Forbidden Knowledge Information They Don’t Want You to Know Sixth Edition Robert E. Bauman JD Editor SOVEREIGN OFFSHORE SERVICES LLC. (The Sovereign Society) 98 S.E. Federal Highway, Suite 2 Delray Beach, FL 33483 TEL: 561-272-0413 Internet: http://www.sovereignsociety.com Email: [email protected] Copyright ©2010 Sovereign Offshore Services LLC. All international and domestic rights reserved, protected by copyright laws of the United States and international treaties. No part of this publication may be reproduced in any form, printed or electronic or on the worldwide web, without written permission from the publisher, Sovereign Offshore Services, LLC., 98 SE 6th Ave., Suite 2, Delray Beach, FL 33483. Notice: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold and distributed with the understanding that the authors, publisher and seller are not engaged in rendering legal, accounting or other professional advice or service. If legal or other expert assistance is required, the services of a competent professional advisor should be sought. The information and recommendations contained in this book have been compiled from sources considered reliable. Employees, officers and directors of The Sovereign Society do not receive fees or commissions for any recommendations of services or products in this book. Investment and other recommendations carry inherent risks. As no investment recommendation can be guaranteed, The Society takes no responsibility for any loss or inconvenience if one chooses to accept them. The Sovereign Society advocates full compliance with applicable tax and financial reporting laws. U.S. law requires income taxes to be paid on all worldwide income wherever a U.S. person (citizen or resident alien) may live or have a residence. Each U.S. person who has a financial interest in, or signature authority over bank, securities, or other financial accounts in a foreign country that exceeds $10,000 in aggregate value, must report that fact on his or her federal income tax return. An additional report must be filed by June 30th of each year on an information return (Form TDF 90 22.1) with the U.S. Treasury. Willful noncompliance may result in criminal prosecution. You should consult a qualified attorney or accountant to ensure that you know, understand and comply with these and any other reporting requirements. About the Editor: Robert E. Bauman, JD Mr. Bauman, legal counsel to The Sovereign Society, served as a member of the U.S. House of Representatives from 1973 to 1981. He is an author and lecturer on many aspects of wealth protection. A member of the Dis- trict of Columbia Bar, he received his juris doctor degree from the Law Center of Georgetown University in 1964 and a degree in international relations from the Georgetown University School of Foreign Service in 1959. He was honored with GU’s Distinguished Alumni Award in 1975. He is the author of The Gentleman from Maryland (Hearst Book Publish- ing, 1985), and of the following publications of The Sovereign Society: The Complete Guide to Offshore Residency, Dual Citizenship & Second Pass- ports (7th ed. 2009), Where to Stash Your Cash Legally: Offshore Financial Centers of the World (4th ed. 2009), Swiss Money Secrets (2008), Panama Money Secrets (2005), Forbidden Knowledge (2004), and The Offshore Money Manual (Society, 2000). He also served for nine years as founding editor of The Sovereign Society Offshore A-Letter, an Internet e-letter received daily by more than 225,000 readers worldwide. His writings have appeared in The Wall Street Journal, The New York Times, National Review and many other publications. Forbidden Knowledge Information They Don’t Want You to Know Sixth Edition Robert E. Bauman JD Editor 2010 Table of Contents Preface ............................................................................. 11 One: The Meaning of Natural Liberty .............................15 Two: Second Passports & Dual Nationality .....................65 Three: Offshore Banking: Privacy & Asset Protection ....123 Four: The Matter of Cash ..............................................191 Five: Investments . .........................................................227 Six: Your Finances & Estate Planning ............................301 Seven: Taxes & How to Avoid Them Legally .................371 Eight: Offshore Tax Havens ..........................................445 Nine: Very Special Places ...............................................481 Ten: Personal Privacy .....................................................592 Eleven: Personal Security ..............................................655 Appendix I: Author Biography ......................................679 Appendix II: Glossary ....................................................687 Preface “Just as the State has no money of its own, so it has no power of its own. All the power it has society gives it, plus what it confiscates from time to time on one pretext or another; there is no other source from which State power can be drawn. Therefore every assumption of State power, whether by gift or seizure, leaves society with so much less power; there is never, nor can be, any strengthening of State power without a corresponding and equivalent depletion of social power.” — Albert J. Nock (1935) “Knowledge itself is power.” — Francis Bacon, Meditationes Sacrae (1597) In the age-old struggle for individual liberty against the power of the state, there can be no question which side has triumphed throughout most of the twentieth century. The one interest the state willingly sacrifices to the “common good” is personal liberty “the freedom to produce and create, to buy and sell, to speak and publish, to travel, to live freely.” By diminishing liberty, government systematically subverts people’s responsibility for their own lives. It robs those who produce in order to placate those who only consume. The result is economic stagnation, ret- rogression and political corruption. Since the seventeenth century, in England, France and America, and more recently in Russia and Eastern Europe, revolutions against this tyranny of the state were fought on behalf of an alternative we can call “natural liberty.” At first successful, over time these revolutions cooled to complacency and hard-won freedom came to mean guaranteed entitlement to govern- ment largess. True natural liberty means that each of us is the sole legitimate owner of our own life and destiny, free to act as we wish so long as we use no violence, fraud or other aggression against others. That same freedom dictates a free-market economy enjoying peace- ful production and trade. It opposes government control by self-serving politicians. 12 Forbidden Knowledge No activity of statist government has diminished personal liberty more than the unchecked power to tax. In the United States, the United King- dom and Germany the effective rate of personal taxes far exceeds 50 percent of earnings. In some nations, such as France and Sweden, it is higher still. Business is taxed at even greater levels. And everyone pays the ultimate price. When government takes wealth from some and gives it to others, this forced redistribution diminishes the rights and well-being of the former, and often destroys the independence of the latter. The issue of taxation involves nothing less than the human and natural right to own, use and enjoy private property, a “civil right” of the most basic kind. Property and wealth determine personal power to control our own lives, to make decisions, to raise a family, to live free. As Albert Jay Nock noted, every additional tax imposed diminishes our freedom. In an economic history of the Middle Ages, Paul Craig Roberts, the economist and columnist, showed that medieval serfs bound to the land and their masters rarely paid more than one-third of the value of their labors in taxes. For good reason: with very low productivity, serfs could not survive if forced to pay more taxes. With nothing to lose, they would revolt and kill the tax collectors. Yet a half-millennium later, with capitalism’s enormously increased productivity, we have even less right to our earnings than did those enslaved serfs. Says Roberts: “You are not free when you do not own the product of your own labor.” This book,Forbidden Knowledge, is a compendium of the acts and ideas of dynamic men and women who have exalted natural liberty in their own lives — and many do so to this day. Albert Camus said, “Revolutionaries are men who say no!” These authors have said an emphatic “NO” to Big Brother government. These practical people refuse to bow down to government, to submit to bureaucratic demands for ever higher taxes, greater controls and increased regulation. In some cases this has meant leaving the nation of their birth and mov- Preface 13 ing to countries that still believe in and practice natural liberty. There are such places, as you will see. Some individuals you will meet in these pages call no single nation “home,” spending the changing seasons of each year in many places where they do business, and enjoy the new experiences and the pleasures life has to give. Drawing on their experience, you too can have a life of natural liberty. You too can live, work, invest and do business without having to pay taxes to any government anywhere. And you can do this legally and with maximum personal security and financial privacy. To knowledgeable people, true financial security means: • the maximum possible