After condemning other countries for helping wealthy Americans to hide their money offshore, the US is now becoming the main tax haven for wealthy foreigners, Bloomberg reports. Some are calling Reno, Nevada the new Switzerland.
While the US authorities persist on global standards of banking information disclosure, the country is resisting those same disclosure standards. The result has been the creation of a hot new market, specializing in hiding cash for wealthy foreign clients.
The trust companies, helping the world’s wealthy move their fortunes; have been opened in Nevada, Wyoming, and South Dakota.
“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”
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For decades, Switzerland had been the global capital of secret bank accounts. But that is changing. In recent years, more than 80 Swiss banks, including UBS and Credit Suisse, have agreed to pay about $5 billion to the US in penalties and fines for helping US clients evade taxes with undeclared accounts offshore.
The US “is effectively the biggest tax haven in the world,” Andrew Penney, managing director at Rothschild Trust told Bloomberg. The group has opened a trust company in Reno, Nevada, to help rich foreign clients move their accounts out of offshore havens such as Bermuda, subject to the new international disclosure requirements into Rothschild’s trusts in Nevada, which are exempt.