
Seychelles is an offshore magnet for money launderers and tax dodgers - robdoherty2
http://www.icij.org/offshore/sun-and-shadows-how-island-paradise-became-haven-dirty-money
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contingencies
Very informative. Another tax haven many people are unaware of is the City of
London. George Monbiot puts it this way: _The Corporation of the City of
London is the dark heart of Britain, the place where democracy goes to die,
immensely powerful, equally unaccountable._ (See
[http://www.monbiot.com/2011/10/31/wealth-
destroyers/](http://www.monbiot.com/2011/10/31/wealth-destroyers/) and
[http://www.newstatesman.com/economy/2011/02/london-
corporati...](http://www.newstatesman.com/economy/2011/02/london-corporation-
city) )

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mseebach
That's probably because the City of London isn't in any meaningful way
whatsoever a "tax haven".

Fretting over the utter archaicness of the corporation, the power of the
financial lobby and the connection of actual tax havens to the city doesn't
make it a tax haven. Notice how the Monbiot piece is silly with irrelevant
footnotes (in case you're worried he's pulling your finger on the date of the
Lord Mayors parade, don't worry, it's carefully sourced) - except the bit
where he makes his central assertions?

Here's the relevant test: Does incorporating inside the jurisdiction of the
City of London change your tax liability compared with incorporating anywhere
else in London, in any way whatsoever (except business rates, which are
actually slightly higher in the city)?

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hackerboos
I did research on incorporating offshore when I was planning on becoming a
travelling freelancer.

The Seychelles came up as one of the easiest and cheapest places to
incorporate. Very little regulation.

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mynegation
Can you recommend any good resources that you found during your research?

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puddinghead
Many clients will not want to pay your freelancing invoice coming from a
Seychelles corporation. Payments to offshore tax heavens are red flags for
regulators and tax authorities and your clients will not want that risk.

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hackerboos
Invoicing isn't the issue - trying to get a bank account in the name of a
company in the Seychelles is very difficult.

I was told that people use Seychelles corporations as holding companies and
then incorporate in a more reputable jurisdiction such as Hong Kong.

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benologist
Does this whole thing depend on countries not publishing their registered
companies online? And becomes immediately transparent when they do?

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fred_durst
Its generally a collection of companies in various countries. They take
advantage of the fact that each country has unique laws. By stringing them
together you can eventually make it impossible to track to it's original
source. It's kind of like one way encryption in a really stretched analogy.

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benologist
It seems like you could just fly around obtaining or suing for the
information, so it's not really impossible it's just too expensive because the
data's not online yet?

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bsder
Obviously, with enough resources the information can be extracted. The US or
Russia clearly have enough resources to either dig through technically or
simply threaten to murder those who don't cooperate.

However, the real issue is that very powerful people are using these
techniques. So, governments have to worry that they're going to accidentally
trip over somebody who is powerful enough to cause problems. If you are a
bureaucrat examining what you think are low-level offenders but accidentally
stumble onto something held by Vladimir Putin, you're going to bury that post
haste so as not to endanger your life.

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67726e
> The US or Russia clearly have enough resources to either dig through
> technically or simply threaten to murder those who don't cooperate.

A government is not going to threaten to murder folks for not turning over
some financials. I think you've been reading too much Tom Clancy.

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jacques_chester
I'm descended from a Seychellois family on my mother's side (hence my French
name). It's a rotten paradise, sadly.

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nodata
Yeah okay, but how does the amount of lost tax revenue here compare to lost
_corporate_ tax revenue?

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dan_bk
You don't even need to go as far as the Seychelles to dodge taxes - there's
the inter-state tax dodging version called "Delaware" (although the incentive
is a bit weaker).

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michaelochurch
Right now, the hot commodity for corrupt officials, criminal billionaires, and
money launderers (domestic and foreign) is real estate in the U.S. (and in
Canada, esp. Vancouver). The U.K. is having the same problem. Even if this
seems like a small percentage of purchases (but it's not; in London,
foreigners laundering money make up about 75% of the purchases) it combines
with price inelasticity to make prices go through the roof: several times what
they would be otherwise.

Take China as an example (mostly, just because it's a very large country)
where corruption is a death-penalty charge. If things turn against you, you're
going to need not only a new identity (for your entire family) but possibly a
new face (not exaggerating). The West Coast has some of the best plastic
surgeons, but it also has expensive houses (which you can borrow against) and
tech companies (where non-technical executive positions involve zero
responsibility and make great sinecures). The sort of high-level makeover
process these guys involves buying a career (including fake references) and
being inserted in an executive sinecure somewhere, but that takes about 3
years, so you need 3 years' worth of cash before you can start earning on your
own again. With most assets frozen and the previous identity gone, the house
(delivered through a shell company to the new identity) _is_ the only reliable
store of wealth. Silicon Valley is attractive to the world's criminals because
it's the one place where you can have $4 million of "wealth" tied up in a
house and not raise an eyebrow.

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stfu
Interesting idea - the main thing I would object to is _because it 's the one
place where you can have $4 million of "wealth" tied up in a house and not
raise an eyebrow._

If you go to any first world capital/metro region you can spend that money
easily at a decent apartment. No matter if it is Hong Kong, Paris or New York,
$4m are actually not that much money for decent real estate.

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michaelochurch
Fair point. The cancer of the global elite has spread to quite a large number
of cities: certainly not only London and NYC.

Silicon Valley, I think, is more attractive because if you're going to make
over an exiled corrupt official into a corporate executive with a completely
different CV and identity, the privacy advantages of a free-standing house are
pretty compelling.

Also, it's easier to pull one over on tech people (see: highly talented young
people working 80+ hour weeks for tiny pieces of equity). If you need to turn
a corrupt official into an executive, you're going to have an easier time of
it in some flake-ball VC darling than at Goldman Sachs.

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trhway
don't forget how easy it is to launder money through internet advertising.

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kazinator
Cough ...

"She sells shelters to tax shills by the Seychelles sea shore."

:)

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dsl
The only time I have ever wished "Hacker News Gold" was a thing.

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tferraz
what is the new news here?

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dang
Most interesting things aren't new.

