Napoleon In His Time

In the history of the world there have been great empires that have risen only to fall. Human history is the history of the great empires that have ruled though the ages. It has always been that throughout the history of civilization, man has tried to win land and in their unending quest for land, they have either suffered humiliating defeats and annihilation or have built the greatest empires of their age. In ancient times the Macedonian Empire of Alexander the Great, the Nauryan Empire of Asoka and the Roman Empire all were made by the ruthlessness of man in their quest for power, control, and wealth. By the late 1700’s on to the world’s stage came Napoleon Bonaparte.

” Power is my mistress” the man whose ego collided with destiny. An ego that grew to the size of Mount Everest with each military victory much like that of Alexander the Great before ruled all of Europe for over a decade. In all of history there has always been those who were born destined to reshape the world and leave a lasting legacy. Alexander the Great, Caesar, Charlemagne, and Washington are at the top of the list of individuals who changed the course of history. Napoleon Bonaparte was such an individual. Like Alexander the Great, was one of history’s greatest military generals. He was a risk taking gambler, a workaholic genius but so often a short term planner that at times led to disastrous results. A temperamental tyrant some have called him, but none can doubt his military amplitude and his ability to seize the moment when opportunity came along.

A mathematical prodigy, whose intellect catapulted him into fame and glory for his remarkable military skills at the height of the French Revolution. A renowned reformer but also a ruthless military commander who used the best tactics not only from studying other campaigns from history but utilized his own innovations like the placement of artillery in key locations that proved to be decisive in winning battles. Even today his military tactics are studied at all military schools all over the world. Aside from all his military achievements, like Charlemagne, is remembered for his reforms. The establishment of the Napoleonic Code is the basis that French law is still used today was one of many reforms that Napoleon implemented.

Some historians considered him one of histories enlightened despots but others now consider his accomplishments in a much better light. But, none the less his vision of a unified Europe where France ruled would never become a reality in his own time. The constant rivalries between Europe’s competing powers, such as Great Britain, France, Germany and Russia that would erupt into two world wars a hundred years later always prevented Napoleon’s dream. Eventually after years of conflicts the pursuit of the European Union would emerge. There are some today attribute this to Napoleon’s vision, which included a common infrastructure and a common legal code. Unlike Hitler in the second World War Napoleon and Charlemagne both had a vision of a unified Europe where reforms in place would benefit all.

It was the French Revolution had alienated the government from the Catholic Church. One of Napoleon’s remarkable skills in diplomacy occurred when he negotiated the Concordat of 1801 with the Pope to bring religious and social peace to France. Napoleon appointed several members of the Bonaparte family and close friends of his as monarchs of countries he conquered and as important government figures (his brother Lucien became France’s Minister of Finance). He demanded total loyalty and expected nothing less from those around him. Although their reigns did not survive his downfall, a nephew, Napoleon III, ruled France later in the nineteenth century.

Napoleon was one of the greatest military commanders in history. He has also been portrayed as a power hungry conqueror. Napoleon denied those accusations. He argued that he was building a federation of free peoples in a Europe united under a liberal government. But if this was his goal, he intended to achieve it by taking power in his own hands. However, in the states he created, Napoleon granted constitutions, introduced law codes, abolished feudalism, created efficient governments and fostered education, science, literature and the arts.

When Napoleon became Emperor he again proved to be an excellent civil administrator. One of his greatest achievements was his supervision of the revision and collection of French law into codes. The new law codes, seven in number incorporated some of the freedoms gained by the people of France during the French revolution. These, including religious toleration and the abolition of serfdom. Napoleon also centralized France’s government by appointing prefects to administer regions called departments, into which France was divided.

While Napoleon believed in government “for” the people, he rejected government “by” the people. His France was a police state with a vast network of secret police and spies. The police shut down plays containing any hint of disagreement or criticism of the government. The press was controlled by the state. It was impossible to express an opinion without Napoleon’s approval.

Napoleon’s own opinion of his career is best stated in the following quotation:
“I closed the gulf of anarchy and brought order out of chaos. I rewarded merit regardless of birth or wealth, wherever I found it. I abolished feudalism and restored equality to all regardless of religion and before the law. I fought the decrepit monarchies of the Old Regime because the alternative was the destruction of all this. I purified the Revolution.”

Between 1799 and 1815 the fate of France and Europe was in the hands of Napoleon Bonaparte, the man described by Chateaubriand as the “mightiest breath of life which ever animated human clay’. Napoleon’s ultimate downfall was due to the forces that the Revolution had unleashed and Napoleon accelerated.

Napoleon Bonaparte was born on the island of Corsican who first became an officer of artillery, an unfashionable branch of the army at the time. He did however was able to make the right connections. During the Terror, his friendship with Robespierre’s brother, and his skilful use of artillery at Toulon in September 1793 helped him rise to the rank of brigadier. His cool head during the Vend miaire revolt and his friendship with Barras carried him even further. His marriage to Barras’ ex-mistress, Josephine de Beauharnais in October 1796 put him into the center of fashionable circles. This made it all the more accessible to literally network his way into the French nobility that got him the command of the 30,000 men of the Army of Italy.

Napoleon was very image conscious and had a great flair for publicity much like General Douglas McAuthur did during the Second World War. His published battle reports and his ordres de jour’ attracted popular attention. He once said that “moral force wins more victories than mere numbers.” He also was an excellent actor who could at strategic times appeal to the deepest loyalties’s of his soldiers: “The military are a free masonry and I am their grand master’. “

After the failed Russian invasion the fortunes of Napoleon turned sour. Mainly because of his reluctance to grasp the dimensions of the high casualty rates had on the moral of his army and the French populace growing tired of war which continued to drain the economy. This, while other nations were becoming more fearful of his military threats. Sure, Napoleon was extremely lucky but by 1812 his luck was running out. Due to the inadequacies of his planning in the Russian campaign where over 3/4 of his army perished and the collapse of the treaties that were signed earlier enabled his enemies to regain a counter offensive to once and for all stop Napoleon from achieving complete dominance in all of Europe.

By 1814 after reclaiming power the forces that would ultimately crush Napoleon were already gathering. On the battlefields of Waterloo the great destiny fell. All that Napoleon gained was lost in the heat of the battle of Waterloo. Nowhere in the annals of history has an empire built by one man came crashing down so swiftly and decisively. Who knows what the world would be like today if Napoleon had actually won one of history’s most influential battles.

Even if you think the French leader as more of a despot in the long line of kings in Paris who ruled France, then, who established his family on the seats of European thrones, he actually was different. Even if Bonaparte did not champion all of the ideals of the French revolution. He was still a man of honor. Napoleon was a warrior, but also a man of ideals and law. He believed in the ideals of the French revolution, at least to some degree.

When Napoleon landed on the shores of France after his first exile, the soldiers sent to arrest him openly weep. When Napoleon ripped open his shirt and said either shoot me now or accept me as your general exemplifies the mystic that Napoleon had not only with the military but with most of the French population. This is why many people silently route for him. If Napoleon had defeated Wellington there would have been no world wars in the 20th century. Many historians conclude that fact today. History is what it is though. Napoleon will be forever linked to one of histories greatest military commanders and empire builders.

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How and Why to Open a Bank Account in Hong Kong

Hong Kong today remains one of the best offshore banking jurisdictions. It offers a great combination of bank secrecy, corporate secrecy, a financially and politically stable environment, and strong banks. But perhaps most importantly, it’s a secure offshore investment haven for those who want to diversify out of sinking western currencies into booming Asian markets, and China in particular.

So how can you go about opening an offshore bank account in Hong Kong? Do you have to travel there? This article will answer these questions and give you some practical hints and tips. But first some background.

A Successful Free Market Experiment For East and West Alike

Hong Kong, in my opinion, is the only practical example in the world of a major city that has been developed from scratch and run as something of an offshore, free market experiment – first by the British, then by the Chinese.

The main Island (and later Kowloon and the New Territories, parts of the mainland) was a British colony for most of the nineteenth and twentieth centuries. During this time it grew from a fishing village and opium trading hub, into a city-state of seven million people. It became known as a free-wheeling, free market paradise for capitalists, with an economy characterized by low taxation, free trade and no government interference in business.

In 1997 the British returned sovereignty over Hong Kong to China. The former colony became one of China’s two Special Administrative Regions (SARs), the other being Macau. Many people were initially doubtful about one of the world’s capitalist bastions being run by a communist power, and at the time a lot of investors pulled out, many taking their dynamic business acumen heading to places like Singapore and Vancouver.

However, the “one country, two systems” model adopted by Beijing to coincide with free market reforms and the growth of China into an economic superpower has proven very successful. The Basic Law of Hong Kong, the equivalent of the constitution, stipulates that the SAR maintains a “high degree of autonomy” in all matters except foreign relations and defence. The SAR today operates as a major offshore finance center, discreetly oiling the wheels of commerce between East and West.

These days, rather than being put off by the Chinese influence, most international investors who are attracted to Hong Kong are coming precisely because of this Chinese connection. Hong Kong is the point of access to Chinese trade, without the legal and cultural difficulties of doing business in mainland China.

Those who do not trust their own governments are reassured by the fact that under the Basic Law, Hong Kong’s foreign relations are run from Beijing. While most offshore jurisdictions humbly submit to demands from the USA and other western countries, in the case of China, the relationship is definitely reversed. Hong Kong does have a number of Tax Information Exchange Agreements (see below) but these are sensibly policed and do not allow for fishing expeditions.

Offshore Banking in Hong Kong

The region’s population is 95 percent ethnic Chinese and 5 percent from other groups, but English is very widely spoken and is the main language in businesses like banking.

One thing I like about using Hong Kong for offshore bank accounts is the same argument I have used for Panama and Singapore: it’s a ‘real’ country with real trade going on. The Hong Kong dollar is the ninth most traded currency in the world. Compare this to doing business on a small island or other remote banking jurisdiction, where everybody knows your only reason for doing business there is offshore banking. It also means that there is no problem doing your banking in cash, if you so wish.

For now the HKD, the local dollar, still tracks very closely the US dollar, but this appears to be changing as the Chinese Yuan circulates freely in Hong Kong, both in cash and in bank deposits. We think this represents an excellent opportunity to diversify funds out of the US dollar now, gaining exposure to Chinese growth in the meantime. (Of course, you can also hold HKD in banks in other parts of the world too)

Bank accounts in Hong Kong are almost all multi-currency by default, allowing all major local and international currencies to be held under one account number and exchanged freely and instantly within the account at the click of a mouse.

There is no capital gains tax, no tax on bank interest or stock market investments, and no tax on offshore sourced income. This, combined with a welcoming attitude to non-resident clients in the banks (including US citizens by the way, who are generally unwelcome in traditional offshore banking havens like Switzerland), and strong cultural and legal respect for financial privacy, makes Hong Kong one of Asia’s best offshore banking jurisdictions.

For those who want to establish a small offshore account under reporting limits, or simply to have the bank account established in view of future business, Hong Kong is also attractive given the low minimum deposits demanded by the major banks there. The minimum bank account balance can be as low as HK$ 3,000. Of course, you can’t expect red carpet, VIP private banking at this level – but you get a perfectly good functioning bank account with all the technological trimmings.

Offshore Corporate Bank Accounts in Hong Kong – Do’s and Don’ts

Typically, offshore clients choose to open accounts using corporations, as opposed to personal accounts. This not only offers greater privacy, but also flexibility and can – depending of course on how things are structured – offer significant tax and asset protection advantages.

Accounts can easily be opened both for pure offshore companies like Panama, BVI, Nevis or Marshall Islands, or for local Hong Kong companies that are set up using nominee directors and shareholders.

When contacting local corporate service providers in Hong Kong, you’ll find that most of these corporate service providers will recommend you use a Hong Kong company to open the account. The reason they do this is that it’s simpler and more profitable for them. They can incorporate a local company at low cost, opening the bank account is smoother and faster with a local company, and they can carry on billing nominee director fees every year. But it may not be the right thing for you.

Whilst it is true that Hong Kong companies do not have to pay any tax provided they do not make any local source income, administering such a company is not so simple. For example, Hong Kong companies are required to file audited accounts every year. They must file pages and pages of documents to convince the Inland Revenue Department (HKIRD) that they don’t have any local business, and, from practical experience, the HKIRD is getting much stickier about this. Long-established companies are normally left unmolested but newly established companies can expect a lot of compliance work in their first few years. Again, this suits the Hong Kong corporate service providers who charge handsomely for such services.

Another factor to consider is Controlled Foreign Corporation (CFC) legislation in your home country. (For an explanation see Wikipedia ) Many clients choose to set up LLCs as they can be treated as passthrough entities, vastly simplifying reporting requirements in some countries like the USA. Hong Kong corporations are not LLCs and cannot be treated as passthroughs for tax purposes.

My advice – assuming you don’t intend to do any business in Hong Kong besides banking and perhaps the occasional trip to visit your money – would be to open the account in the name of a company from a foreign offshore tax haven. It’s a little more work and expense at the beginning, and the bank might ask you more questions, but it will save you a lot of money and headaches in the long term. If you want a local look and feel for your company, numerous virtual office services are available.

Hong Kong Tax Information Exchange Agreements

Contrary to what you will read on some out-of-date websites, Hong Kong has signed a number of Tax Information Exchange Agreements (TIEAs). However, the HKIRD is at pains to point out that fishing expeditions are not going to be tolerated.

The HKIRD has issued Practice Note 47, available on the internet, which usefully explains how the HKIRD seek to achieve a balance between the requirements of compliance with the OECD requirements, whilst providing checks and balances to protect the rights of businesspeople.

The HKIRD are professionals and should be well positioned to deal with TIEA requests properly and justly in accordance with the treaties and guidelines. I am confident not going to allow their ‘clients’ rights to be trampled on.

Regulation of Banks in Hong Kong

Hong Kong’s Banking Ordinance was revamped in 1986. It has since undergone several amendments to improve prudential supervision. The Hong Kong Monetary Authority (HKMA) was formed in 1993 as a one-stop financial regulator, responsible for everything from banks to stored value anonymous debit cards.

The SAR maintains a three-tier system of deposit-taking institutions, comprising licensed banks, restricted license banks, and deposit-taking companies. Only licensed banks may operate current and savings accounts, and accept deposits of any size and maturity. RLBs are only allowed to accept deposits of HK$500,000 and above, while DTCs are only permitted to accept deposits of a minimum of HK$100,000 with original maturity of not less than three months.

Both these latter categories provide an opportunity for overseas banks to conduct wholesale, investment or private banking activities in Hong Kong without having to jump through the hoops of applying for a full banking license. In addition, some foreign banks have chosen to open representative offices in Hong Kong, which are not allowed to take deposits but can assist in opening accounts at other offices within their groups.

As Hong Kong is an international financial centre, it is an explicit policy of the HKMA that the regulatory framework in Hong Kong should conform as much as possible with international standards, in particular those recommended by the Basel Committee.

Hong Kong’s five largest banks, in terms of total assets, are as follows:

– Hong Kong & Shanghai Banking Corporation (HSBC)

– Bank of China (Hong Kong)

– Hang Seng Bank Ltd

– Standard Chartered Bank

– Bank of East Asia Ltd.

A full list of updated Hong Kong banks can be found on Wikipedia.

Visiting Hong Kong to Open a Bank Account

If you are visiting Hong Kong to open your account, it can normally be opened the same day provided you have made some arrangements with a local service provider, or directly with the bank, in advance. This is assuming you use one of the major banks, that nearly everybody does. You can then simply visit the bank, sign documents and receive the bank account number immediately. This will be a full multi-currency account and you will typically receive a digital token for internet banking, a password and a debit card.

The documents required for opening offshore bank account are:

1) Formation documents (in the case of corporate accounts. Apostilles are required in the case of foreign corporate accounts – your offshore provider will know how to obtain these.)

2) Bank forms and business plan/expected activity (a corporate service provider will normally supply these as part of the service)

3) Passport copies of each director, signatory and shareholder (take special note of this requirement if you are using nominee directors – if the persons are not present, copies will have to be notarized.)

4) Proof of address (such as updated bill statement which shows up your name and address) and signed (of each director and shareholder)

A bank reference is generally required if you are dealing direct with the bank. If you go through a corporate service provider, they normally write a reference so you do not need to supply a bank reference. However, if you can obtain a bank reference it is better.

Opening an account without visiting Hong Kong

It is also perfectly possible to open accounts without visiting Hong Kong (known as ‘remote account opening’) though this process tends to take substantially longer as banks will ask a lot more questions. In this case, your bank or service provider will generally e-mail you the forms, that you will need to print out and sign.

Depending on the bank, there may well be certain special instructions about how and where to sign – for example, HSBC in Hong Kong will typically request that you have your signature witnessed in the HSBC Bank nearest to you. As with all foreign bank accounts, you should be sure to use the same signature that appears in your passport, otherwise the documents will be rejected.

In the case of remote account opening the bank will normally courier the password, debit card, and token direct to your address in your home country. Then you need to activate them via the bank’s website.

Conclusion

Hong Kong competes very favorably with Singapore, the other Asian banking jurisdiction we favor. If you have not yet diversified your offshore holdings into Asia, you should seriously consider doing so. I hope this article will be helpful in this regard.

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