Offshore financial centers offer the advantages of tax minimization, asset protection, and estate planning. As long as differences exist in either the types of taxes, or the rates charged, taxpayers will constantly seek to carry out their activities in jurisdictions, which impose the least tax burden.

If your accounts are resident in an offshore financial center such as the Bahamas, the tax on your investment earnings is zero. The result of properly structuring your affairs offshore is illustrated by the following example:

If you have $50,000 invested in your high tax country of residence and your investment is earning 15% per year (you wish). And, if you're in a 50% income tax bracket, then over then next 25 years, your $50,000 compounded annually will grow to $304,917. Your net rate of return is only 7.5%.

However, if you invest the same $50,000 offshore at a 15% rate of return and a 0% tax rate it will be worth $1,645,948 at the end of 25 years. That's 540% more money. The onshore tax bill will cost you $1,341,031 at the same rate of return! I say, avoid the million-dollar tax bill and go offshore!