Offshore banks and companies in Anguilla are not subject to U.S. capital gains taxes on their publicly traded Wall Street type stock, bond, and commodity trades. Today, nearby tax havens offshore in Anguilla and The Bahamas rival the industrial cities including London , Tokyo and New York for business. The pint-sized Cayman Islands now boast more commercial banks (600+) in the commercial registrar than in all California . The dollars on deposit in these Cayman banks exceeds $800 billion, which is also more than all the commercial banks in California . The Bahamas , just 50 miles off the coast of Florida , was once the third largest financial center in the world next to New York and London . Today, the Bahamas ranks in the top ten as a financial center, just behind the Cayman Islands . There are more than 390 banks and trust companies registered here in Nassau.

The Bahamas, the Cayman Islands, Turks & Caicos Islands, Anguilla and Bermuda have no personal income taxes: no corporate income taxes, no capitol gains taxes, no withholding taxes, no estate, gift or inheritance taxes, no sales taxes, no employment taxes, no death duties, and no probate fees. These governments for periods up to 50 years provide guarantees against future taxes. Exempt trusts can receive guarantee up to 100 years.

Unfortunately, the American taxpayer cannot qualify very easily for the aforementioned tax exemptions allowed nonresidents; unless, he can avoid both the Controlled Foreign Corporation provisions enacted during the Kennedy Administration and the Passive Foreign Investment Company provisions enacted in 1986. Most tax attorneys and big 8 accounting firms will probably tell you that this is not possible. This is not to imply that U.S. taxpayers don't attempt to secure the above tax exemption afforded foreigners anyway. They do.

The bottom line is, while the foreign investor can get a complete tax exemption from U.S. capital gains taxes from the U.S. government on its publicly traded stock, bond and commodity transactions, the U.S. person operating in an almost identical manner is taking on risk.