# Off-Shore Banking

**URL:** <https://boards.straightdope.com/t/off-shore-banking/109573>\
**Category:** Cecil's Columns/Staff Reports\
**Created:** [May 17, 2002, 3:56pm UTC](https://boards.straightdope.com/t/off-shore-banking/109573 "2002-05-17T15:56:19Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![Humble\_Servant](https://avatars.discourse-cdn.com/v4/letter/h/47e85d/32.png) [@Humble\_Servant](https://boards.straightdope.com/u/Humble_Servant)\
**Post date:** [May 17, 2002, 3:56pm UTC](https://boards.straightdope.com/t/off-shore-banking/109573/1 "2002-05-17T15:56:19Z")

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[Here’s the link to the column.](http://www.straightdope.com/columns/020517) (Mods–feel free to move this thread if it more properly belong in Comments on Staff Reports.;))

> [@](#):
>
> The banks provide services that let you invest in almost anything, anywhere. So you can think of your account as an investment account rather than just a bank savings account.

Very true. You can also think of your account representative as your personal facilitator. I have seen off-shore bankers make travel, hotel, car, restaurant, golf and snorkeling arrangements for customers when they visit. While the column limits discussion to individual opportunities, there are also many reasons for setting up corporate entities in the Caymans or Bermuda. If you do this, then of course you will want to have your annual board and shareholder meetings offshore. Corporations can reimburse their directors for meeting expenses, including travel (these are business expenses, deductible by the corporation and not taxable to the individual). The junkets that get arranged can be quite impressive.

Of course, offshore bankers aren’t altruists–as the column mentioned, “the postage and bank fees” also can be quite impressive.

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**Author:** ![jebert](https://avatars.discourse-cdn.com/v4/letter/j/ec9cab/32.png) [@jebert](https://boards.straightdope.com/u/jebert)\
**Post date:** [May 17, 2002, 5:57pm UTC](https://boards.straightdope.com/t/off-shore-banking/109573/2 "2002-05-17T17:57:09Z")

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You forgot to mention “variable annuities”. Although IRA’s and 401(k) plans have maximum annual contribution amounts, some of the same tax advantages can be had with variable annuities, which are perfectly legal. These can be purchased in vastly larger amounts and can be set up to offer a variety of investment options involving stock or bond mutual funds. As with IRA’s and 401(k)'s, the earnings accumulate tax deferred until withdrawal - no taxes while the money stays in the account. And, as with IRA’s and 401(k)'s, money withdrawn from a variable annuity is taxed at ordinary rates, not the more favorable capital gains rates.

But unlike IRA’s and 401(k)'s, there is no tax advantage when you put money into a variable annuity.

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**Author:** ![C\_K\_Dexter\_Haven](https://avatars.discourse-cdn.com/v4/letter/c/b2d939/32.png) [@C\_K\_Dexter\_Haven](https://boards.straightdope.com/u/C_K_Dexter_Haven)\
**Post date:** [May 17, 2002, 6:22pm UTC](https://boards.straightdope.com/t/off-shore-banking/109573/3 "2002-05-17T18:22:27Z")

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\<\< But unlike IRA’s and 401(k)'s, there is no tax advantage when you put money into a variable annuity. \>\>

Hello? The article was citing **examples** of other non-taxable investment trusts, such as 401(k) and IRA.

You’re bringing up variable annuities seems totally unrelated to the topic of non-taxable trusts.

And Humble, what you say is true, and a worthy additional comment. The question Cecil addressed was focused on the investment advantage rather than the weather or other niceties like golf courses, etc.