Wary Swiss Banks Shun Yanks

http://online.wsj.com/article/SB10000872396390444592704578062570295543436.html

by benpbenp • 14 years ago

2 1 14 years ago

online.wsj.com

1. This is happening all over the world, not just Switzerland. Because of FATCA as well as the IRS's enforcement activities over the last few years, U.S. persons are seen as risky and expensive customers. It's more profitable and less risky to send U.S. customers away than it is to make the IRS happy.

2. It's worse for entrepreneurs. I am now seeing my U.S. clients lose business opportunities outside the USA. Would-be foreign partners are increasingly deciding that having an American in the company (as an owner and increasingly frequently as a mere employee) exposes the whole venture to too much U.S. government risk:

- The U.S. person will likely report on his/her/its ownership portion of the joint venture. Typically this is Form 5471 for a corporation, for instance. This causes financial data about the company to bleed over to the U.S. government from abroad.

- The U.S. person will likely have to disclose company bank accounts on Form TD F 90-22.1; this includes how much money is in the account as well as full bank details.

The privacy leaks are unacceptable to non-Americans. Why should their business affairs be disclosed to the USA, when the business never touches the United States? The easy solution is to reject the U.S. person who wants to be in business with them. Which they do.

3. The consequence: I am seeing (and helping) an increasing number of entrepreneurs acquire a second citizenship then terminate their U.S. citizenship. I'm afraid that I am seeing the beginning (for the USA) of what people say about Detroit: "The people with get-up-and-go got up and went."

(Disclosure: I am an international tax lawyer and I do this stuff in my day job.)

(Personal opinion: All of that pessimism aside, let me just say that I experience frequent moments of gratitude when traveling abroad that I have the U.S. passport. Yes, it is a Very Big World with Many Fabulous Places to Live. But there are also some places where I am glad I can leave.)

Wary Swiss Banks Shun Yanks

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