Offshore account? Think again.

Yuriy A's picture
Rank: Orangutan | 287

The primary response to the financial crisis by the U.S. government was to put in place many new regulations that covered everything from setting up a business to centrally clearing all derivative trading.

I was recently listening to a video blog posted by Peter Schiff, he was mentioning that he would like to expand his Europacific Capital business, but said that it is becoming increasingly hard to do so state side because of the massive compliance measures and regulations set forth by U.S. government entities that make it too expensive for Europacific and other businesses to create jobs here. The alternative is to set up the new business overseas which would take away any new tax revenue in the U.S. and more importantly any new jobs that the U.S. desperately needs.

Bloomberg wrote an article today that spoke about the difficulties offshore managers face when dealing with the new American wealth management client. A law passed in 2010 that will take effect on Jan 1st 2013 will require all offshore banks handling American PWM clients to disclose any income or accrued interest to the IRS. For these banks the trouble and extra work is not worth the potential gains that can come with managing Americans' money. The banks would have to set up entire new teams to deal with the account opening and trading compliance that would come with catering to American clients.

These examples along with the Volker Rule, Dodd-Frank, and other regulations are counterintuitive to the economic growth that the country needs by preventing new businesses from growing or even starting up. It is unfortunate that the regulations intended to protect the consumers are instead hurting the growth of the economy.

Comments (8)

May 9, 2012
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If I had asked people what they wanted, they would have said faster horses - Henry Ford

May 9, 2012
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The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

May 9, 2012
May 10, 2012
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Making money is art and working is art and good business is the best art - Andy Warhol