Offshore Dictionary - Terms Explained

This dictionary should be helpful in understanding the meanings of words used in the
world of Offshore Banking and Offshore Incorporation.

Anonymous Bearer Share Corporation – In this corporate structure the ownership of the
corporation is not recorded in any registry or database thus the owners are anonymous. The
owners hold the physical shares of stock. There is no reportage of transfers of ownership either.
Panama is the last place you can get a truly anonymous bearer Share Corporation with no
loopholes and no financial statements to file and no tax returns to file. In Panama we refer to this
anonymous bearer share corporation as a Sociedad Anonyma which is abbreviated as S.A. at the
end of the corporation name.

Anonymous Foundation – This is found in Panama in the form of a Private Interest Foundation.
It is anonymous in that the beneficiaries need not be revealed or made public. There are
foundation council members which are nominee which means they do not know you. There is also
a founder which is often provided by the forming law firm so as to not reveal the person behind
the foundation. Foundations may or may not have protectors. Foundations can have secret
instructions as to how the assets of the foundation are to be dealt with. Generally foundation
assets are non sequesterable which means non freezable.

Anonymous Offshore ATM Card – This term refers to a card that is ATM only and has no name
printed on the card. This assures one of greater privacy when drawing money out of an ATM
machine in that the bank and operator of the ATM machine does not get your name. Today all
ATM and Visa cards must have ID on file for each card which is a government issued ID like a
Passport and often a utility bill is required. When you are acquiring the card through a seller in a
privacy oriented jurisdiction there is a reasonable amount of privacy.

Anonymous Real Estate Ownership – this is accomplished through titling the real estate in the
name of an anonymous bearer share corporation or in the name of the anonymous Panama
foundation (fundacion).

Apostille – This is a commonly encountered signature verification process. One first goes to a
notary public to get a document signed and notarized. After this is done one takes the document
to an Apostille who certifies that the notary is a true and correct licensed notary. It is sort of
verifying the notary. Apsotille certificate are usually quite official with seals, signatures stamps
etc. Our law firm only requires them for immigration document verification in place of consulate
authentication of documents.

For more information on Apostille click here:

http://www.panamalaw.org/apostille.html

Asset Protection – This is a term applied to a person specializing in protecting the assets of
others generally in an offshore privacy friendly jurisdiction with strong bank secrecy and excellent
corporate privacy laws. Asset protection works better in a jurisdiction offshore to your own since
the lawyers, courts and government from your own country (there are still a lot of dictatorships
out there) have no authority in the offshore jurisdiction, so it is often referred to as offshore asset
protection.
Bahamas Offshore Banking – This is an offshore banking and incorporation jurisdiction that was
at one time private but is no longer popular. For more information on the Bahamas as an offshore
jurisdiction click here:http://www.panamalaw.org/jurisdictions_to_avoid_bahamas.html

Bank – A financial institution that is licensed and regulated by a government that accepts third
party deposits and can make loans.

Bank Secrecy – A term applied to offshore banks that are located in a jurisdiction with string
bank secrecy laws such as Panama.

Balloon Payment - A large or balloon payment due at the end of a loan, typically a home or car
loan, to pay off the amount the payments didn't previously cover. Often used as a loan type in
offshore banking and asset protection. A foundation can make a loan to a natural person who then
pays interest only for 60 months and then at that time must repay the principal or roll the loan
over for another term.

Bearer Bond – This is an instrument where one could carry a government or solid rated bond for
$100,000,000 and there is no ID required to negotiate it, well at least back in the 1980’s anyway.
Why one would feel good about a piece of paper worth so much money is beyond me. This is not
something very often encountered.

Bearer Share Corporation – This is a corporation that is formed with bearer share stock
certificates. This means the ownership of the bearer share corporation is based on who owns the
physical stock certificates. With a Panama Bearer Share Corporation there is no recording of the
owners in any registry or database nor is there any recording pertaining to the transfer of the
ownership thus it is an anonymous corporation.

Beneficiary - A person legally entitled to receive benefits through a legal device, such as a
Panama Foundation also called a Fundacion in Spanish. In Panama foundations the beneficiaries
can remain off the public records, anonymous is a good word.

Corporate Agent – Generally a non-lawyer that can form corporations in certain offshore
jurisdictions. These people are not attorneys and thus one has no attorney client privilege in
dealing with them.

Garnishment - A court-ordered process that takes property from a person to pay a debt. For
instance, a person who owes money to a creditor may have her wages garnished if she loses a
lawsuit filed by the creditor. Offshore garnishment orders are not valid in countries like Panama.

Grand Cayman Offshore Banking – This refers to banking the offshore jurisdiction of Grand
Cayman Islands, also called Cayman Islands. It was at one time in the past a popular offshore
banking and incorporating jurisdiction but no longer so.

For more information on the Grand Cayman Islands click here:

http://www.panamalaw.org/jurisdictions_to_avoid_cayman.html

Guillotine Clause – This was an offshore banking trick that worked like this: The offshore bank
was given standing wiring instructions to immediately wire the total amount of money in a
particular off shore bank account to another bank account in another off shore jurisdiction the
very instant any inquiries were made concerning that account by any interested parties. Of course
the next bank would have similar instructions and so on down the line so the money could almost
stay in constant motion. While banks are no longer allowed to have such Guillotine instructions, a
Panama Foundation can have them and execute them by having the foundation protector
generate instructions based on certain events spelled out in the Foundation secret instructions
pertaining to any asset the foundation has.

Heir - One who receives property from a deceased individual. The term is used commonly when
discussing Panama foundations and trusts.

Internet Banking Offshore – This term references a bank that allows clients to access their
bank account using the internet from anyplace in the world.

Judgment – This is a term to reference a decision rendered by a court after it has heard a case.
It may say so and so has to pay the other entity so much money. In the world of offshore asset
protection judgments from other countries are generally not enforceable in the offshore
jurisdiction as is the case with Panama.

Jurisdiction - The authority of a court to hear and decide a case. Generally in offshore
jurisdictions the courts will not hear a case when the events occurred outside of say Panama and
the only reason the case is being brought to Panama is because the entity was a Panamanian
Corporation and or there was a Panama bank account involved.

MLAT or Mutual Legal Assistance Treaty – This is a treaty where certain countries agree to
help certain other countries obtain evidence in criminal cases. These treaties are full of
exceptions, special clauses so there is no universal formula for these, they vary from treaty to
treaty.

Natural Person - This is a common offshore legal term meaning a living breathing person as
opposed to an unnatural person such as a corporation.

Nominee Directors – In an anonymous bearer share corporation or a Sociedad Anonyma,

directors of the corporation are recorded in the public registry, owners are not recorded. So what
is done is nominee directors are used who are paid employees and do not know you at all. These
people are generally professional directors sitting on the boards of hundreds of corporations
seriously confusing anyone trying to track down information from the public registry about any
corporation filed in Panama. The nominee directors in Panama are a dead end as far as this is
concerned. We normally supply resignation letters from each nominee director giving you control
over them. If you are the signatory on a bank account in Panama the banks will not add
signatories or remove signatories without the written permission of the existing signatory.

Nominee Panama Foundation Council Members – These are professional council members
who sit on hundreds of foundations and do not know you. We normally supply a resignation letter
for each of them allowing you to replace them at will. One can use a Sociedad Anonyma Panama
corporation instead of nominee Panama foundation council members.

Offshore – This is a term that means outside of your own jurisdiction, water is not a necessary
ingredient.

Offshore ATM Card - This is a card that must be preloaded with funds before the funds are
available for withdrawing from an ATM machine or used at a POS (point of sale) location for a
purchase. These cards do not have a MasterCard or Visa logo and are not credit cards and thus
can not be used online.

Offshore Bank - The term refers to a licensed bank that is located in a jurisdiction different from
your own country.
Offshore Banking – This term is used to refer to a bank located in a jurisdiction different than
the one you are in. Panama is offshore for someone in the UK and Nassau is offshore to someone
located in Panama. The term does not necessarily refer to a bank in an island jurisdiction. For a
person in France a German Bank would be offshore. Offshore banking has little to do with bank
secrecy. In some jurisdictions offshore banking licenses are issued to offshore only banks. These
offshore banking licenses are restricted banking licenses that do not let the bank engage in
business in any way shape or form with the resident of the country. Panama does not have any
such garbage banks.

Offshore Banking and Bank Account – This is a phrase used by people to reference a bank
account opened up in an offshore bank. This phrase is not a legal or banking term but nonetheless
is a popular term anyway.

Offshore Bank Account – The term refers to one opening a bank account in an offshore bank. It
does not necessarily mean a bank located in a tax haven country, just a bank located in a country
offshore or foreign to your country.

Offshore Banking Account – This is a term pertaining to a bank account that is maintained in
an offshore jurisdiction other than ones own country.

Offshore Company – This term refers to a company that is formed in a jurisdiction offshore to
ones own jurisdiction. It is another way of saying offshore corporation.

Offshore Company Formation – This is the formation or creation of an offshore company. A

similar term would be offshore incorporation. In the world of offshore formation is a term often
used in place of the word incorporation.

Offshore Company Incorporation – This term refers to the act of forming a corporation bearer
share or otherwise in an offshore jurisdiction relative to your own country. The incorporation
process varies from country to country. In some countries only a lawyer may file a corporation
and in other countries registered agents can do so.

Offshore Company Registration – This term describes the act of registering an offshore
company or corporation. One may register an offshore company formed in the same jurisdiction
as where it is registered or one could register an offshore corporation from a foreign jurisdiction in
which case certain registration rules may apply to domesticate the offshore company in the
registration jurisdiction. In some jurisdictions the registration process could compel revealing the
ownership, financial records etc thus destroying any anonymity features the underlying corporate
formation may have.

Offshore Corporation – The term refers to a company that is formed in what is considered to be
an offshore jurisdiction relative to the jurisdiction you are located in. An offshore corporation does
not necessarily need to be located in a tax haven company. This means an offshore corporation
could be formed in a country with a high corporate tax basis or the term could just as easily apply
to a corporation formed in a country with a zero or very low tax basis like Panama which only
taxes corporations $300 per year if all their income is offshore derived.

Offshore Credit Card – This is a card issued from a bank that is offshore. The credit card comes
with a line of credit and does not have to be pre-loaded from your own funds. It is very rare to
ever see an offshore bank issue a credit card without securing the line of credit with funds held by
the bank.

Offshore Debit Card – This refers to a debit card which is issued by a bank or card issuer that is
located offshore to where you are located. The term can be applied to a card which requires that
funds be in the bank or placed in the card account prior to being available on the card. The term
can apply to a MasterCard or Visa card as well as an ATM only card.

Offshore Formation – This is term referring to the creation of a corporation, foundation, or trust
in a jurisdiction offshore to where you are located.

Offshore Foundation – Term used to mean a foundation formed outside of your own
jurisdiction.

Offshore Haven – A term mused to apply to a jurisdiction with no taxation on offshore derived
income like Panama.

Offshore Incorporation – This is a term pertaining to the formation of a corporation in an

offshore jurisdiction. Panama is a popular offshore incorporation jurisdiction with over 400,000
corporations registered here.

Offshore Incorporation Services – This is a term applied to a firm that forms offshore
corporations. Usually the same firm would also form an offshore trust or offshore foundation.
Sometimes the entity doing the offshore formations is a law firm and sometimes they are just
corporate agents.

Offshore Lawyer – The term generally applies to a lawyer located in what is considered to be a
popular offshore jurisdiction for the formation of offshore corporations, offshore trusts, offshore
foundations and opening of offshore bank accounts. These lawyers engage in the activities and in
asset protection in general.

Offshore Stock Broker- This term refers to a stock broker located in an offshore jurisdiction.
Bank secrecy and taxes have no meaning here.

Offshore Tax Haven – A country in which there is usually a zero tax basis where offshore banks
exist and offshore corporations can be formed.

Offshore Trust – This is a term that simply refers to a trust that is formed in an offshore
jurisdiction. In Panama we have trusts but the foundations are so much better and they avoid the
stigma associated with a trust.

Online Banking – Internet access to your bank account allowing one to check balances, transfer
between accounts and launch international wires from anywhere in the world.

Onshore – The term is generally applied to your jurisdiction meaning in your own
country or jurisdiction.

Panama Foundation – In Panama we call this a Panama Private Interest Foundation. Panama
Foundations can have bank accounts that are non-sequesterable or non-embargoable which
means the bank account or other assets are not freezable unless under special circumstances. A
Panama Private Interest Foundation is a combination of a will, trust and corporation n wrapped up
into one entity. You can leave assets for your heirs, use the foundation as a holding company, and
use it to preserve assets for your retirement. Panama foundations are not supposed to engage
directly in business activities for profit but can own Panama corporations that do engage in for
profit commercial activities. A Panama Foundation has council members similar to a corporation
having a board of directors. We use nominee council members who do not know you or instead we
can use a Panama bearer share corporation called a Sociedad Anonyma in place of the council
members and if you own the shares of the corporation you have a large degree of control.
Pensionado Visa – A Panama permanent residency visa issued to retired people that comes with
a basket of benefits.

Reforestation Visa – A Panama visa that is relatively easy to get requiring one to invest $40,000
in a reforestation project.

Secret Bank Account – There is no longer any such thing. One needs to bank in an offshore
jurisdiction that has bank secrecy. Today the Panama Bank Secrecy laws are the strongest in the
world.

Sociedad Anonyma – This is the Spanish term for an anonymous bearer share corporation
where there is no recording or registration of owners of the corporation as is done in the Republic
of Panama.

Sparbuch Account – These bank accounts were all ended in 2002 yet they curiously are still
fraudulently sold on the internet. They were issued from banks in Austria. You got a special
passbook enabling you to conduct banking inside the branch of an Austrian bank using the book
as sole ID; it was a numbered password protected offshore bank account. You were also able to
take out $20,000 a day from special ATM machines in Austria anonymously. When these accounts
were around most people ignored them because it required trip to Austria and the inconvenience
of moving cash around.

Swedish Credit Union – In reality a financial corporation filed in Sweden called an Ekonomist
Forening. These are frequently tied to a Panama financial services corporation. This offshore
formation may act similar to a genuine credit union which it is not; it just is sold with the words
credit union in the corporation name. Generally the owners of these structures have massive
difficulties getting and keeping a correspondent bank. While not a scam exactly it is a product that
is likely to fail fast for lack of a correspondent bank.

Swiss Numbered Bank Account – These at one time in the 1980’s were dead anonymous bank
accounts, thus no need for anonymous bearer share corporations. The bank itself had no idea who
you were and you operated the account through passwords. These accounts are long gone. Now
the next generation numbered Swiss bank account means the bank knows who you are but only
certain people inside the bank can access that information. No longer anonymous and they will
raise a red flag whenever they are used for wire transfers. A Panama bank account with an
anonymous bearer share corporation accomplishes the same thing but does not raise red flags.

Tax Haven – This term describes a country that has little or no income taxation. Some of these
jurisdictions survive on import duty taxes. Others like Panama make offshore income exempt from
taxation and instead impose a fixed tax of $300 a year on a corporation. Panama is a tax haven.
Tax haven is a term that has nothing to do with bank secrecy.

Tax Treaty – A tax treaty is a treaty two or more countries have with each other regarding
taxation. Some of these treaties call for information sharing about bank accounts. Some of these
treaties call for no double taxation so if one pays tax in one jurisdiction that tax counts against the
tax they owe from the other jurisdiction.

Virtual Visa or MasterCard – This is a card that is issued by email only. It is only useable online
since no physical card is ever delivered. ID is required for this card usually.

Writ of Mandamus – This is Latin for "we command." A writ of mandamus is a court order that
requires another court, government official, public body, corporation or individual to do something
it so orders. Jurisdictions like Panama generally ignore such orders from other jurisdictions.
http://www.panamalaw.org