foundation or others.
The duties of the supervisory bodies shall be established in the foundation charter or its
regulations and may include, among others, the following:
1. To ensure the fulfillment of the purposes of the foundation by the Foundation Council
and (to protect) the rights and interests of the beneficiaries;
2. To demand from the Foundation Council, the rendering of accounts;
3. To modify the purposes and objectives of the foundation, if and when they become too
costly or impossible to fulfill.
4. To appoint new members of the Foundation Council due to temporary or permanent
absence or for expiration of the period of anyone of them.
5. To appoint new members of the Foundation Council in cases of temporary or
accidental absence of anyone of them.
6. To increase the number of members of the Foundation Council.
7. To approve the acts adopted by the Foundation Council, as indicated in the foundation
charter or its regulations.
8. To guard the assets of the foundation and observe their application to the uses or
purposes stated in the foundation charter.
9. To exclude beneficiaries of the foundation and to add others in accordance with the
provisions of the foundation charter or its regulations.

Article 25
The foundation shall be dissolved due to:
1. Reaching the day in which the foundation must terminate, in accordance with the
foundation charter.
2. The fulfillment of the purposes for which it was constituted or if their fulfilment
becomes impossible.
3. Being in a state of insolvency, cessation of payments or due to bankruptcy proceedings
having been declared judicially.
4. The loss or total extinction of the assets of the foundation.
5. Its revocation.
6. Any other cause established in the foundation charter or in the present Law.

Article 26
Every beneficiary of the foundation may contest any acts of the foundation that may
damage the rights conferred upon him/her, denouncing such circumstance to the protector
or to other supervisory bodies, if any; or lacking them, directly promoting the respective
judicial claim, before a competent court of the domicile of the foundation.

Article 27
The acts of constitution, amendment or extinction of the foundation, as well as the acts of
transfer, transmittal or encumbrance of the assets of the foundation and the income
derived from such assets or any other act in connection therewith, shall be exempt from
all taxes, contributions, duties, liens or assessments of any kind or denomination,

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provided that such assets are:
1. Assets located abroad.
2. Money deposited by natural or juridical persons whose income is not derived from
Panamanian sources nor taxable in Panama for any reason whatsoever.
3. Shares or securities of any kind, issued by corporations which income is not derived
from Panamanian sources or when such income is not taxable for any reason whatsoever,
even when such shares or securities be deposited in the Republic of Panama.
The acts of transfer of real estate, titles, certificates of deposit, securities, money or
shares, carried out in fulfillment of the purposes or objectives, or for the extinction of the
foundation, in favor of relatives within the first grade of consanguinity and of the spouse
of the founder, shall also be exempted from all taxes.

Article 28
Foundations constituted in accordance with a foreign law may become subject to the
provisions of this law.

Article 29
Foundations referred to in the previous article that opt to become subject to the provisions
of this Law, shall present a Certificate of Continuation, issued by such bodies as their
internal regime may call for, and which shall contain:
1. The name of the foundation and the date of its constitution.
2. Data about its registration or deposit (of the charter) at its country of origin.
3. An express declaration of its desire to continue its legal existence as a Panamanian
foundation.
4. Requirements stipulated under Article 5 of this Law, for the constitution of private
foundations.

Article 30
The certification containing the resolution of continuation and other requirements
mentioned in the preceding paragraph must have the following documents attached there
to:
1. Copy of the original act of constitution of the foundation expressing its desire to
continue in Panama, along with any subsequent amendment;
2. A power of attorney granted to a Panamanian attorney to carry out the necessary
proceedings to make effective the continuation of the foundation in Panama.
The certificate of continuation, as well as the documents attached thereto referred to in
this Law, shall be duly protocolized and registered at the Public Registry so that the
foundation may continue its legal existence as a private foundation in the Republic of
Panama.

Article 31
In the cases foreseen in Article 26, the responsibilities, duties and rights of the foundation
acquired prior to the change or domicile or legislation, shall continue in force, as well as
the proceedings already initiated against it or those that the foundation may have
promoted, without being affected such rights and obligations due to the change
authorized by the aforesaid legal provisions.

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Article 32
The foundations constituted in accordance with this Law, as well as the assets comprising
its patrimony, may be transferred or become subject to the laws and jurisdiction of
another country, as may be provided by the foundation charter or its regulations.

Article 33
Registrations related to private foundations shall be effected at the Public Registry in a
special section that shall be named "Section of Private Foundations" The Executive
Branch through the Ministry of Government and Justice shall issue the regulations
applicable to such section.

Article 34
To avoid the unlawful use of private foundation, all legal provisions contained in
Executive Decree No. 468 of 1994 and any other rule in force aiming at fighting money
laundering derived from drug-trafficking, shall apply for their operation.

Article 35
The members of the Foundation Council, of the supervisory bodies, if any, as well as the
public or private employees who might have any knowledge of the activities, transactions
or operations of the foundations shall at all times maintain secrecy and confidentiality in
this respect. Infringement of this shall be penalized with six (6) months imprisonment and
a $50,000.00 fine without prejudice of the corresponding civil liability.
The provisions of this article shall apply without prejudice of the information which must
be disclosed to the official authorities and of the inspections that they must carry out in
the manner established by the law.

Article 36
Any controversy for which there is no special procedure in this Law, shall be resolved
through summary proceedings. The foundation charter or the regulations of the
foundation may establish that any controversy arising in respect to the foundation shall be
resolved by arbiters or arbitrators; as well as establish the procedure they should abide
by. In the event that such procedure is not established, the rules in respect to such
matters, as contained in the Judicial Code, shall apply.

Article 37
This law shall be effective from the date of its publication.

-END APPENDIX B-

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 APPENDIX C
BELIZE OFFSHORE CORPORATIONS (IBC)

DETAILS OF THE IBC

Definition: A Belize IBC is an offshore company which conducts its trading and
business outside of Belize.
Belize's legislation also allows an IBC to carry on the following activities within Belize:

• make or maintain deposits with local banks in Belize;

• make or maintain professional contact with persons in Belize;
• prepare or maintain books and records within Belize;
• hold meetings of its directors or members within Belize;
• hold lease of property for use as an office in Belize;
• own a vessel (s) registered in Belize in accordance with the Registration of
Merchant Ships Act, 1989;
• hold shares in another Belize IBC.

Advantages: Belize's modern and up to date offshore legislation provides for maximum
flexibility in global asset protection and tax and investment planning. As a result, an
investor can realize many competitive advantages in areas such as:

Taxation: A Belize IBC is exempt from...

• the payment of all forms of local taxation;

• the payment of stamp duties for transactions in respect of its shares,
• debt obligations or other securities;
• the payment of stamp duties with respect to all instruments relating in any way to
its assets or activities.

Exchange Control A Belize IBC is not subject to exchange control regulations.

Security and Confidentiality With a Belize IBC disclosure of the beneficial owner(s) is
not required; share register may be inspected only by a shareholder; nominee
shareholders and bearer shares are permitted; assets are protected from confiscation or
expropriation orders or similar actions by foreign governments.

Filing Requirements With a Belize IBC only the Memorandum and Articles are required
for public records; the registration and deregistration of Registers of Directors, Members,
and Mortgages and Charges are optional.

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Cost Savings: With a Belize IBC

• no minimum capital is required;

• no audit of accounts is required;
• no filing of annual returns is required;
• only one shareholder and one director are required, who may be corporate;
• no company secretary is required;
• no annual general meeting is required;
• meetings may be held outside of Belize and may be by telephone or other
electronic means;
• shares may be issued with or without par value and in any currency.

Incorporation: With a Belize IBC

• re-domiciliation into and out of Belize is permitted;

• registration in any foreign language is permitted.
In addition, Belize's legislation facilitates speedy and simple incorporation, and its
modern and computerized IBC Registry is capable of incorporating a company
within one hour.

An International Business Company is a company that does NOT:

(a) carry on business with persons resident in Belize;

(b) own an interest in real property situate in Belize, other than a lease referred to in
paragraph (e) of subsection (2);
(c) carry on banking business unless it is licensed under an enactment authorizing it to
carry on such business;
(d) carry on business as an insurance or reinsurance company, insurance agent or
insurance broker, unless it is licensed under an enactment authorizing it to carry on such
business;
(e) carry on the business of providing the registered office for companies;
(f) carry on trust business, unless it is licensed under an enactment authorizing it to carry
on such business;
(g) carry on collective investment schemes, unless it is licensed under an enactment
authorizing it to carry on such business;
(h) hold shares, stock, debt obligations or other securities in a company incorporated
under the Companies Act or under any enactment amending or substituting the said Act;
(i) subject to subsection (4) below, issue its shares, stock, debt obligations or other
securities to any person resident in Belize or to any company incorporated under the
Companies Act or under any enactment amending or substituting the said Act; (2) For
purposes of paragraph (a) of subsection (1), an International Business Company shall not
be treated as carrying on business with persons resident in Belize by reason only that:
(a) it makes or maintains deposits with a company incorporated in Belize and carrying on
a banking business within Belize;
(b) it makes or maintains professional contact with solicitors, barristers, accountants,
bookkeepers, trust companies, administration companies, investment advisers or other

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similar persons carrying on business within Belize;
(c) it prepares or maintains books and records within Belize;
(d) it holds, within Belize, meetings of its directors or members;
(e) it holds a lease of property for use as an office from which to communicate with
members or where books and records of the company are prepared or maintained;
(f) it owns a vessel or vessels registered in Belize in accordance with the Registration of
the Merchant Ships Act, 1989.
(3) The provisions of the enactments authorizing the carrying on of the businesses
specified in paragraphs (c), (d), (f) and
(g) of subsection (1) above shall override any contrary provisions contained in this Act.

-END APPENDIX C-

APPENDIX D

THE NEVIS FOREIGN ASSET PROTECTION TRUST (FAPT)

The progressive trust laws of Nevis provide formidable obstacles to potential creditors,
making it the most favorable independent jurisdiction in the world for an Asset Protection
Trust. According to Nevis law, Nevis courts do not recognize or enforce U.S. judgments
or judicial orders. Prior to commencing litigation proceedings in Nevis, a plaintiff-
creditor is required to post a sizable cash litigation bond and to retain local counsel
recognized by the Nevis courts. Any fraudulent conveyance claim must be filed within
one year from the cause of action, and in no case more than two years after the transfer of
assets. Fraudulent conveyance claims must also be proven beyond a reasonable doubt,
rather than by a mere preponderance of the evidence. An unsuccessful plaintiff is
normally liable for all legal costs, including those of the defendant. The enormous cost of
litigation alone is usually enough to discourage most creditors.

Nevisian trust ordinances provide the grantor/settlor with the ability to appoint a
protector. The protector has the authority to oversee the trustee and may have the
discretion to replace the trustee or move the trust to another jurisdiction. These options
offer the grantor/settlor considerable assurance that the trustee will consider his/her
request.

Nevis has no perpetuities period and follows rules that benefit multi-generation treatment,
making Nevis an ideal jurisdiction in which to create an international trust as part of your
estate plan. If your tax advisors recommend a charitable trust, Nevis trust laws make the
country a favorable jurisdiction for such a trust.

The Asset Protection Trust (APT) is inherently a more protective trust and can provide
major advantages over a U.S. domestic trust. Unlike a U.S. domestic trust, an APT can
maintain control of present and future ownership and provide estate tax and probate cost
savings. Perhaps the most important difference between a Nevis trust and a U.S.
Domestic Asset Protection Trust is that Nevis law allows the grantor/settlor to be a

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discretionary beneficiary of the trust (self-settled trust) without losing the ability to
protect the trust assets. Although a few U.S. states have recently amended their trust
statutes to allow self-settled trusts, there is little or no case law to support the U.S.
Domestic Asset Protection Trust.

Confidentiality is a hallmark of trusts. The establishment of a trust, and the transfer of

assets, is not a matter of public record. An international trust is treated as a private matter
between the grantor/settlor, the trustee, and the beneficiary.

The international trust may provide confidentiality as to the existence of the trust; the
terms and provisions of the trust; the value and nature of the assets in trust, the identities
and activities of the trustee and protector; and, the identities of the settlor and
beneficiaries. While there is a great deal of confidentiality surrounding the formation of a
trust, a trust is not a means to avoid legally required reporting in your jurisdiction of
residence.

Elements of a Trust

The Trust Document

The Trust Deed or Declaration of Trust is a legal agreement that outlines, in detail, the
relationships among the parties and the responsibilities of each party. The parties are the
settlor(s), the trustee, the beneficiary (ies) and the protector (if desired). The Trust Deed
will also describe the assets held in trust. (NOTE: “Deed of Trust” is like a mortgage).

The Settlor (Grantor)

The settlor is the entity that transfers ownership of its assets to a trust. The settlor can be
a corporation, a person, or other legal entity capable of owning assets. The settlor is said
to have created the trust. The settlor then has the right to appoint the trustee, name
beneficiaries and select a protector if so desired.

The Trustees

The trustee is a corporation, person, or other legal entity named in the Trust Deed to
manage the trust property. (NOTE: The trust, not the trustee, owns the property.) The law
requires the trustee to manage the assets in accordance with the terms of the Trust Deed
for the benefit of those beneficiaries named by the settlor.

The Beneficiaries

The person(s), corporation, or other legal entities named by the settlor to benefit from the
assets placed in the trust. The rights and benefits of the beneficiaries are spelled out in the
Trust Deed.

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The Protector

The role of a protector is to monitor the major acts of the trustee. The protector acts not
as Trustee, but rather, as the "guardian" of the trust. Appointing a trust protector provides
added protection features in that the protector may exercise the power to remove the
trustee, appoint a successor trustee, and take certain actions to protect the trust in cases of
emergency. Like the trustee, the protector has a fiduciary duty to the grantor/settlor and
the beneficiaries of the trust, and as such, must follow the purpose for which the trust was
created.

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APPENDIX E
HYPOTHETICAL OFFSHORE STRUCTURE SCHEMATIC

[On next page]

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 -END APPENDIX E-

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 APPENDIX F
US FEDERAL COURTS VIEW ON FAPT FOR US CITIZENS

http://www.assetprotectionbook.com/fapt.htm

For anybody who is reading this and is a US citizen, please go to the website above and
read the entire page plus ALL the links [ESPECIALLY the links]. If you use a Foreign
Asset Protection Trust after reading this, then you are nuts. There is no way you can
protect anything with this instrument if you are a US citizen. Do yourself a favor and
forget trusts.

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