Every year around Christmas, the Zapote district of the San Jose, Costa Rica is the host of some very unusual bull fights. They put about 200 untrained men (a lot of them drunk) in a closed ring with an unrestrained bull. Many of them, in their drunken stupor, arrogantly provoke the bull until one or more of them get mauled. These serious injuries could have been prevented, but it seems that they are oblivious to the dire consequences of their own actions until it’s too late.
Looking at those untrained bullfighters, I made a mental connection with some of the North Americans and Europeans that are scrambling to salvage their life’s savings though an offshore corporation. They have no training, yet they implement a plan based on what they think they know about the regulations from surfing the net. They often use an online service that’s not even located in the jurisdiction where they form their corporations.
In any developed nation, one of the most difficult specializations is tax law. Since international tax law involves the tax laws of more than one nation plus their tax treaties with all the other nations, the intricate details and interdependencies grow exponentially. It is very difficult for the citizens to make the right decisions by themselves, even for those that are experts as you’ve seen in the case of Robert Harris. It is for that reason that a judge once said, “Some may get it right, but most others don’t.” Why take a chance?
The complexity of the international tax laws, although detrimental for most people, works to the advantage of those that know the facts and loopholes that are relevant to their particular case.
You know all the details of your case, but not the best course of action when it comes to incorporating. If you get advice from an expert that knows the rules and regulations, you will get a match made in heaven. But it takes two to tango and in these times of economic uncertainty, you must take responsibility for your financial future and not rely entirely on “one fits all” solutions for such a complicated matter.
In many cases, it is appropriate to say that a man who represents himself has a fool for a lawyer. But we also know that lawyers, accountants and all advisors in general, make money by the hour. The more hours they work, the more money they make. Setting aside the eloquence about reputation and integrity, we have to recognize that they have a strong disincentive to keep their clients out of trouble.
In real life, some clients can serve themselves well, but they can always do it better with specialized advice. Even the worst advisors have some success, with some clients, sometimes; otherwise they wouldn’t remain in business. The thing that makes one advisor the best is his or her percentages. Of course that doesn’t help the small percentage of the losing clients that have used the best available advisors.
Therefore, the only strategy for staying in a winning situation would be to comply with the following procedure:
- Participate and clearly understand the relevant details of their case
- Communicate their details to their offshore advisors
- Study their advisors feedback and recommended solutions
- Monitor and double check every step of the implementation
Following the above procedure will enable the clients to ‘smoke out’ the incompetent advisors before they enter into a relationship. At the same time, they will become the alpha dog of the advisor that they decide to hire. Your dog will not be pissing in your neighbor’s pond if you keep it on a short leash. Your advisors will be boosting their income with their other, less informed clients that don’t keep a close eye on them.
Avoid errors and save time. Chat live with an offshore analyst, ask the right questions and get the answers you need.