We see web sites out there offering offshore services like assisting with bank account openings that offer to be the signer on the account for the customer. This frequently results in trouble for the customer. Let us discuss this in detail.

First off these people have no idea what you or any other customer is doing with the bank account. They risk being complicit in any illegal activities the person may be involved in and thus drawn into investigations, being served with subpoenas, notices of deposition, being arrested and other court orders. So if one of their clients is a bad guy all their records for all their clients including you will come under disclosure and scrutiny. No attorney client privilege or bank secrecy to shelter you and your privacy. Not good.

Attorney Client Privilege is a big missing piece of the asset protection structure. These people are not lawyers. They can not offer you privileged communication. The signatory is often free to do whatever he or she wants with the information they have about you and your affairs. It is also easy to obtain records from them by court order since there is no attorney client privilege being violated. Remember the signatory must have and keep records showing who is in fact ordering him to disburse funds. This is to protect himself from being prosecuted for embezzlement. This also means the signatory is going to have a copy of your passport and other ID plus a contract executed by you appointing them with details as to how things are going to be executed. Not so good either.

Bank Secrecy is also missing even though you may be using a bank in a country like Panama where there is bank secrecy. You have no dealings with the bank, only the signatory does so the bank secrecy does not protect you.

Embezzlement is another problem. What if the signatory arranges for the online bank access to be obtained by someone who depletes the account by wiring funds to Vietnam or Nigeria and then the signatory claims he has no idea what happened. Maybe he got hacked. There is no trail to him so what are you going to do? This is not the time to be going back and reading the agreement you signed with them for the first time. You'll find they have no liability unless you can prove they were the thief. You are not dealing with a lawyer, you are dealing with a broker of corporations located in some offshore island jurisdiction. Want to go there and sue them? Think you'll win when you signed their documents?

As a safe alternative read this section on protectors of Panama Foundations.

http://panamalaw.org/foundation_protectors.html

It is a way to protect your money without being the signatory on the account. There is a way to make the bank the trustee of the account and as trustee they can be the signatory. You can still be the protector and thus need to approve all outgoing transactions, without your approval nothing leaves the foundation bank account. You are the protector not the signatory. Having the bank as the trustee and being the signatory is not exactly the same as using some corporation reseller located on some offshore island. There would be bank secrecy to protect the structuring of the account. Anything your attorney did would be privileged communication. The bank would need to understand the nature of your business, they would be on guard for money laundering, ask questions about bank account activity, suspicious wires to risky countries like north Korea for instance, they would know exactly who you are, etc. But everything would be protected from disclosure and you are dealing with a Panama licensed financial institution. Does this sound better?

http://www.panamalaw.org/panama_signatory_services.html
http://www.panamalaw.org/panama_financial_services_corporation.html

For more information, please visit:
http://www.panamalaw.org
email at: panamalegal@hush.com