That some of the world's largest enterprise wealth management said the prospect of implementing Washington Account Tax Compliance Act of Foreign Affairs, which aims to prevent tax evasion by Americans with offshore accounts. HSBC (HBC), Deutsche Bank (DB), Bank of Singapore, DBS Group Company (DBS) all said they turn away business from clients in the United States. The attitude of American regulators "cruel," said Tan Su Shan, head of private banking in Singapore-based DBS, the largest lender in Southeast Asia. "I did not open a U.S. account, period."
Act 2010, which gradually began January 1, 2013, the average additional cost of compliance for banks and fewer investment options for U.S. citizens living abroad. Known as Fatca, require financial institutions based outside the U.S. to obtain and report information about the payment of income and interest added to the account of American clients. Internal Revenue Service held a hearing on May 15 guidelines and may change some aspects of the law.
Jim Spellman / WireImage / Getty ImagesNo a U.S. citizen, the tax bill could save Saverin Facebook
Penalties for non-compliance difficult. Non-US. companies that do not carry the required disclosure will be subject to deduction of 30 percent of certain dividends, interest, or the proceeds from the sale of assets that they or their customers receive from U.S. sources, according to Richard Weisman, head of law firm based in Hong Kong Baker & McKenzie international tax practice. "Very much, financial institutions outside the U.S. does not want it, for obvious reasons," said Weisman, tax cuts call "stick" to the U.S. holds. "The U.S. outsourcing tax compliance function, which is very expensive."
The U.S. government should be tougher on crime than the offshore tax, said U.S. Representative Richard Neal, a Massachusetts Democrat and one of the sponsors of the legislation. He Fatca, introduced after Zurich-based UBS (UBS) in 2009 was aided by the U.S. tax fraud and agreed to pay $ 780 million to avoid prosecution in the U.S., helping to improve the transparency of the banking system, he said. "The IRS should know what the money is being held offshore, and for what purpose," said Neal. "I do not think there's anything unreasonable about that." UBS clients have not taken U.S. companies offshore wealth management unit since 2008.
Denied Bank of Singapore, the private banking arm of Oversea-Chinese Banking Corp., to receive millions of dollars from the United States because it will not appear intrusive regulation, according to Chief Executive Officer Renato de Guzman. "It's too complicated, too difficult," he said. "You may need to have a dedicated team to handle or understand what to do or what not to do."
Some U.S. citizens to avoid the new tax reporting concerns and may save money by releasing their nationality. A record of 1780 gave them a U.S. passport last year, compared with 235 in 2008, according to the IRS. One is Eduardo Saverin, the billionaire founder of Facebook. This step can reduce the tax bill as Facebook completing an initial public offering that values ​​the social network at more than $ 100 billion. Saverin Brazilian-Born is a resident of Singapore.
If Americans choose to bank with non-US companies such as HSBC, investment options are limited. HSBC bank branches in Asia regional headquarters in Hong Kong, America could make savings. HSBC decided in July that it would no longer offer wealth management services to the United States from a location outside the home country tax authorities then stepped up their investigation into a London-based client that U.S. banks. Americans are "better breakfast" by private bankers in the U.S., Goh Kong Aik, a company spokesman in Singapore, said in an e-mail.
Says Royal Bank of Canada (RY) saw an opportunity to take customers away by other banks. "We are one of the few wealth managers to hold the U.S. Securities and Exchange Commission to offer-compliant licenses for investment advice in Switzerland and London," said Barend Janssens, Singapore-based head of the Bank's wealth management unit for emerging markets. Bank saw "the opportunity to receive the tax man followed us as clients outside of the U.S."
The growth of wealth in Asia make it easier for banks to deny Americans. Asia is the fastest growing number of people in the world with more than $ 1 million in investable assets, according to a report last year by Bank of America and Capgemini, a management consultant. The number of millionaires in Asia rose 9.7 percent in 2010, to 3.3 million, higher than the 8.6 percent growth in North America. The combined wealth of millionaires in Asia rose to $ 10800000000000, topping Europe for the first time, the report said. Industry conferences he attended in Singapore, do not accept clients in the United States is "somewhat feeling there," said de Guzman Bank of Singapore. "We have enough business in Asia, so we want to make our lives very difficult."
The bottom line: To prevent an increase in the cost of reporting and the potential penalties, many foreign banks to limit their dealings with U.S. clients.
