Family Money: Offishore Havens

By Leslie Wright

For most people, the word "offshore" simply refers to a collection of safe havens where money could be placed for greater security. In fact, it means any place which is not onshore - the country in which you are either domiciled or resident.

Indeed, the words "domiciled", "resident", "not-ordinarily-resident" and "non-resident" cause considerable confusion, but are simply legal terms used to decide your status with regard to taxation.

Domicile goes with you

Domicile is as much a state of mind as a legal definition. You can, effectively, choose your domicile - the place you call "home".

Although you cannot be without a domicile, you can only have one domicile at any one time.

You are domiciled in the country of which you are a citizen, either by birthright or adoption; or of a country in which you have chosen to live permanently or indefinitely; or of the person on whom you are legally dependent.

These are called, distinctly, domicile of origin; domicile of choice; and domicile of dependency.

However, you are a resident (for tax purposes) of the country you have chosen to live in, even though you may not be a citizen or have permanent residency status in that country.

For instance, someone born in Britain may be a citizen of that country by birthright, even though his or her parents were not holders of British passports. Conversely, someone with British parents may be a British citizen even though he or she may never have set foot inside the U.K.

This latter person may also hold dual nationality, inasmuch as well as being able to claim the nationality of his/her parents, he or she may also claim to be a citizen of the country in which he or she was born if his/her parents were resident overseas at the time.

Domicile is distinct from citizenship. Someone having been born and raised in UK may have British citizenship, but may not reside there except for occasional visits.

And provided these visits do not exceed 182 days in any one financial year (April 6th to April 5th), or an average of 90 days a year over four financial years, and no income is generated inside the UK during these visits, this person may be classified as "non resident" and his/her overseas income will be outside the UK tax net.

However, such income will be taxable in the country of which he/she is resident for tax purposes.

The term "not ordinarily resident" generally applies to citizens of one country who are living and either working for an extended period or gaining income in another (for example UK), and thus are liable to tax in that second country (e.g., UK).

To help clarify these complexities, take as an example someone who was born in Britain but who has chosen to live permanently in Thailand.

This person will still be a British citizen (if he or she has not relinquished his passport), but is classified by the UK IRD as "non-resident" for tax purposes, and "resident" for tax purposes by the Thai authorities.

If this person has married locally, set up home here, opened local bank accounts and perhaps even established a local business, this all indicates the intention in his mind of remaining permanently offshore from the UK, and effectively to have changed his domicile from UK to Thailand.

He will be liable to tax in Thailand on income derived here, but may be free of tax liabilities in UK - unless he has holdings there which produce an income which is taxable (for example, a house which is rented out.)

The offshore concept

For most people, however, the word "offshore" has expanded into a much broader concept.

It is now used for a collage of philosophies about investing, wealth management, and lifestyle. It describes a self-directed mentality and independent approach to living, in which a person is neither stifled by government, nor reliant on it.

In the extreme, it describes a state of living in anonymity and drifting around the globe without ties or allegiance to any particular nation. However, it is important not to become seduced by abstract offshore theory and ideology at the expense of overlooking the hard practice.

The basis of offshore freedom is simple economics.

Where there’s brass

There is no point in going into convoluted intellectual exercises about offshore possibilities and trust establishment if you have no assets.

Accumulation and investment of wealth offshore, where it is more secure and better able to work for the individual, should always remain the focus.

Many regimes around the world have set themselves up as "offshore financial centres", to cater to the ever-increasing number of people who have chosen an expatriate lifestyle.

Some of these places are strictly regulated and well established, and are able to offer a high degree of professional and administrative competence accompanied by excellent communications facilities, political stability, and of course confidentiality and investment security provided by well-enforced legislation.

The most strictly regulated and hence prestigious amongst these are the three islands of Guernsey, Jersey and the Isle of Man off the coast of Britain.

All three have stable independent governments, are strictly regulated by their own Financial Services Commissions, and have a very high degree of investor-protection legislation in place to guarantee investors’ assets should the investment institution fold up.

These rules and regulations are in some respects even stricter than those which apply onshore in the U.K., which themselves are regarded as amongst the strictest in the world. They certainly provide investors with a much higher degree of security than is found in regimes with less strict laws and regulations.

Other places such as Bermuda, the Cayman Islands, Bahamas, British Virgin Islands, Turks & Caicos Islands, Cyprus & Mauritius (all ex-British colonies, you may have noticed) have also developed as offshore financial centres - although these have not gained quite the same international acceptance and recognition that the three offshore British islands enjoy.

In recent years, some less noteworthy places have also touted themselves as offshore financial centres, but being less well regulated, tend to attract firms and individuals who are unable to obtain licences to operate in the more well-established (and hence more stringently demanding) locales - and in certain unfortunate instances, those who have been banned from operating in more highly-regulated regimes, often as a result of having been caught in a variety of nefarious or at least dubious activities.

For expatriates of many nationalities, investing "offshore" is relatively easy and perfectly legal. For others it can be complicated or even impossible, due to restrictions or regulations in their own country.

A perfect example of how regulations that were meant to protect citizens and safeguard their interests can restrict their freedom of choice as regards international investments are those which apply to US citizens.

But more about that next week.

If you have any comments or queries on this article, or about other topics concerning investment matters, write to Leslie Wright, c/o Family Money, Pattaya Mail, or fax him directly on (038) 232522 or e-mail him at [email protected]. Further details and back articles can be accessed on his firm’s website on www.westminsterthailand.com.

Leslie Wright is Managing Director of Westminster Portfolio Services (Thailand) Ltd., a firm of independent financial advisors providing advice to expatriate residents of the Eastern Seaboard on personal financial planning and international investments.

The computer doctor

by Richard Bunch

From Sonja Mulligan, Pattaya: Help! I’m at my wits end. You may wonder why. Well, for the past ten years I have been writing a book, it seems like a lifetimes work. Anyway, I was doing a final edit of it and am due to present it to the publishers at the end of April. The problem is my son has deleted this and a lot of other files from my hard disk. Although I have a backup copy it is very out of date and would take me months to get it to the same completeness as the deleted one. It’s not in the Recycle Bin and I don’t know where to go or what to do. Is there any chance that I will see it again?

Computer Doctor Replies: The simple answer is yes and no. The reason being that the chances of recovery depend on what has been done on the PC since. When files are deleted, the space they take is flagged as available, thus your file or part of it may have been overwritten. Whenever something like this happens, if at all possible, the PC should not be used so as to preserve the status quo. The more the PC is used the less chance there is of a successful recovery. There are a number of so called utilities on the market which are supposed to either prevent disaster in the first place or recover from it. Some are better than others, while some do more harm than good. I strongly recommend you do not attempt home recovery but get expert help. If you contact me I can give you the relevant details and costs.

From Patrick Lee, Vietnam: I have a question regarding OCR. I have a scanner which seems to be working OK, but when I use Omni Page to scan documents for OCR the text and background are reversed, so I get white text on a black background. I cannot see a setting to alter this in Omni Page. What should I do.

Computer Doctor Replies: This is almost certainly down to the settings of your scanner. The way scanners are configured varies from manufacturer to manufacturer and model to model but look for the main scan window. Check it is set to Line Art, and around 250dpi and that no filters etc. are selected to invert the image. It is also best to take off any Auto setting feature. With any luck, that should solve your problem.

Well, Microsoft released Internet Explorer 5 on the 18th March 99 as planned. Now that the initial euphoria has died down, it should be possible to download this upgrade without any real problems. Depending on the options you select, it will take you around 3 hours. Having installed it in the office, there doesn’t appear to be any major changes over the last Beta release, but certainly the bugs that I was aware of have been eliminated and it does seem to work quicker.

Please let me have your questions, I’ll try to help.

The comments contained within this column are not necessarily the views of the author or Pattaya Mail Publishing Co., Ltd. Letters may be edited.

Send your questions or comments to the Pattaya Mail at 370/7-8 Pattaya Second Road, Pattaya City, 20260 or Fax to 038 427 596 or E-mail to [email protected].

Richard Bunch is Managing Director of Action Computer Technologies, providing total Information Technology solutions to clients on the Eastern Seaboard.

Successfully Yours: Dieter Floeth

by Mirin MacCarthy

Dieter Floeth could be either a fisherman turned restaurateur or a restaurateur (out / gone / going / escaped ) fishing. In his case it is most likely to be the latter. However, Dieter, tall, happy and expansive, can be found playing mine host most nights behind the bar at his Deutsches Haus restaurant, Soi 4 Pattaya. You can immediately recognize him by his white fishing hat, which, it is reported, he wears 24 hours a day.

Dieter has two restaurants, one here and one in Map Ta Put and a 65 foot charter game fishing boat, "The Seeadler" which is German for "Sea Eagle". His restaurant in Map Ta Put, although named "Old Germany", serves international food and business lunches and dinners. Whereas Deutsches Haus, whose walls are studded with rods and reels and barracuda, sailfish and grouper trophies, offers hearty German homestyle meals in a warm Germanic atmosphere with music by "Ronnie" in the background. One word of warning though, if you are chatting with him, stay away from the schnapps, it is impossible to walk after several of them.

Dieter has been in Thailand for twenty-five years. He married a beautiful Thai lady, Pat, and has been running Deutsches Haus for twenty of those years. He met Pat at an embassy function in Bangkok where she was the translator. Thailand is home for Dieter and this is where he plans to stay. In fact he says, "It is Thailand I am homesick for whenever I go back to Germany."

Born and schooled in Bochum, Germany, Dieter joined the German air force at age 18, teaching math’s and physics and he was the youngest lieutenant and captain they ever had. At twenty-nine he had the urge to travel and took a job at the International School in Bangkok.

He was there for just over a year before he and three teacher friends opened a German restaurant, Haus Munchen, which they ran for two years. Dieter laughs, "It was more of a drinking experience for us and a complete disaster for myself. A little bit horrible experience, especially with the Thai staff before I could adjust to their ways."

In ’76 he decided to escape to Pattaya. "It was beautiful here then. There was no pollution. I remember my wife and I played in the water in the mornings between 6 and 8, it was just so clear."

About the same time as he opened the restaurant, "For another challenge," Dieter started fishing. "We hired boats and got a lot of fish. We caught 200 a day back then. Two years later I charged 400 Baht for fishing trips, which was 50 DM, today I still stick to the 50 DM, that’s 1000 Baht now."

Ten years ago he bought the "Sea Eagle" from an American, it was just a steel hull and worth about 200,000 Baht then. Today it is said to be worth several times that. Dieter has it fitted out with two decks, cabins, a galley, fishing chairs and game fishing rigs, even fridge’s, international telephone and video. A day’s fishing trip starts with breakfast at the restaurant, fishing all day interspersed with lunch and a swim in a secluded bay and a fish dinner back at the restaurant. He even has videos of his fishing trips playing in Deutches Haus for everyone to enviously watch them reeling them in.

When he is not fishing or driving between his two restaurants Dieter loves playing golf. "I’m an average golfer. My handicap is 18, though I don’t have much time for that lately as I’m busy building my house at Green Valley Golf Club. I have to be the carpenter, plumber, electrician, everything."

His plans for the future are to find managers for both his restaurants so he can spend more time golfing and fishing.

And what does he consider to be success? "Having at least one Baht more than I need and an easy life with not too much work." Dieter, the restaurateur cum fisherman, has certainly got his boat headed in the right direction.

Snap Shots: The black and white minstrel show!

by Harry Flashman

Black and white photographs were once all you could get. The photographic world had not learned how to do colour processing or make colour film. If you wanted colour it was hand done with paints and inks and I’m sure all of you have a photo of your grandmother tucked away in an old album somewhere done in this way.

With the advent of colour film and rapid cheap photo processing the world forgot about black and white - other than pro shooters who knew that black and white prints have something colour does not have. That something is dramatic impact. Those "knock ‘em dead" landscapes by Ansell Adams would be nothing in colour. It is the sharpness of the contrasting blacks and whites that give his shots that ‘presence’. The black and white nudes done by Man Ray in the 1920’s are in a similar genre. In colour they would just be interesting shots of a young lady. In black and white they are stark, dramatic, thought provoking and mysterious images.

B&W has not died with Ansell Adams and Man Ray, however. The clever people in the film laboratories have come out with film that can be processed in your standard One Hour film processor, in colour film chemicals, yet the end result is black and white prints.

Kodak and Ilford have one of these C41 friendly black and white films on offer. Both are fairly high speed films with 400 ASA rating, so they can be used for a good range of subjects and lighting too. A little more expensive than the usual colour print varieties but not over the top.

So how do you use these films in your camera? Same way as your standard film, it is that easy. Just remember to reset your camera’s ASA rating to 400 if you have not got automatic DX coding.

However, there are some differences when you use black and white film. When you look through the viewfinder you must imagine that everything you see is a shade of grey. The usual sharp contrasts made by colour alone will not necessarily be so contrasted in black and white. Separating foreground from background by colour will not work at all.

All of a sudden, you have to acquire the photographer’s eye. You are now looking for size, shape and shadow. These are the elements you must use to pull the subject out of the picture. A girl in a blue dress in front of a red door is no longer a great image in black and white - somehow a girl in the grey dress in front of a grey door does not have the same impact. Does it now?

So now, look again and make your subject the largest item in the picture. It may mean you have to walk several yards closer - but make the subject stand out with size first.

Now look at the shape. Can you contrast a smooth subject with a rough background? Every little bit helps with black and white.

Next look at where the shadows lie. Remember that shadow is the item to give your subject form. No shadow, no form. Shadow also comes out very black in black and white prints so can give plenty of contrast to lift the subject off the photographic print. Again, this may mean you have to alter your position when taking the shot so that there is discernible shadow to be seen.

Now shoot film, take it to your favourite photo processor, wait one hour and be prepared to marvel at your skills as a black and white photographer! Best of luck!

Modern Medicine: Self prescribing - is it safe?

by Dr Iain Corness

Most of the expat community in Pattaya have grown up in countries with very strict prescribing legislation that applies to the medical profession. Those laws are very rigidly applied, and there are also regulations to prevent the dispensing of drugs at the pharmacy without prescription.

As with many things in Thailand, there is not the restrictive legislation, so self medication and self prescribing is very commonplace. There are those who will say that this is a good thing. "Everyone knows to take some penicillin, and you’ll get better." Indeed, in many cases, you will get better - but there are also some "hidden costs" to the community and personal dangers that should be realised.

Prescribing antibiotics is actually not a simple procedure. Did you know there are over 150 antibiotics in common use, for example? If one group were all that was required, just why do we have all the others?

Before you tell someone to pop over to your local pharmacy and buy another box of "Wondercurecillin" next time they are ill, think about the following: the most important "patient factor" is allergy to any proposed drug. Penicillin allergy can kill. Are you prepared for that?

Another point to ponder is the production of antibiotic resistance in the community. This often occurs through indiscriminate use of broad spectrum antibiotics. The western world is worried about the over-prescription of antibiotics in teaching hospitals producing resistance problems. What happens in a society where anyone can use antibiotics, whether they are appropriate or not? Is this the reason it has become difficult to shift bronchitis in Pattaya, no matter what antibiotic you take?

Another factor that a doctor has to take into consideration is whether the infection is caused by one microbe, or by many. A single antibiotic may be quite ineffective against the total onslaught of many microbes and again promote resistance in the other microbes.

Knowledge of the excretion of the different antibiotics is also very important. If you want to get an antibiotic into the kidney, for example, then your doctor would choose one that is concentrated and excreted through the kidneys. Do you know which ones do this?

Inappropriate prescribing can also occur through the specific inability of the body in some disease processes to eliminate an antibiotic drug. The build up in some instances can reach toxic levels. Another case where an antibiotic that "works" on the disease can actually kill the patient. The treatment was successful, but the patient died!

It takes many years to become a doctor and even more years to become experienced in the prescription of antibiotics. If it were so easy, my professors would not have spent so much of their time and my time to teach me how to prescribe. Think about it next time you are tempted to self prescribe. It really is safer to be guided by your doctor.

Dear Hillary,

I am a single American male who has lived in Pattaya for 8 years.. I’ve had a few relationships but now I am madly in love with a beautiful woman. The problem is she has a relationship with 2 children.

Last month I invited she and her family to a party. Her husband did not come as their youngest child was ill and he had to work the next day.

This woman stayed after everyone had gone. She gave me the impression that she wanted to have a relationship with me. Even though I am in love with her, I resisted because I had a bad feeling about it. I explained my feelings to her and she left my house.

After she left, and even now, I regret I did not follow my feelings. What should I do?

In Love

Dear in love,

I believe you acted correctly.

If you cannot handle unpredictable circumstances, better look for someone who has no family obligations and is free.

Maybe this woman is your ideal, but she is taken. Don’t get your hopes wrapped up in illusions. You deserve better than spending all public holidays and vacations alone, crying while your loved one is probably having a ball with someone else. Listen to your head, not to your heart unless, of course, the person is going through divorce proceeding.

Be careful: There is the possibility to end up as the object of a short term romance, as a lover for a few months (or even a few years). Is this what you want? You deserve someone who’s mind and heart is 100% free for you.

You are looking for a honest, loving relationship, and that means not getting involved with someone else’s partner. You cannot change people’s behaviour patterns.

Don’t put yourself through the pain of trying.

Dear Hillary,

After very hard work in Europe, I came to stay for a few months with my parents in Thailand. Recently I went to a business party. We came a little bit later than the other guests and I met this handsome, single man. We were chatting for about ten minutes and unfortunately, he had to leave. He gave me his business card and wrote his home number on it. He told me that he would like me to call at my convenience. Now I am not sure if I dare to do so. After all, I talked to him only for a few minutes. Do you think I could try?

Afraid of Calling.

Dear Afraid,

This man is single. This man is handsome. This considerate man is a rare jewel. There is no time to play hard to get. Call him.

GRAPEVINE

Animal Crackers: Fishy History

by Mirin MacCarthy

Koi Carp have been around for 2 1/2 thousand years. They are all descendants of the common black carp, called the Magoi. Originating in Eastern Asia and China they were introduced to Japan by the invading Chinese in 200 AD. Around the seventeenth century the Japanese rice farmers put carp in their rice irrigation fields and began breeding them as a food supplement for their snow bound winters. Fortunately they did not eat them all! The first colours were probably produced by accident, but since then selective breeding has resulted in the many colours and varieties popular today.

Small Carp or Big Goldfish?

The Japanese still lead the world in producing the best quality koi. (Nishikigoi as the fancy varieties of carp are known.) These beautiful fish have become extremely popular throughout the world with their spectacular colours and patterns making them prized additions to many garden ponds, be they Eastern or Western. Good Japanese koi are hugely expensive, though those from other breeding countries, including Thailand, are improving constantly and can present excellent value.

Garden fun

Part of the fun of koi-keeping is landscaping and water gardening. Pottering around in the water is fascinating enough on its own for many a hobbyist, but with perseverance these graceful fish can become quite tame, eventually even feeding from your hand, more than doubling your fun.

Good fortune goldies

According to Asian and Chinese mythology ornamental fish are the symbol of prosperity and harmony. This is why an aquarium of gold fish is often seen beside a cash register in oriental restaurants. An odd number of fish reputedly keeps away the evil spirits and carp represent long life and perseverance.

Koi keeping

Careful planning is required as it is not a simple matter of throwing a couple of fish into a small garden pond and finding a school of them three months later. The best advice for would be koi keepers is to research the subject, then get advice on pond building and filtration, shading the koi pond, and checking your budget.

If you can maintain a swimming pool then koi-keeping may not be a daunting prospect. Water quality is vitally important and much consideration must be given to water pH and hardness, nitrogen cycles, ammonia, nitrates, chlorine, temperature, oxygenation by fountains or waterfalls, and mechanical and biological filtration as well as regular maintenance. Not just a simple fish bowl full of water.

The solution

Find a sympathetic and experienced gardener who will be happy to do all the hard work and leave the enjoyment to you.

Auto Mania: A pug in every garage?

By Dr. Iain Corness

Peugeot are not lying down to quietly die or be swallowed up by FoMoCo (like Volvo did after falling on their Swedish sword). In fact, the froggies are coming out fighting for their new cause and ambition - world domination! Now I’m not sure that this is what you would call an "attainable goal", and by crikey it’s a big ask!

Peugeot say this can be done through their association with the Prost F1 Team. The General Manager of Peugeot’s Motor Car division, Frederic Saint-Geours has said that his company wants to double it’s sales outside Europe within the next five years. He went on to say that the company feels this will be best achieved using the power of F1’s global attraction.

Saint-Geours went on to say that this is something Peugeot and Prost have in common. He confirmed that the association with Prost will be long term and that the French racing team will be given "all the necessary resources available" (read: Money, buckets of) to enable them to achieve their ambitions.

Returning to the subject of world domination, Saint-Geours added, "Our involvement in Formula 1 racing is a natural part of our global strategy, as Formula 1 reaches new markets, such as China."

So there you go, Peugeot hope to be in front by a nose! If Alain Prost pulls this one off they’ll make him President for sure! In the meantime, General Motors continues to build the new plant at the Eastern Seaboard Industrial Estate to build Zafiras?

Actually, the new Pug’s are quite a nice bit of gear. The one we took around Bira was most impressive in the suspension department. One gets too used to Japanese sloppy softness, sorry about that Mr. Toyota.

Autotrivia Quiz

Last week we looked at the NSX, a sports car of which legends will be written, mark my words. Top speed of the road going version was 165 MPH, which is the answer to last week’s question. For a street registered vehicle that’s quite some top speed. Unfortunately, in most countries it isn’t possible to do these speeds without incurring the long arm of the law. In America and Oz there is even the famous "Pigs in the Sky" patrol who clock you from planes and helicopters. There’s just no way you can speed and get away with it any more. (No wonder I left!)

I realise there are still lots of people in the world who will mumble "Speed Kills". It doesn’t. It’s the sudden stop that does it. In trained hands, in the right place, you can do 200 MPH with safety. But that’s the rub - "trained" hands. If you drive faster than your capabilities, then you are "at risk", no sweat. Think about doing a course in driver training.

A couple of weeks back I mentioned the Berkeley range of cars and Craig Blackie from Projects Asia in Bangers has contacted the Editorial Office with the following fax: "I was indeed the proud owner of a Berkeley T60 (the nasty little 328 cc three wheeled version - my quote). It was a sort of love/hate relationship over 3 years from 1968 -70, it being off the road as much as on. The unusual thing about it was the front wheel drive, with a motorcycle gate shift gearbox, 3 forward and one reverse. Top whack was about 65 MPH with a tail wind. It was quite treacherous in snow as the back wheel slid from side to side between the ruts. Another problem was people signaling you to overtake and then accelerating rapidly when they spotted the 3rd wheel!" Thanks very much for that information, Craig, and next time you are down in Pattaya I’ll buy you a beer for that fun piece of info.

This week’s question comes from Terry Hawkins, an enthusiast of American Iron. He popped up with this one and I must admit it had me stumped. See how you go - the first correct answer into the Editorial Office wins the legendary Automania FREE beer. Fax 427 596 or email [email protected]. OK, the question - which American car had a central headlight that swiveled with the direction of the front wheels?

Bits about Bira

A bunch of auto enthusiasts came up with me to the Bira Circuit last week for the first race meeting of the year. A little on the "low key" side, as most first meetings are in the season. However, the new Toyota Team Thailand Corolla was very well turned out and driven to a maiden victory by the works driver Natavud.

The next meeting at Bira is on the 12th - 14th April, during the Songkran Pattaya Festival, and is the South East Asian Zone Touring Cars meeting. This will be a "full on" race meeting and I will give you some more details on this next week. The dates as given to me correspond to a Monday-Tuesday-Wednesday which could present a little bit of a problem for some people, but I’ll check.

While I remember, spotted two very delectable cars in the paddock at Bira. A black Porsche Carrera and a black Mercedes SLK Kompressor. Whilst I remain a total Porsche enthusiast, that little Benz is a very attractive motor car. If anyone knows the owner - give me a call please!

Now let’s look at the world championship in F1 - the Malaysian Grand Prix Sepang race meeting has to be a red hot venue for us all. Let’s schedule it to coincide with visa runs or whatever. The date is the 17th of October so mark it in your diary now. If we can get enough people together we can get discounted seats and even discounted hotels, etc., if we are lucky. I also have a couple of motor racing contact friends in Malaysia we could use to secure seats, etc. It has to be the best way we will get to see F1 in this neck of the woods. Drop me a fax if you are interested, I’d like to get some idea of the numbers before I contact the folks down in Malaysia.

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