Taxing Times For Tax Havens

In the wake of the economic crisis gripping much of the world today, the activities of the tax havens have come into focus, much to their discomfiture, for their contributory role in the present crisis.   What is a tax haven? A tax haven may be an independent country, or a dependency, or an overseas territory of another country, or a principality. The general term applied to this geographical entity is “jurisdiction”. It is a place where there are either no taxes, like Municipal Tax, Wealth Tax, Sales Tax, VAT, etc, or the rates of these taxes are so low, as to attract people, especially non-residents from other countries, to take advantage of these laws, at the cost of their home country.  

For example, say, an American national working for an oil company in the Middle East repatriates his earnings to the U.S., and is liable to pay a certain amount of tax on it. However, by parking these funds in Switzerland, he does not pay any tax at all. Hence the gentleman may be tempted to open a numbered account in a Swiss Bank, and transfer his earnings to that Bank. In the process, the U.S. Government loses taxes on these funds, apart from the fact, that these funds might have, otherwise, been invested in the United States, and generally speaking, benefited America.  

This is but one example of a tax haven in operation.      

Tax Havens employ certain strategies and tactics in the form of laws, to carry on their activities, without hindrance. One of the features of a tax haven is their refusal to disclose financial information relating to accounts maintained with their Banks to foreign tax and other authorities. This presents the home country authorities, problems in tracking illegal transfers of money, tax avoidance, stashing of ill-gotten wealth, and such other offences by their citizens. The tax havens actively discourage sharing of information relating to financial transactions of their overseas clients, through administrative practices and legislation that is aimed at protecting the privacy of such clients, at the cost of their clients’ home countries.  

Yet another feature of tax havens is the lack of transparency in the legal and administrative processes, that makes it difficult for countries with a proper tax framework, to deal with such jurisdictions. These countries find themselves at a disadvantage, vis a vis, the tax havens, on account of the obvious differences in approach to the issue of taxes on the one hand, and the concept of accountability and transparency on the other.  

Tax havens, typically, do not engage in due diligence of their foreign clients, in respect of their identities, source of funds, etc, before establishing a relationship with them. Further, they do not require overseas companies to have a local presence or to have local introductions. Practically, everything is “arranged” for a price.  

Often, tax havens advertise themselves as such, through the media. One can come across advertisements of tax havens, in financial journals in different countries. It is not uncommon to encounter an advertisement of a tax haven in a particular edition of a journal, carrying critiques of tax havens!  

Future of Tax Havens: It is difficult to predict the future of tax havens at this time. Definitely, they are under pressure to “reform”. The present economic crisis has led to several countries, notably the United States, to come out strongly against these jurisdictions, and acting to discourage their activities.

It remains to be seen, what eventually happens to the tax havens, given the fact, that these jurisdictions provide an important “service” to the rich and the powerful throughout the world. 

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The Truth About These 7 Real Estate Investing Myths

Many people believe that the secret to successful real estate investing is to time the market – buying at the bottom of the cycle. Other people believe that you have to buy properties that cash flow – and that is the most important thing. While people that believe these things may not necessarily be wrong, they are buying into a real estate myth more than a reality.

If you want to make money in real estate, you have to separate the myth from fact. To help you, here are seven of the most common myths dissected:

Myth 1: You don’t need money to invest in real estate

Reality: You DO need money to invest in real estate, but it doesn’t have to be your money. At the end of the day, every real estate deal requires some cash. Even if you do a no money down deal that does not require a cent for a down payment you will still need cash for things like appraisals, inspections and lawyers.

And, almost every property needs a bit of love when you buy it. Even a simple coat of paint requires some cash. So, you don’t need your own money to buy property, but you WILL need money.

This does not mean someone without a penny to their name can’t buy property – but it does mean that person will have to do some networking to find a few sources of funding.

Myth 2: You need a corporation to buy property without risk

Reality: Every situation is different, so you should always get professional advice to determine what is best for you. In most cases, however, a corporation is not necessary at the start. In fact, if you wish to get conventional financing from a bank, you will not be able to buy property in a corporation without personally guaranteeing it. There are exceptions, but even business owners that buy it for their business (example, a Dr. buying a property for his business), will usually be required to personally guarantee the mortgage on their property.

Eventually incorporating may be beneficial for tax or liability reasons, but when you are just starting out, a corporation is just another hurdle that will slow you down to the point of stopping. When you are first starting out don’t worry about complicated and costly things like corporations, just find a good property and buy it. You can always restructure how you hold your properties later on.

Myth 3: Cashflow is the most important thing

Reality: Cashflow is important, but setting your real estate investing goals and then finding properties that help you achieve your goals is the most important thing.

Focusing purely on the numbers can result in buying problem properties that do not attract tenants easily, do not appreciate, and require a lot of work. You always have to consider what you want to achieve, what your exit strategy is and whether the property will deliver on your expectations.

It is more important to figure out what you want, and then find a property that works for you, then it is to find a property that makes plenty of positive cashflow every month.

Myth 4: Buy the Ugly House on a Good Street

Reality: Sometimes the seller of that ugly house thinks their house is worth more than it is just because the comparable properties around it are of higher value. You also might find yourself with a money pit.

If you have a good contractor, you have the money, and you know you can make the ugly house pretty then there often is tremendous opportunity in finding the ugliest house on a good street. But if you are buying the ugly house on the street, just expecting it to be worth more later because it is surrounded by good houses, remember it is still the ugly house.

And, ugly houses do not attract good tenants, even if they are in good locations. If you are not planning to fix it up, you will have a hard time getting and keeping good quality tenants in that property.

Myth 5: All real estate is a good investment

Reality: Over the long term, properties purchased in good locations will usually be good investments. We rarely hear long time investors say “I never should have bought that place” but we often hear them say “I never should have sold that place” or “I wish I had bought that when I had the chance”.

Over the years, real estate has gone up in value nearly everywhere. However, if you buy in an area that is in decline or dependent on one industry that is struggling (timber, fishing, etc,) you are taking the risk. It is possible for areas to decline and never improve.

You can make poor investment decisions in real estate just like you can with stocks. Not all real estate is a good investment, just like not every blue chip company stock is a good investment.

Myth 6: You need to time the market

Reality: Unless you have a crystal ball, you will never know what is going to happen in the market. The reality is that you just have to find a good deal. You don’t have to wait for the right time. In fact, waiting is the worst thing you can do in real estate. The sooner you buy, the better for your wealth growth. Just make sure you buy a good deal.

Your best bet is to focus on your objectives and find a good area with good prospects for the future, and buy there. If you hold onto it for 5 or more years, you will be able to weather any downward turns the market takes, and as long as someone else is paying down your mortgage and it costs you nothing, or very little, to hold each month, you don’t have to time the market.

Myth 7: Real Estate Investing is Easy

Real estate investing is simple, but it is not easy. It takes work. It takes effort to find good properties. Once you own the property, it becomes pretty easy over time.

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How to Learn Internet Marketing: What Are the Secrets to Success in Internet Marketing?

Overview: There are still a lot of people who are only beginning to learn how to do internet marketing but are genuinely interested in how it works. Here are a few tips that are great for getting your internet marketing campaign started.

What are the secrets to success in internet marketing?

When we are aiming towards success in internet marketing, we should have a clear understanding of its structure and how it differs from traditional marketing.

There are many companies that have been shifting their marketing budget over the web. It is because marketing online allows marketers to target specific audiences, more so than any other comparable traditional marketing method.

Here are some secrets of internet marketing that you ought to know:

  • Listings of Website Directory

Before you start with any of your internet marketing campaigns, be sure to add the websites of the companies you are promoting in common online directories. These directories include DMOZ, Yahoo, and Google.

  • Generate traffic

You need to generate traffic to your market page in order to realize a return on your investment. To generate traffic, you can utilize search engines by doing Search Engine Optimization or SEO. You can also do affiliate marketing for your websites.

  • Make a marketing page

When doing internet marketing for businesses, it is essential to have a page dedicated to your online marketing campaign in the company website. Through this marketing page, you can try feature your different marketing strategies.

  • Testimonials

The most powerful way to sell your products or services is through customer testimonials. The good feedback coming from them is a great way to establish trust between you and your prospective customers.

You can get testimonials from your customers is by creating a call-to-action. This can take a variety of forms and can even be a simple request for a testimonial on your website. A great way to get your customers to respond to the call-to-action is by offering a freebie in return.

  • Establish trust

Make sure that your website or company develops a reputable image. This can be established with a few simple rules:

  1. Make good on your promises.
  2. Keep your customers informed and updated.
  3. Respond to queries promptly.
  4. In terms of requesting personal information, clearly state that you will not share any personal information that they give you.

  • Offer warranty

It is one way of ensuring the consumer that you believe in your own products and services. You can offer a money back guarantee or an exchange system for any defects. This tells the customers that you give value to their satisfaction.


Internet marketing is an avenue for marketing that more and more marketers are taking advantage of. In fact, in today’s day and age, an internet marketing campaign is vital for any business whether to complement their traditional marketing or as their principal means of reaching out to their clients.

Aside from the fact that it is more cost effective and will surely minimize the marketing expense of companies, it also establishes a more personal relationship between companies and their customers. It creates a dialogue as well as interaction as opposed to the one-way sharing of information that is offered in traditional advertising.

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Student Loans 101

In our increasing competitive and global economy the need for a higher education is more prominent now than ever before. Even the most basic of jobs now requires some type of college degree. Unfortunately, for many the cost of a degree is beyond their financial means. A state University nowadays averages almost $13,000 per year, with most degree seekers requiring at least 4 years of study before obtaining their degree. Without outside aid of some sort the prospect of getting a degree, and the job that goes with it, would be far above the means of many of us. However, there is hope in the form of Student Loans that are part of the Federal Financial Aid program.

Student loans come in three primary forms: Federal Perkins Loans, Federal Stafford Loans and Federal Parent Loans for Students (PLUS). Your financial need and other criteria determine which of these loans you will qualify for. In addition, there are also so-called Private Education Loans that are offered by numerous banks and other financial organizations that are not part of the financial aid process.

The most selective type of loan that is distributed by higher education institutions is the Federal Perkins Loans. This type of loan is awarded based solely on the basis of financial need and is a low-interest loan that is fixed for the entire life of the loan. The loan has a maximum duration of 10 years and as long as the student is in school they will pay no interest on the loan. Each college or University only has a select amount of money set aside for these types of loans and as a result they are handed out very selectively after other sources of financial aid have been exhausted. The minimum loan amount is $4,000 with a maximum of $20,000 per year for undergraduates. The loans themselves are serviced directly by the Federal Government.

Federal Stafford Loans are the most common type of loans awarded to students and come in two varieties, subsidized and unsubsidized. Subsidized loans are awarded on the basis of financial need and are tiered, with the maximum amount increasing depending on what year in school the student is currently in. As long as the student is in school, or in a deferment period, the Federal Government pays the interest on the subsidized loan. These loans are services by participating banks and other financial institutions, guaranteed by the government. Interest rates on these loans are determined by T-Bill rates and are set once a year before disbursement for the upcoming school year begins.

Unsubsidized Stafford Loans are not a need-based award. The borrower is directly responsible for the interest on the loan beginning with the first date of disbursement. Other than the interest rate, the same rules and limits that apply to subsidized loans apply to unsubsidized loans.

Frequently parents are expected to contribute some amount towards a child’s higher education depending on their financial situation. However, recognizing that many families simply cannot afford to make such payments there is a third type of loan that is geared specifically towards parent’s and helping them pay for their portion – the Federal Parent Loans for Students (PLUS). A PLUS loan will cover the entire portion of the parent’s expected contribution and is guaranteed by the Federal Government, but is issued by participating financial agencies. With this type of loan there is no income or asset requirements making it accessible to even those families with modest means. The interest rate is generally lower than most standard loan types (around 6%) and there are a number of repayment options available, including plans for those with limited incomes and a deferred payment plan while the child is still in school.

The bright future that a higher education can bring can sometimes seem a distant hope for many. However, with the variety of student loan programs available out there today even the most modest of families can help their child get the education they need to get ahead in today’s world.

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