Delaware beats Switzerland as most secretive financial center

[Joanne98]

Source: Reuters

WASHINGTON (Reuters) -- Move over Switzerland. The tiny state of Delaware beats the Alpine country in a contest for the most secretive financial jurisdiction, a tax justice rights group said on Saturday.

The United States, led by the eastern seaboard state, took in $2.6 trillion in deposits from non-resident corporations and individuals in 2007, according to a survey of financial jurisdictions analyzed by the Tax Justice Network.

The survey of laws, practices and size of inflows in 60 jurisdictions found Delaware coming in first, followed by Luxembourg and then Switzerland. The Cayman Islands and the United Kingdom round out the top five.

"While the U.S. has been jumping up and down and saying 'Aha, bad, wicked Swiss banks,' the U.S. is doing exactly the same things as far as non-resident bank account holders," said Sarah Lewis, executive director of the group, based in the U.K.

Switzerland has been the poster child for financial secrecy over the past year. The United State sued Swiss global banking giant UBS AG, which paid a $780 million fine to settle a lawsuit against it by the government. As part of the deal, UBS admitted it actively helped Americans evade U.S. taxes.

The ranking is based on a composite of total offshore activity and measures such as whether a jurisdiction obtains beneficial ownership information about companies and the degree of cooperation in turning over requested financial information.

Delaware is attractive because it does not tax profits realized outside the state and does not require companies to be physically present, according to the Tax Justice Network.

UBS and Credit Suisse have about 200 entities in the state, according to the group.

There are nearly 700,000 active entities registered in Delaware -- and about half of those publicly traded in the United States, according to the group.

Total U.S. deposits of non-residents rose from about $1 trillion in 2001 to $2.6 trillion in 2007, according to the study.


Read more: http://www.reuters.com/article/newsOne/idUSTRE59U1VB20091101

[UpInArms]

1. Delaware's laws of incorporation have made it a hub

for those who want to hide their corporate lies

[roguevalley]

9. an unforgivable for me about Biden is how he helped ram through

the credit card and anti-bankruptcy laws a few ago. Fuck that.

[lagavulin]

14. This article completely misses the point!

The State of Delaware has no ability to over-ride Federal "know your customer" regulations (which became much stricter after 9/11 when new "anti-terrorism" rules went into effect for the entire banking system). Delaware must obtain the same information as every other State from potential account-holders. Also, incorporation in Delaware has little or nothing directly to do with taxation of foreign firms, so it's odd why it's even mentioned in the piece in the first place.

Here's what SHOULD have been mentioned in this report:

Goldman Sach - incorporated in the State of Delaware
Bank of America - incorporated in the State of Delaware
CIT Group - incorporated in the State of Delaware
Wells Fargo - incorporated in the State of Delaware
JP Morgan Chase - incorporated in the State of Delaware
Merrill Lynch & Co - incorporated in the State of Delaware
Lehman Brothers Holdings - incorporated in the State of Delaware
Bear Stearns Cos - incorporated in the State of Delaware
(Obviously the list could go on....)

This piece has nothing to do with Delaware, specifically, it's solely referring to the top-tier US banking & investment firms., which for well know reasons are pretty much all incorporated in Delaware.

"There are nearly 700,000 active entities registered in Delaware -- and about half of those publicly traded in the United States, according to the group.

Total U.S. deposits of non-residents rose from about $1 trillion in 2001 to $2.6 trillion in 2007, according to the study."

The elephant in the room here is: why has so much money been flowing into top-tier US banks, especially during a period when regulations regarding deposits from foreign sources have become VERY much stricter, and when global perceptions have been viewing the US as a country of increasing restrictiveness, NOT laxness...?

In other words, where is all this money coming from?

If you can answer that question, you're well ahead of the "awareness" curve for our society....also, you almost certainly don't work for the Mainstream Media.

[Orrex]

2. International repercussions

I'm going to keep posting this joke until it's funny, gosh dang it!!!!!1!

The President of Brazil is receiving his daily briefing, including a dim outlook for the country's technology sector. The president is eager to address the matter so that it doesn't become a drag on Brazil's economy.

"We need a tax haven for our computer industry," says President da Silva, "before too many companies hear about it."

"Delaware?" suggests the Vice-President.

"I don't know," the President reflects, "but Apple probably is."

[Algorem]

3. i'm sure Joe Biden would've cleaned it up. If he'd. Just. Had. Time.

[jberryhill]

7. And he was a DE state legislator when?

This article conflates several different things. Yes, it is easy to incorporate in Delaware. No, we don't have secret bank accounts.

[24601]

10. State legislation unnecessary - strong federal measures appropriate for any

firm engaged in interstate commerce. Perfect domain for Congressional action. Imperfect domain for Deleware re-election.

[No Elephants]

11. Not quite.

"The United States, led by the eastern seaboard state {Delaware}, took in $2.6 trillion in deposits from non-resident corporations and individuals in 2007, according to a survey of financial jurisdictions analyzed by the Tax Justice Network. (Later in the story we learn that the 2007 figure is more than double the 1 trillion figure of only 6 years earlier.)

<snip>

The survey of laws, practices and size of inflows in 60 jurisdictions found Delaware coming in first, followed by Luxembourg and then Switzerland. The Cayman Islands and the United Kingdom round out the top five.




Foreign corporations and individuals have nothing to do with the ease of incorporating in Delaware. Delaware's dominance in foreign accounts among all other US states, may however, have something to do with the fact that Delaware keeps certain information secret, or does not even ask for other information.

"The ranking is based on a composite of total offshore activity and measures such as whether a jurisdiction obtains beneficial ownership information about companies and the degree of cooperation in turning over requested financial information."



The article does go astry in throwing in info about the ease of incorporation, which is not relevant to foreign accounts, and incorrectly claims that may explain why the Delaware is leading the US in foreign accounts. But that fault on the part of the article's author or editor does not negate the survey or findings of the Tax Justice Network.


BTW, it's really not a whole lot easier to incorporate in Delaware than it is to incorporate in most other states. It once was, but the states did not like losing all thoe incorporation fees and corporate maintainance fees to Delaware. So, they changed their incorporation laws to be as easy or easier than those of Delaware. And every time Delaware changes its laws to make incorporation even easier, those states soon follow suit. Delaware still has the original reputation, but it is no longer based on reality.

[Solly Mack]

4. K&R

[BumRushDaShow]

5. DE & SD

These 2 need to be dealt with as far as any national financial reform.

[onehandle]

6. Just as long as we keep our eye on financial isolationist Switzerland.

Banking empires love to see the spotlight pulled away, if only for a short time.

[bertman]

8. I'm just glad we don't have any of our national leaders who are from this sleazy state.

:eyes:

[No Elephants]

13. Living in Delaware is not the problem. Enabling the financial industry, on the other hand....

Barney Frank's been doing great at that, and he represents a district in Massachusetts. And then, there was Phil Gramm

[No Elephants]

12. On the bright side, this brings more secret banking jobs to the US. Now, it

becomes more clear why the US is suddenly demanding that Swiss banks make everything public, after decades of looking the other way on Swiss accounts.

I thought the US wanted to help the taxpayer by spreading our burden more evenly. Maybe it just wanted knock out the competition of our domestic secret bankers.

I guess giving them the contents of the US Treasury was insufficient to sate their greed.

[Blue_Tires]

15. ttt