Offshore Asset Protection BLOG - Bob Bauman

Advice to Monaco: Pray to God

The proverbial question whether any person or creature has the ability to change its innate being comes to us from the Bible, Jeremiah 13:23, in which we are asked by the Prophet: "Can the Ethiopian change his skin, or the leopard his spots? Then may ye also do good, that are accustomed to do evil."

Without more, Jeremiah's admonition would seem to suggest that change of one's innate nature is not to be expected, indeed may be impossible.

So it also may be with tax havens and their rulers.

I raise this question in light of a press release this week announcing that the government, (such as it is), of Monaco has hired a trio of public relations experts "to help the tiny Mediterranean principality shed its image as an international tax haven."

To Be or Not to Be

A polling expert, a former journalist and an advertising consultant from the Young and Rubicam agency will devise Monaco's fiscally-virtuous new image. Monaco will spend €500,000 (US$704,000) for research into the make over, including asking a panel of international personalities "What Monaco should be." The image campaign is to be launched in 2010 and last several years, with a budget expected to reach into the millions.

Well, dear readers, Monaco is and has been a "tax haven"-- and no amount of costly public relations campaigns is going to change that fact.

A Listing and De-Listing

But like many suddenly self-conscious tax havens, Monaco (or perhaps its ruler, Prince Albert) is suffering a case of nerves, a reaction to the verbal onslaught of the G-20 high tax nations and their scolding mouthpiece, the Organization for Economic Cooperation & Development (OECD) which arbitrarily placed Monaco its gray list of "uncooperative" tax havens.

As did many other OECD-accused tax havens, Monaco quickly agreed to cooperate in exchanging tax information, praying for early OECD absolution.

So Monaco was removed from the phony OECD "black list" of financial centers in April but remains on a G-20 "gray list," which it hopes to leave by the end of the year with elevation to the celestial purity of the OECD "white list."

Reputation is All

"The idea has been floating around for months but the decision was obvious after the G-20 summit," said officials in Prince Albert II's administration. "The principality has said it hopes to leave the gray list of tax havens by the start of 2010, that is when we need to be ready to change our reputation."

Fall from Grace

Yes, as I have previously commented in these pages, Monaco is a tax haven for the exceedingly wealthy – and great wealth is what it takes to afford living here. If you want to make this your permanent home, it helps to have more than a modest amount of money and an assured income for life.

And it doesn’t hurt to know the Prince and the wild royal family, a bunch that makes the British royals look like saints. We even have a few Sovereign Society members who live in this tiny land of the super privileged, where the fairy tale Princess Grace died in a car crash in 1982 and everyone seems never top have gotten over it.

Most of the streets are named for the copious members of the Monegasque royal family, the Grimaldis. This week those streets are hosting the Pez Cycle Races, (whatever that is).

Medieval Origins

There was a distant time when Monaco was little more than an inhospitable rocky peninsula offering a natural seaport for nearby fishing villages. Since those ancient times, Monaco's history has been inseparable from that of the Grimaldi family that has its origins in the 10th century AD.

No doubt, shedding the tax haven image PR campaign was the brainchild of Monaco's current ruler, Albert Alexandre Louis Pierre Grimaldi, a.k.a. Albert II, Sovereign Prince of Monaco, the head of the House of Grimaldi, 32nd hereditary ruler and son of the late Rainier III, and his princess consort, the late Grace Kelly of Philadelphia and Hollywood. Albert got his current job in April 2005 upon the death of his father.

Very Model of a Modern Prince

From the star, Prince Albert made public noises about being concerned about poverty, the environment, polar bears and global warming.

A few years back he spent some time at the North Pole, and this year at the South Pole. His environmental concerns seem not to extend to over population. His Highness acknowledges having a son out of wedlock by an airline stewardess from Togo, and another by a California women. But then, illegitimate kids are nothing new in the star-crossed Grimaldi family.

Albert had been in the princely palace but a few months when he announced: "We must absolutely free ourselves of this equation that Monaco equals money laundering." While insisting that tougher laws were already in place, he conceded: "We perhaps have lacked vigilance." Do you (and the Russian mafia) think so?

In a tax haven with about 33,000 full time residents, there are 130,000 banking clients with deposits worth nearly US$100 billion, according to the Monaco Banking Assoc. Hmmmmm!

Change You Can Believe In

Well, if Prince Albert the Bald and his counselors are really serious about ending their tax haven status, may be they should close down the casino at Monte Carlo with all the millions of dollars, euros, etc. that are gambled away. That would repel all those hedonistic rich folks.

Albert and his counselors also could impose taxes on the comfortably wealthy people who now live there tax free, many of them millionaires and billionaires, retired and enjoying the good life.

Or the local tax laws could be changed to bring all Monegasques, (not just those who are French, as is now the law), under the onerous French tax system. No doubt the anti-tax haven French president Sarkosy would like that.

With God's Help

Way back in the 1400s a younger son of the Grimaldi branch of Antibes, Lambert, became lord of Monaco at a time of deep uncertainty. It is said he was a noteworthy ruler who handled diplomacy and the sword with equal talent, although his views on polar bears and tax havens are unknown.

Lambert bravely established the independence of Monaco, receiving widespread admiration to the point where his favorite expression, "Deo juvante" ("With God's help"), became a motto for many Grimaldis.

May be Albert should save the millions he plans to spend on PR and just pray. With God's help, maybe he can convince the world (and the OECD) that Monaco is not a tax haven.

* The Sovereign Society can provide members with professional contacts in Monaco upon request. I also have a chapter on Monaco in my latest version of The Passport Book, or explore possibilities offshore in one of my best-selling books, Where to Stash Your Cash Legally: Tax Havens of the World, a new edition son to be published.

How to Gage the Coming Failure of the London G-20 Meeting

James Kirkup has a very astute observation inThree Line Whip blog published by The London Daily Telegraph about how to gauge the success of the G-20 summit that is to convene in London next week on April 2nd.

Kirkup writes: "The more you hear Mr Brown, Mr Obama and the rest talk about tax havens, the more they have failed to agree on more important things. No one likes tax havens. They're the low-hanging fruit of the G-20 process; saying rude things about the Swiss and the rest is pretty easy and uncontroversial. But it's also missing the point. This crisis didn't begin in Guernsey or the Caymans, it began in New York and London."

Orchestrated Anti-Tax Haven Blather

For weeks now the liberal world media dutifully has been repeating dire threats against so-called "tax havens" from the big spending, high taxing, anti-tax competition  likes of Germany's Merkel and France's Sarkosy. Even President Obama allowed his less than impressive Secretary of the Treasury to make some noise against tax havens.

The orchestrated battle of words hurled at offshore financial centers got so heated that British PM Gordon Brown felt obliged to drastic demand for "the end of tax havens." 

This belated anti-tax haven baloney comes from Her Majesty's first minister whose government is in charge (and has been for a decade) of the United Kingdom's many tax havens in its overseas territories (Bermuda, the Cayman Islands, British Virgin Islands, the Turks & Caicos) and its Crown Dependencies (the Channel Islands of Jersey and Guernsey and the Isle of Man), plus Gibraltar.

Does the Rt. Hon. Gordon believe that the City of London really can absorb all the dispossessed refugee bankers and trust officer that will flood in from these British world-class financial centers if he and the G-20 high tax goons shut them down? (Some unprincipled candidates, desperate for re-election, will do just about anything for votes!)

Spend vs. Regulate

The proponents claimed the G-20 meeting was not only going to solve the international economic crisis, (either by more Obama stimulus spending, or forced global regulation), but for desert, the G-20 would serve the collective severed heads of all tax havens displayed on a platter.

This entire hypocritical anti-tax haven campaign, as I have oft noted, is but an extension of the phony blacklists that have streamed for years from the tax-exempt minions at the Paris headquarters of the Organization for Economic Cooperation and Development (OECD), a taxpayer financed, pro-tax mouthpiece for the G-20 major nations who pay their salaries.

The OECD invented the blacklist and has used it skillfully as a public relations ploy to smear tax havens.

But in a classic case of removing the wind from the sails, the OECD blacklist ploy deflated when Switzerland, Austria, Luxembourg, Belgium, Hong Kong, Singapore, Liechtenstein, Andorra and Monaco, among others, all announced their agreement to broader but limited tax information exchange.

Even German foreign minister Steinbrueck, one of the most caustic anti-tax haven critic, has said he does not think G-20 leaders now would come up with a blacklist of tax havens. "As far as I see, there will be no such list at the London meeting," he said.

Despicable Communiqué

When I asked one the leading American tax experts, Dan Mitchell (left) of the Cato Institute, what he thought the G-20 outcome might be he said: "To be honest, I'm not sure what to expect from the G-20 meeting, other than a despicable communiqué attacking tax competition. My guess is that the real enemy is still the OECD, and the G-20 is just engaging in public relations warfare."

As The Telegraph's James Kirkup writes: "The transatlantic disagreement over stimulus vs. regulation isn't a full-blown row yet, but it's not far off, and the still-skeletal Obama administration has enough worries at home without looking for more abroad. Better for the president to play safe and sign something anodyne in London."

List Grows Long

The Swiss daily Tages Anzeiger reported that in a letter dated March 5 to British Chancellor Alistair Darling, OECD chief Angel Gurria provided an anti-tax haven blacklist including Switzerland and Singapore, as well as territories such as the Cayman Islands, Andorra and Montserrat.

The OECD branded 46 countries and territories for "insufficient progress" in meeting standards on tax cooperation and banking secrecy. (To the OECD that means an end to all financial privacy and automatic exchange of tax information among nations, as well as uniform higher taxes in all jurisdictions).

The OECD list also included Costa Rica, Chile, Grenada, Guatemala, Hong Kong, Liberia, Panama, the Philippines, San Marino and Uruguay, as well as Gibraltar, Guernsey and Jersey and a host of Pacific and Caribbean islands.

How Many Legions?

But as the brutal Soviet dictator, Josef Stalin was reportedly to have said about the influence of his enemy, His Holiness, the Pope: "How many legions does the Pope have?"

The Pope was said to have responded through Stalin's Foreign Minister, Molotov: "Tell your master he will meet my legions in Eternity."

Well, the OECD is loud and demanding, but it has neither any enforcement legions and certainly not any heavenly allies.

The Tax Haven Test

So remember that on April 2nd, if tax havens and offshore finance are anything more than a minor part of the "global new deal" struck in London, then the G-20 global economic meeting will have failed.

And no matter what the G-20 does, tax havens will still be with us, fortunately.

* To learn more about the economic benefits of tax havens, click here:
* To learn more about the moral case for tax havens, click here:
* To see why anti-tax haven demagoguery is misguided, click here:

Blacklist Fades to Gray, Then Disappears

 

Like that illusive Cheshire Cat in Lewis Carroll's Alice in Wonderland that appears and disappears at will, the threatened G-20 "blacklist" of  allegedly disreputable tax havens seems suddenly to have evaporated into the murky international fog.

You will recall that at a scheduled April 2nd "G-20" London meeting of major nations, dominated by high tax welfare states, it was expected the group would issue a new anti-tax haven blacklist, with Germany and France in the lead pushing for condemnation of even Switzerland, the cleanest and most respected of all offshore financial centers.

What Tax Bullies Really Want

In truth, financial cleanliness has never been the true objective of the high tax nations that make a habit of bullying low tax jurisdictions.

As Veronique de Rugy notes in the current issue of Reason magazine: In the part of high tax nations, "bank secrecy laws have long been seen as an obstacle to tax enforcement." As she says, supposedly by setting up "safe havens" for dollars, pounds, and euros, bank secrecy laws get in the way of these governments "forcing their high income tax rates down its taxpayers' throats."

The only way to fix this problem, the high tax welfare states argue, is for all nations to implement an automatic and unlimited exchange of information about nonresident investment. So-called tax havens, goes this line of thinking, should collect private financial data on foreigners and turn that information over to the appropriate governments.

Decade of Offshore Improvements

Most offshore financial centers, (as they now prefer to be called), have been shaken by the sudden intensification of pressure, especially after they have worked hard adapting to international demands for more transparency during the past decade.

The latest crackdown has been fueled by alleged tax evasion scandals in Liechtenstein and Switzerland in last year, the election of an avowed enemy of tax havens as U.S. president and the near collapse of the global banking system -- which the more radical anti-tax haven critics brazenly blamed on tax havens.
Jean-Claude Juncker (left), Luxembourg's Finance Minister responded on that point by saying: "Imagine for a moment that Switzerland, Austria and Luxembourg did not have banking secrecy six months or a year ago. Do you really think that the financial crisis would be any less serious? There is no link between banking secrecy and the global economic crisis."

American Hypocrisy

The U.K. Channel Islands (Jersey, Guernsey) ten years ago adopted legislation making foreign tax evasion a crime; other U.K. offshore centers (Cayman Islands, Bermuda, British Virgin Islands) followed suit shortly thereafter.

 

  
Large countries like the United States have yet to take similar steps, no doubt because the substantial tax free deposits from foreigners in U.S. banks provide essential funding for America's trillion dollar budget deficits.

Expert observers, including the International Monetary Fund, have regularly acknowledged U.K. offshore territories' transparency and supervision as amongst the toughest in the global finance industry.

The reputation of the offshore centers like Switzerland and the U.K. Crown Dependencies (Isle of Man, Channel Islands) and U.K. overseas territories, such as Bermuda and Cayman for probity, professional skills and financial sophistication enables them to attract capital from around the world. Such offshore capital is injected into U.K., Europe and the U.S. banking and securities markets, creating crucial connections with such centers.

Ten Years of Phony Blacklists

For more than a decade high tax nations have condemned as aiding and abetting massive tax evasion, any offshore jurisdiction that has low taxes, respects financial privacy and guarantees bank secrecy.

These anti-tax haven, anti-financial privacy campaigns have been spearheaded by the Organization for Economic Cooperation and Development (OECD), a paid, pro-tax mouthpiece for the major nations. The OECD invented the blacklist and has  used it skillfully as a public relations ploy to smear tax havens.

Capitulation

Indeed, the OECD had at the ready its latest blacklist for the G-20 London meeting when an unexpected thing happened. Many of the countries that were destined to be smeared in the list agreed in the future to apply OECD standards allowing exchange of tax information among all nations.

Now the pursuit of specific tax evaders by foreign countries supposedly will be made easier by greater co-operation from Switzerland, Austria, Luxembourg, Belgium, Hong Kong, Singapore, Liechtenstein, Andorra and Monaco, among others. All announced last week their agreement to broader but limited tax information exchange.

Never Enough
But don't count on the tax collectors to stop now. German Finance Minister Peer Steinbrueck (left) has told Der Spiegel that he wants countries like Switzerland to reveal  the names of all their account holders "even when there's no concrete suspicion of tax evasion."

 

Nevertheless, Steinbrueck, one of the most caustic anti-tax haven critic, said on Friday he did not think G-20 leaders meeting in London next month now would come up with a blacklist of tax havens. "As far as I see, there will be no such list at the London meeting."

German Chancellor Angela Merkel said she could not imagine any country that accepted OECD standards for exchanging tax information would be on a blacklist, but she gloated that the mere talk of this "virtual list" had already had "positive" effects.

International Blackmail

So "positive" that the much herald G-20 "blacklist" suddenly has faded into momentary obscurity, no doubt to be kept in reserve for a re-appearance in the next high tax onslaught against low tax jurisdictions which, in my opinion, is just a matter of time.

But I suggest that we call all these phony campaigns what they really are -- not a blacklist, but blackmail.

The Sovereign Society is a recognized voice in the complex offshore world.  Join the Sovereign Society and keep informed.

Liechtenstein Capitulates, Somewhat

The latest news from Vaduz heralds what is being billed by the media as a major crack in offshore financial center secrecy.

In a formal joint "Declaration" Liechtenstein's Prime Minister Otmar Hasler and the ruling, Prince Alois von und zu Liechtenstein, announced that the principality has agreed to ease its strict bank secrecy law by committing to Organization for Economic Cooperation and Development (OECD) standards on tax transparency and tax data exchange.

Liechtenstein ruler Prince Alois (left), Liechtenstein Prime Minister Otmar Hasler (center) and Liechtenstein Prime Minister-designate Klaus Tschuetscher held a press conference Thursday on banking secrecy

No Automatic Tax Info Exchange

The principality is also offering to sign bilateral tax information exchange agreements (TIEAs) that go beyond OECD standards, provided that clients of its banks holding secret accounts "are allowed to bring money to their home countries and meet their tax obligations in an orderly manner," (whatever that means.)

Liechtenstein insists that it will not allow automatic exchange of tax information, but it will be more cooperative with other national tax authorities when requested. It has already started TIEA talks with individual countries.

Prime Minister Says

"Our bank secrecy has always served to ensure the legitimate protection of the privacy of the citizen, which we will continue to retain. With this declaration, however, we want to make clear that bank client confidentiality in future cannot be misused to facilitate tax crime."

So said Prime Minister Otmar Hasler. The "Government Declaration" is said to be supported by all important sectors of Liechtenstein politics and business.

While the principality’s "Declaration" emphasizes that it will maintain client privacy, the statement focuses on stopping tax fraud rather than tax evasion. As in Switzerland, tax fraud is a crime in the principality, while tax evasion is a lesser civil offense. That could complicate efforts for TIEAs with other countries that view tax evasion as a crime.

Prior Co-operation

Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free enterprise economy with a vital financial service sector and the highest per capita income in the world.

Europe’s fourth smallest country agreed in December to share information on tax evasion and signed a TIEA with the U.S. It also adopted anti-money laundering legislation and signed a Mutual Legal Assistance Treaty with the U.S. in 2003.

Liechtenstein's new commitment comes just weeks before a London meeting of the G-20 nations on April 2 that will discuss possible restrictions on tax havens. Its action also could add pressure on neighboring Switzerland, the world’s largest offshore center.

Cash Hemorrhage

No doubt outside pressure, especially from neighboring tax hungry Germany, was a factor in this declaration.

But it appears this is more a case of money talking (and walking). Billions of cash hemorrhaging no doubt commanded the close attention of the royal family and many of the other 35,000 citizens of the principality.

The money drain began when LGT Bank, owned by the royal family, came under fierce criticism last year after German intelligence agents bribed a bank ex-employee to get a list of hundreds of foreign LGT customers allegedly evading taxes.

Included were members of Germany's business elite. Since then, billions of Swiss francs have flowed out of LGT and other banks, which may have prompted the country to rethink its role as a tax haven. Liechtenstein's third largest bank, VP Bank, said it had net outflows in 2008 of 1.3 billion Swiss francs (US$1.13 billion).

Not Unexpected

Last March I reported that Prince Alois, (left) hereditary ruler of Liechtenstein, had confirmed that his tiny Alpine tax haven planned to seize the initiative in response to foreign criticism of its financial sector’s strict bank secrecy laws. "The time has come for us to base our system of mutual legal assistance and administrative assistance in tax matters on a new foundation," the Prince said then in his traditional national day speech to the nation.

No Unconditional Surrender

No doubt the leaders of sovereign nations such as Liechtenstein, Switzerland and other tax havens that rightfully protect financial privacy by law realize that no compromise, other than unconditional surrender, will ever appease the OECD and the major tax collecting nations of the world it represents.

All this anti-offshore pressure is a smoke screen for welfare state tax collectors aiming for complete destruction of financial and personal privacy for everyone, just as the so-called PATRIOT Act has done in the U.S.. These tax bureaucrats demand access to every citizen's financial lives, no matter where you live or where you may have assets.

For them abolishing bank secrecy is not enough. They also want to end lawyer-client privilege, mandatory publication of all beneficial ownership of private trusts, private corporations and private foundations, plus the imposition of a global system of total tax information exchange among all nations.

Right to Privacy

These leftist advocates believe that personal and financial privacy must yield to Big Brother government's unlimited right to know all and to tax all.

Last year I wrote: "After conferring with trusted investment and legal experts with whom we work in Liechtenstein it is my judgment that a very limited cooperation on tax information with foreign governments in individual cases may now be allowed – but absolutely no fishing expeditions. But don’t expect the fondest dreams of the tax collecting Left to come true – Liechtenstein and its historic bank secrecy will stand firm."

It remains to be seen whether I was right or wrong. We'll soon find out.

** The Liechtenstein Report, explains the many legal advantages of banking and asset protection in Liechtenstein. Find out how to use this country to your advantage.

War Declared on Switzerland -- Again!

Last week tax hungry officials from socialist Germany and France once again declared another round in their long running war on Switzerland.

Their aim once again was against traditional Swiss bank secrecy, which the Franco-German politicians claim is little more than a cover for massive tax evasion -- (no proof offered).

Over several centuries and during two World Wars, peaceful Switzerland always has maintained its traditional neutrality. It's kept out of numerous wars involving both France and Germany, usually with the latter attacking the former.

The last time a war of sorts was declared against Switzerland was in George and Ira Geshwin's 1930 Broadway musical hit, Strike Up the Band, where the plot centered on a Babbitt-like American cheese tycoon who tries to maintain his monopoly on the U.S. market by convincing the United States government to declare war on Switzerland.

I suspect that the current effort by France and Germany will be just about as successful, (but much less entertaining), than Gershwin's spirited musical militarism.

Another Skirmish - Another Show!

Reacting to these renewed pressure from European Union officials, the Swiss government vehemently defended its tax system and its financial privacy. While this looks like another episode in the decade-old, anti-Swiss political road show, the new element this time is that EU leftists are making bogus use of the current world economic disruptions as a spurious basis to argue that tax havens cause recessions!

Switzerland repeatedly has been attacked for its low taxation and banking secrecy laws, which biased critics claim provide European citizens with loopholes for evading taxes in their own countries. These anti-Swiss demagogues ignore the fact that Switzerland participates fully in the EU tax directive program, collecting taxes from foreign account holders and paying it to their home EU governments.

The most recent criticism coincides with a rapidly spreading global financial crisis that has prompted governments worldwide to spend billions of dollars to bail out ailing banks. With a recession looming in the U.S. and Europe, governments are grasping at any straw to stop a sharp fall in tax income.

Yet Another Phony Blacklist

The Swiss Foreign Minister, Micheline Calmy-Rey, deplored the attacks on Switzerland which were triggered by an announcement from 17 countries led by France and Germany that they plan a new blacklist of tax havens. France and Germany are demanding that Switzerland be on the list.

Austria came out with support for its neighbor Switzerland against calls that it be placed on a blacklist of tax havens. "Austria will always support Switzerland," Foreign Minister Ursula Plassnik said.

No Swiss Surrender

Economists doubt, however, Switzerland will give up its banking secrecy or radically adjust its tax laws, saying the country is strong enough to defend itself against the EU's complaints. They note that Switzerland, as a member of the Organization for Economic Cooperation and Development (OECD), can effectively veto any decision by the OECD to blacklist it.

According to EU estimates, the world's tax havens, not including Switzerland, have attracted around $5 trillion to $7 trillion in assets because of low or nonexistent taxation. Swiss banks manage around $4 trillion in assets, about 50% from foreign individuals and institutions.

At present, only three European countries (God bless them!) - Liechtenstein, Monaco and Andorra - are on the OECD's tax haven blacklist.

* While you can there still are many legal ways to bank and save taxes offshore; I tell you Where To Stash Your Cash: Click Here. And if you're interested in Switzerland, Click here for Swiss Money Secrets.

Monaco - Tax Haven for the Very Rich

A few years ago The New York Times Travel Section unloaded on the Principality of Monaco as follows:

"Monaco — the platinum-plated name evokes scenes of a sun-drenched pleasure dome where European royalty drive Ferraris, poodles sport emerald collars and Lords Such-and-Such extol the virtues of Cuban cigars in the voice of Thurston Howell III. Glimpsing the fabled Casino de Monte Carlo only hammers the image home. Under the Côte d’Azur’s stars, equally glittery couples stride into the opulent 19th-century gaming halls, and lay down small fortunes at felt-covered tables once frequented by Mata Hari, the Rothschilds, King Farouk of Egypt and other aristocratic figures."

The 1.08 square miles of Monaco on the French Riviera is home to about 33,000 people, nearly 85% of them foreigners, most very wealthy. This unique and ancient principality is not for everyone. For those who wish to make this their permanent home, it helps to have a great deal of money and an assured income for life.

And it doesn’t hurt to know H.S.H. Prince Albert II and the members of his royal family, (not counting his illegitimate offspring).

Tax Haven Extraordinaire

A major reason we recommend Monaco, (for those who can afford it), is because it is a true tax haven for the exceedingly wealthy – and great wealth is what it takes to afford living here. It’s home to many millionaires and billionaires from around the world, many of them retired and enjoying the good life.

Aside from beautiful weather and a spectacular view of the Mediterranean, undeniably, there are tax benefits to be gained from living in Monaco.

The authorities do not like the Principality to be known as the "tax haven" that in fact it is. Since 1869 there have been no income taxes for Monegasque nationals and resident foreigners, one of the main attractions for high net worth individuals. There are no direct, withholding or capital gains taxes for foreign nationals, (except for the French, who because of a bilateral tax treaty with Paris, cannot escape the clutches of the French tax system).

Land Ho!

But one of the problems in Monaco has been the lack of real estate in this second smallest country in the world. Property prices rival those in New York and London, with small studio apartments selling in excess of a million euros (US$1.4 million).

That is about to change with a planned expansion of new terra firma to be carved out of the sea with landfill. It's all part of an ambitious project Monaco is undertaking to extend the size of its land and improve the amount of real property available, including new housing, a museum and schools on a new island which is rumored to be called "Princess Grace Island."

It to be named for the late Oscar-winning American actress, the former Grace Kelley of Philadelphia, who married the late Prince Rainier and helped to put Monaco on the world map. The current ruler is their son, Prince Albert II.

It's predicted that the landfill project, due to be completed in 2014, will add approximately 10 hectares (25.5 acres) of land, or the equivalent of about 13 football stadiums.

The plan is to increase available housing by at least 10% which will mean room for at least another 3,000 people, a population increase of 10%. New hotels are planned to attract the ultra rich tourists that love to frequent Monaco, mooring their yachts in the harbor and handing off their Aston Martins to a valet at the Monte Carlo casino.

* The Sovereign Society can provide our members with real estate and other professional contacts in Monaco upon request. I also have a chapter on Monaco in both my books, my latest version of The Passport Book, or explore legal tax-saving possibilities offshore in one of my best-selling books, Where to Stash Your Cash Legally: Tax Havens of the World.