AMERICA: FOREIGN CAPITAL COMMERCIALIZATION HAVEN + WEALTH AMPLIFIER

 

Historically, politicians, athletes, movie stars, emperors, political parties, government employees, and wealthy families, deposited their funds in offshore banks in a hope that bank secrecy laws would protect their anonymity and wealth. It is estimated about $21 trillion is languishing in offshore bank accounts. The world’s political, economic and financial climates changed dramatically within the last decade. New and creative approaches to individuals’ and corporations’ wealth protection and expansion have recently emerged.

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The stashed funds produce nothing and may be even forever lost because (1) the ruling regime party’s assets could not be retrieved from bank accounts’ holders after the party’s political demise in view of lack of legal assignment of ownership rights to these assets; or (2) the account holders may die, become mentally disabled, be intimidated or an intermediary corporation may be dissolved, so that the asset owner’s family could be barred from accessing the account assets; or (3) private savings may be shaved by forced levies on bank deposits caused by offshore country/bank instability similar to Cyprus troubled banks’ bailout situations. To prevent assets’ losses, let the owners and their heirs use the assets in perpetuity as they deem fit, and alleviate concerns of confiscatory taxes/ levies, one may commercialize such assets in America and take advantage of her tax benefits, advanced banking and business infrastructure, independent judicial system, political stability, asset security and favorable investment environment.

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America is the world’s biggest tax haven for foreigners as her tax reductions and exemptions are designed to attract foreign investors. Foreigners’ bank deposits are protected by the FDIC insurance up to a set limit. Many non-resident aliens (foreigners who are neither citizens nor residents of the United States, called herein “NRA”), international companies, Caribbean banks and trusts invested trillions of dollars in US financial institutions. Besides tax treaties benefiting U.S. companies doing business abroad, there are generally no U.S. taxes for NRAs on (1) capital gain, except NRA’s real property qualifying as a capital asset held for at least one year; (2) U.S. financial institution (banks, credit unions, brokerage houses, savings/loan associations) deposit interest and portfolio interest; and (3) foreign corporations / source dividends. NRA’s active business and personal income earned in the U.S.A. and a foreign company’s income from U.S. conducted trade / business, or gains from U.S. real property interest disposition, during the tax year, are subject to U.S. federal taxes. U.S. corporations’ dividends are subject to withholding tax (30% of distribution’s gross amount), unless income tax Treaty (e.g. for investors residing in UK, Spain, Germany, China, etc.) either reduces or eliminates this tax.

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All 50 states welcome foreign investments and may negotiate state taxes for businesses providing substantial infusions into the state’s economy. Florida, Delaware, South Dakota, Alaska, Nevada, Wyoming, Texas, Colorado, and Utah states have low tax rates or no sales, estate, property, capital gains, personal or business income taxes at all. Some states have no limits on credit card or other corporate interest rates charged by lenders. Although federal corporate income tax rate is 35%, the largest corporations actually pay to the government an effective rate of 12.1 percent (a 2012 report of the Congressional Budget Office), or even less in many instances.

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U.S. multinational companies hamper their business by keeping their foreign sale profits overseas, because the stranded cash could be repatriated to develop their business in the U.S.A., buy back stocks or distribute dividends to their U.S. investors, while federal corporate taxes triggered by repatriation could be minimized by (1) paying taxes only on the difference between the U.S. and offshore country’s tax rates; (2) allocating profits and royalties to subsidiaries in U.S. no-tax or low-tax states; (3) tax credits and net operating losses; (4) buying another U.S. company, which obtains a large loan from the parent-purchaser; and other tax strategies. “Re-shoring” is a new trend for U.S. companies in view of offshore countries’ rising costs of land and labor, local “red tape”, transportation and political infrastructure causing delivery/ production delays, or quality control issues.

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America’s laws may protect foreign asset owners’ public anonymity. For example, the States of Delaware or Wyoming do not require public disclosure of (1) financial information of LLC members and their assets; and (2) identity of the beneficial owner of the LLC membership interests or corporation shares, or trusts’/ companies’ accounts.

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U.S. residency is not required for foreign capital investment. But those willing to purchase a U.S. existing, or start a new, commercial non-passive business for at least $1 million ($500,000 for businesses in high-unemployment or rural areas), create/ preserve 10 or more full-time jobs for U.S. workers within two years, and actively manage business operation, may become U.S. citizens after receipt of "Conditional" Green Card (a permanent residency permit) and five-year term of continuous physical presence in the United States. EB-5 Immigrant Investor program allows foreign investors and their families to access medical care, good schools, as well as work and enjoy social / cultural life in the U.S., and have multi-entry visas.
 

In general, the U.S. government does not formally approve foreign direct investments. The Committee on Foreign Investment in the United States (“CFIUS”) reviews voluntary notices of certain acquisitions to determine their effect on U.S. national security. Decisions to seek CFIUS confidential review/ approval of security sensitive transactions that could result in foreign entity’s control (10%+ of all company shares) of a U.S. business depend on such entities. CFIUS approves most of the noticed transactions. It has requested risk mitigation assurances/ compliance for the submitted-for-review transactions’ allowance or disallowed acquisitions in very few cases.*
 

A solid path for materializing funds idling in the offshore bank accounts is to create American desalination plants, hospitals, power stations, toll highways, transportation, waste-to-energy, and other profit or non-profit companies. A fast-track monetization avenue is to take part in the U.S. nanotechnology (assembling molecules into predetermined apparatuses/ structures) boom, which affects many industries and products with nano-enabled materials like radio or electricity.** U.S. government issued the National Nanotechnology Initiative (“NNI”) to advance through the NNI’s federal agencies “a world-class nanotechnology research and development program leading to new materials, devices, and products”. The NNI encourages attraction of domestic and foreign capital for participation in the nanotech industrial revolution via (1) R&D of new materials and their novel applications in nanoscience, nanoengineering, nanomedicine, environment cleanup, solar-to-electrical energy conversion/storage, etc.; (2) efficient/ fast transfer of developed intellectual property from research labs to industry; and (3) education and training of skilled work force, and constructing new and modernizing existing factories and research facilities.

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Governments use their sovereign wealth funds (proceeds from state property privatizations, official foreign currency transactions, natural resources’ sales, etc.) to hedge national assets against economic risks, generate profits, stabilize fluctuating government revenues, accumulate reserves for future operations, and for political gains. France, China, S. Korea, Singapore, Russia, Brazil and many other countries established their investment corporations / funds, which invest globally and particularly in U.S. enterprises facilitating great returns on investments.

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U.S. business advantages: consumer market of 310 million Americans plus exports to global markets, superb intellectual property protection and enforcement, pro-investment and pro-innovation climate, world-class universities, countrywide intermodal transportation grids, extensive skilled labor force, well-maintained highways, railroads, ports and airports, wide-spread advanced/ applied IT technologies, unrestricted flow of capital, products and services. This results in competitive overall production and distribution costs and excellent risk-adjusted returns on investment in U.S. businesses by foreign investors.

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Political and international banking realities dictate new investment strategies. There is a unique opportunity now to become a part of the U.S. economic and technological revitalization by utilizing the stagnated dollars or euros (legally earned, free and clear of any liens and encumbrances) for American scientific and industrial projects, while benefiting from the invested assets’ tax savings and safety, preserving funds’ ownership and its unrestricted transferability, making money off the new or modernized U.S. company’s business, and gaining the goodwill of the U.S. government.

*For more details, see http://www.treasury.gov/resource-center/faqs/CFIUS/Pages/default.aspx or http://www.paradfirm.com/#!FOREIGN-INVESTMENT-IN-THE-US-PRE-ACQUISITION-STRATEGIES-by-Boris-Parad-Esq/c126r/CB1B058B-D761-4BD1-B7E5-FB652D2EA36E

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**Anti-bacterial wound dressings, dry powder neutralizing gas/ liquid toxins, high efficiency batteries, more potent drugs, military fatigues resisting chemical weapons, medical device coatings, transistors, golf balls adjusting their own trajectory, scratch/ glare resistant coatings for eye glasses/ mirrors/ cameras, water-repellent/ self-cleaning/ anti-fog/ anti-microbial/ electrically conductive films, heat insulators, water filtration, etc. Nano-manufacturing “bottom-up” process (molecular construction of a material/ product) eliminates the waste and disposed leftovers associated with current “top-down” manufacturing methods of using large / bulk materials to initiate products’ creation.