Owning foreign accounts or assets isn’t illegal, and it’s not inherently unlawful to fall outside FATCA’s scope. The real issue is knowing what counts as a reportable asset and making sure you’re not failing to disclose something that is covered.FATCA is primarily an information-reporting regime. For individuals, this means filing Form 8938 (Statement of Specified Foreign Financial Assets) if the value of certain foreign assets exceeds set thresholds. These “specified assets” include accounts at foreign banks or brokerages, as well as stock in foreign corporations.Not everything is reportable. Directly held real estate, personal property like art or jewelry, and assets inside U.S.-based retirement accounts are not covered by FATCA. But if you hold property through a foreign company, the company itself becomes reportable.A big source of confusion is the difference between FATCA and the FBAR (FinCEN Form 114). FATCA has higher thresholds ($50k+ for U.S. residents, higher for expats), while FBAR applies if your total foreign accounts exceed just $10,000 at any time. That means an account that doesn’t trigger FATCA might still require FBAR filing.What is illegal? Using foreign structures to deliberately hide income or assets. That’s when mistakes cross into tax evasion, false return filings, and willful FBAR violations—all of which can bring severe civil and criminal penalties.#FATCA #FBAR #USTax #TaxCompliance #OffshoreAccounts
An Expanded Affiliated Group (EAG) is defined under Code section 1504(a) and Treas. Reg. §1.1471-5(i). It generally means one or more chains of entities connected through ownership by a common parent. Normally, the parent must directly own more than 50% of another member’s stock or equity interests.In FATCA, the EAG rules are designed to prevent avoidance of reporting obligations. The “one bad apple” rule applies—if any member of the group is a non-participating FFI, then no member can claim participating FFI status.While the definition is based on corporate ownership, trusts or partnerships can be part of an EAG if they elect to be treated as such under Treas. Reg. §1.1471-5(i)(10). This makes it possible for a trust to act as the common parent of an EAG, provided the proper election is made.#FATCA #TaxCompliance #EAG #InternationalTax #FinancialInstitutions
Between 2017 and 2019, the OECD published FAQs and addendums to CRS to close loopholes—such as residence by investment, broad-based retirement plans, nil-value reporting on settlors, and the treatment of cash. FATCA, however, never addressed these loopholes. Eventually, the OECD abandoned the “whack-a-mole” approach and instead introduced Mandatory Disclosure Rules (MDR). But MDR was largely ineffective: few countries implemented it, and promoters in non-participating jurisdictions or under lawyer privilege were exempt.Example: a UK non-resident trust classified as a custodial institution with a trustee in Svalbard. It owns an investment entity company but reports nil, since the equity interest is in an FFI custodial institution. The trust, itself an FFI, has no reporting duties because Svalbard is excluded from the U.S. IGA. This makes the trust a non-participating FFI—yet it avoids FATCA’s 30% withholding, since it receives no U.S.-sourced income.#CRS #FATCA #TaxLoopholes #GlobalTax #TrustStructures #InternationalFinance
CRS and FATCA treat non-participating institutions very differently. Under CRS, non-participating Investment Entities are classified as Passive NFEs, meaning the paying agent must look through to the controlling persons. FATCA, on the other hand, penalizes non-participating FFIs that fail to register for a GIIN by imposing a 30% withholding tax on U.S.-sourced payments like dividends, interest, or asset sale proceeds. FATCA also pressures FFIs to close accounts of non-participating FFIs. However, FATCA’s reach is limited where no U.S.-sourced payments are received, such as when a custodial institution only holds company shares.#FATCA #CRS #GlobalTax #WithholdingTax #InternationalCompliance #CrossBorderFinance
Financial institutions do not report on account holders that are themselves financial institutions. This enables chains of entities, with each level classified as a financial institution. The weakness of AEoI arises when the top-level entity is a non-participating financial institution. FATCA and CRS only weakly address this vulnerability, leaving opportunities to establish structures that remain non-reportable.
The UAE has become a leading hub for Foundations, especially in DIFC, ADGM, and RAK ICC. These structures blend trust-like asset protection with company-style governance, making them ideal for families and businesses. A Foundation is a distinct legal entity with no shareholders, governed by a Council through its Charter and private By-laws. Assets are contributed by a Founder, with an optional Guardian ensuring oversight. Their flexibility, global appeal, and strong governance standards make them powerful tools for asset protection, succession planning, and wealth management.
UK trust structures offer unique privacy and asset protection benefits. Unlike the FATF model, the UK relies on the Person of Significant Control (PSC) framework, often recording trustees as controllers instead of settlors or beneficiaries. Non-UK and UK non-resident trusts usually avoid registration with HMRC or the Trust Registration Service, except in limited cases. When layered with tools like PPLI, UK companies can even file as dormant, bypassing audits. In certain setups—such as non-resident trusts in CRS non-participating jurisdictions—no CRS reporting is required, adding further confidentiality.
A sham trust occurs when a trust exists on paper but is not intended to operate genuinely. Key indicators include the settlor retaining excessive control, treating trust assets as personal property, lack of trustee independence, and abuse of fiduciary duties. A landmark example is the New Zealand case Clayton v Clayton, where the Supreme Court emphasized that proving a sham trust is challenging but possible. Courts can set aside a trust if it’s shown that the parties never intended to be bound by its terms and the trust was effectively a facade.
Offshore jurisdictions remain an important part of global finance, offering tax efficiency, privacy, and asset protection. But evaluating them requires more than just looking at low taxes. Four key factors stand out:Reputation: The strongest jurisdictions avoid blacklists and align with international standards, like Singapore, Hong Kong, and New Zealand.Banking: A stable, globally connected banking system is essential—but stricter KYC/AML rules can make access challenging.Secrecy vs. Privacy: Financial secrecy has shifted toward transparency under CRS, but reputable centers still uphold robust privacy protections.Asset Protection: Offshore structures can safeguard wealth from legal risks and foreign claims, though protections aren’t absolute.This episode breaks down what matters most when comparing offshore financial centers—and how to balance opportunity with compliance.
Offshore jurisdictions are often associated with secrecy and tax advantages—but the reality is more nuanced. These countries and territories provide favorable regulations, low or zero taxes, and enhanced privacy for non-residents. They can deliver clear benefits such as reduced tax burdens, asset protection, regulatory flexibility, and streamlined business structures. Common examples include the British Virgin Islands, Cayman Islands, Jersey, Isle of Man, Luxembourg, Switzerland, and Liechtenstein. While they offer legitimate tools for global business and wealth management, they remain at the center of ongoing global debates about transparency and compliance.
The Global Financial Centres Index (GFCI) is one of the most influential benchmarks for evaluating financial hubs worldwide. GFCI 37 ranked 119 centres, drawing on 140 instrumental factors from institutions like the World Bank, OECD, and United Nations—alongside over 31,000 assessments from nearly 5,000 respondents. Produced by the China Development Institute (Shenzhen) and Z/Yen Partners (London), the index is published twice yearly in March and September, guiding policymakers, investors, and professionals across the global financial community.
New Zealand’s tax system treats trusts according to the residence of the settlor. Under section CW 54 of the Income Tax Act 2007, resident trustees can access an exemption for foreign-sourced income if they meet the criteria in section HC 26. Following the 2016 Government Inquiry into Foreign Trust Disclosure Rules, New Zealand introduced stricter requirements—formal registration, greater disclosure, and broader access for authorities such as the Department of Internal Affairs and the New Zealand Police. These changes aimed to safeguard New Zealand’s reputation while tightening oversight of foreign trusts.
When applying for a residence permit in Madagascar, avoid shortcuts that could cost you time and money. Always start with official government sources for accurate forms and requirements. If you need assistance, hire a licensed immigration lawyer rather than unregulated agents, and always verify their credentials. Above all, be completely truthful in your application. Disclosing everything—good and bad—gives your lawyer the chance to prepare a strong case, while dishonesty can derail the entire process.
Madagascar’s banking sector is small but highly concentrated. Of the 13 commercial banks, 11 are subsidiaries of foreign institutions, with four banks accounting for 86% of loans as of January 2025. Key players include AccessBanque, Bank of Africa Madagascar, BMOI, BNI Madagascar, MCB Madagascar, and Société Générale Madagasikara. Many maintain correspondent relationships with U.S. banks like Citibank and the Bank of New York, making international transactions more accessible.
In Madagascar, the Caisse Nationale de Prévoyance Sociale (CNaPS) oversees social security contributions for both private and public sector employees. Contributions are based on a percentage of gross salary, shared by employer and employee, and subject to a monthly ceiling. These funds support four key areas: family benefits, pensions, occupational risks, and health insurance.
Madagascar does not use a progressive income tax system like many Western countries. Instead, it relies on withholding and presumptive taxes. Employees are taxed through IRSA (withholding on salaries), while self-employed individuals and small businesses often fall under a presumptive regime. Investment income is subject to flat withholding rates—10% on dividends and 15% on interest. Capital gains on real estate and other assets are taxable, and rental income must be declared separately. All rules are defined in Madagascar’s General Tax Code (CGI).
Episode Description:VAT—known locally as Taxe sur la Valeur Ajoutée (TVA)—is one of the most important indirect taxes in Madagascar. In this episode, we break down how VAT works, who needs to register, and what businesses need to know to stay compliant.What You’ll Learn in This Episode:💡 Standard VAT Rate & PrinciplesRate: 20% on most goods and services.Scope: Applies to supplies of goods and services made in Madagascar, as well as imports.Calculation: Based on the value of goods/services, including all costs and taxes—but excluding VAT itself.📝 VAT Registration & ComplianceMandatory Registration Thresholds:Sale of goods: Annual turnover ≥ MGA 100,000,000.Provision of services: Annual turnover ≥ MGA 50,000,000.Optional Registration: Businesses under the threshold may register voluntarily, often to reclaim input VAT on expenses.🎯 Why This Matters:Understanding VAT is crucial for businesses operating in Madagascar. Knowing when registration is required, and how VAT applies to transactions, ensures compliance while helping companies avoid penalties and take advantage of input tax recovery where applicable.
Understanding Madagascar’s corporate tax framework is essential for both local entrepreneurs and international investors. In this episode, we break down the corporate income tax (CIT) rules, the synthetic tax regime (IS), and how compliance works in practice—so you can plan, operate, and grow with clarity.What You’ll Learn in This Episode:💼 General Corporate Income Tax (CIT)Standard Rate: 20% of net profits for companies with turnover ≥ 200M MGA.Scope: Resident companies taxed on worldwide income; non-residents taxed on Madagascar-sourced income only.Capital Gains: Taxed at the standard 20% CIT rate.Filing Deadlines: Tax returns due by the 15th day of the fourth month after year-end (e.g., May 15 for calendar-year companies).📊 Synthetic Tax Regime (Impôt Synthétique – IS)Who It Applies To: Mandatory for companies with turnover < 200M MGA (with option to use standard CIT).Rate: 5% of annual turnover.Reduction: A 2% reduction is available for purchases of goods/equipment, though liability cannot drop below 3% of turnover.Why This Matters:Whether you’re running a small startup or a large enterprise, knowing which regime applies—and how to file correctly—helps you avoid costly mistakes, benefit from available reductions, and stay on the right side of Madagascar’s tax authorities.
Operating a Société Anonyme (SA) in Madagascar comes with a comprehensive compliance framework. In this episode, we break down the legal, financial, and administrative obligations that SA companies must meet—covering audits, tax reporting, and governance requirements—to help business owners stay compliant and avoid costly penalties.What You’ll Learn in This Episode:📊 Audit and Financial ReportingMandatory Audit: Appointment of an approved independent auditor for annual statutory audits.Financial Reporting Standards: Use of the national accounting framework (PCG 2005) aligned with IFRS 2004.Dual Reporting: Some companies maintain both PCG-compliant and full IFRS statements for local and international needs.Language Requirement: All company accounts must be maintained in French.💰 Tax ComplianceCorporate Income Tax (CIT): 20% on net profits for SA companies with annual turnover over 200M MGA.Minimum Tax: 0.5% of annual turnover plus a fixed amount for certain activities.Tax Filing Deadlines: May 15 for calendar-year companies; fourth month after fiscal year-end for others.Other Taxes: VAT at 20% and potential withholding taxes on payments to non-residents.📑 Administrative and Legal RequirementsLocal Representation: Appointment of a resident representative to receive official documents.Statutory Documents: Articles of Association, tax identification number (NIF), and registration with the Trade and Companies Registry (RCS).Staff Registration: Employees must be registered with social and health security systems; notify the Labor Inspectorate at the start of operations.Ongoing Reporting: Strong governance and transparency are expected, especially for publicly traded companies.Why Listen:If you’re managing or planning to establish an SA in Madagascar, this episode provides a clear roadmap of compliance requirements—from audits and taxes to legal and administrative obligations—ensuring your company operates smoothly and legally in the local context.
Choosing the right business structure in Madagascar can make a huge difference for growth, liability, and compliance. In this episode, we compare SARL (Limited Liability Company) and SA (Public Limited Company), breaking down their key differences, advantages, and when each is most suitable.What You’ll Learn in This Episode:📌 SARL (Société à Responsabilité Limitée – Limited Liability Company)Popular for small and medium-sized businesses.Requires 1+ shareholder and 1 director, maximum 100 partners; open to any nationality.Liability limited to capital contributions; personal assets protected.No minimum capital required.Managed by a director, with strategic decisions made by partners.Statutory auditor required if thresholds are met (capital ≥ 20M MGA, turnover ≥ 200M MGA, workforce > 50).📌 SA (Société Anonyme – Public Limited Company)Designed for larger businesses or those seeking significant capital from multiple investors.Requires 1+ shareholder and 1 director; no maximum limit.Liability limited to capital contributions.Minimum share capital: 10M MGA (2M MGA for single shareholder).Managed by a general administrator or a board of directors.Statutory auditor mandatory; accounts maintained in French; structured for potential public offerings.Why Listen:If you’re planning to start or expand a business in Madagascar, this episode helps you understand which legal structure aligns with your goals, resources, and long-term growth strategy.