The global financial system has become truly transparent since 2014. Under the CRS standard, tax authorities in over 120 countries automatically exchange information about their residents’ foreign bank accounts and assets. FATCA, introduced in the United States in 2010, requires foreign banks to share information on the accounts of American taxpayers.
These changes have fundamentally altered the concept of financial privacy. It’s no longer about hiding assets, it’s important to learn how to manage your data legally. According to Andris Kaushelis, General Manager of the international law firm Mirsatori, modern legal mechanisms allow you to build an asset ownership structure that only shares information with government agencies authorized to receive it.
These mechanisms are based on legal tools for international structuring and tax planning, such as choosing a suitable jurisdiction, determining tax residency, participating in second citizenship programs or setting up trust structures. This approach has replaced the old offshore model, ushering in a new era of transparent yet controlled wealth management.
How CRS has changed the financial world
Since 2014, the international system for the automatic exchange of financial data, the Common Reporting Standard (CRS), has been in effect. To date, more than 120 countries have joined. Financial institutions in these countries are required to disclose information about their clients’ financial accounts (balances, accrued interest, dividends, and investment income) to tax authorities.
These institutions include more than just banks, but also insurance, brokerage, and investment companies. First, the data is sent to the tax authorities of the country where the account is opened, and then to the owner’s country of tax residence.
For instance, if a French citizen opens an account in the Cayman Islands, the local tax authorities will inform the French authorities of the account’s existence and any transactions. This deposit must be declared on the tax return, and the income is taxed in accordance with French law.
Similarly, the CRS covers other types of assets, such as company shares, investments, and trusts. The United States has its own system: Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to disclose information about accounts held by US tax residents. However, the United States does not participate in the CRS and does not exchange data on foreign investors.
Overall, these standards have effectively rendered the previous offshore model ineffective, whereby assets could remain undeclared. Today, countries of tax residency receive reliable data on the foreign assets of their citizens.
“In this new environment, the main task for wealthy clients is no longer to conceal information, but to properly structure their international asset ownership. Proper structuring allows them to comply with transparency requirements while controlling the data transfer process, helping to ensure it remains accurate, predictable and compliant with international standards,” says Mirsatori.
Why do old offshore schemes no longer work?
Until 2014, private investors and companies would often open accounts and register businesses in offshore jurisdictions, such as the British Virgin Islands, the Seychelles or Panama. This model ensured a high degree of confidentiality, as international standards for the exchange of financial data did not yet exist and tax authorities in host countries did not have access to information about foreign assets.
However, the introduction of the global Common Reporting Standard (CRS) and other transparency initiatives has made the offshore model irrelevant. Today, virtually all jurisdictions have adopted international financial exchange rules, leading to stricter compliance procedures.
Banks and financial institutions now:
- Conduct enhanced customer identification (KYC), including verification of the origin of funds;
- Assess reputational and sanctions risks;
- Request confirmation of tax residency;
- Monitor transactions to prevent violations of AML regulations.
“Today, opening an anonymous account is impossible—and rightly so. The modern financial system is built on the principle of transparency. Our job as lawyers and consultants is to help our clients build a legal and sustainable structure for owning assets, so as to avoid mistakes and misunderstandings when interacting with banks and tax authorities,” says Andris Kaushelis of Mirsatori, a firm that advises private clients and businesses on tax residency, second citizenship, and wealth management.
Modern instruments are replacing offshore jurisdictions when it comes to structuring capital:
- Managed structures. Wealthy clients use trusts, foundations and family offices, which are transparent instruments for managing assets and inheritance. These structures simplify control, transfer and reporting while operating in strict compliance with the CRS and national law.
- Second citizenship and tax planning. Obtaining a second citizenship offers flexible tax residency options and the ability to choose jurisdictions where the exchange of financial data is regulated by local legislation and international treaties. This is a legitimate tool for global mobility, rather than a way to conceal assets.
- Private banking and data protection. Countries with well-developed private banking systems have strict standards for protecting personal information and banking secrecy. These measures are not intended to bypass reporting requirements, but rather to ensure the accurate and secure exchange of data. It is essential to comply with and be transparent with authorized bodies.
Second citizenship as part of the international financial architecture
Obtaining a second citizenship is not a means of hiding capital, but rather a way of building a stable and legal financial structure.
Investment citizenship programs allow investors to contribute to the host country’s economy, expand their tax planning opportunities and benefit from personal data protection under international treaties.
Caribbean countries such as St. Kitts and Nevis, Grenada, Dominica, St. Lucia and Antigua and Barbuda have been developing investment programs for over 10 years. The minimum investment required is USD 200,000, with processing times of 2–6 months. These countries adhere to the CRS and FATCA standards but implement them through their own national mechanisms, balancing transparency with investor protection.
Turkey offers citizenship to those who purchase real estate starting from USD 400,000. Vanuatu has one of the fastest procedures in the world, with a processing time of approximately 2 months, for investments starting from USD 130,000. Both programs comply with international requirements and provide clients with a high level of legal protection for personal data, as well as clarity on tax matters.
Andris Kaushelis of Mirsatori:
“Modern citizenship programs are not a way to hide from the CRS system, but rather an opportunity to build a flexible, legal asset ownership structure. We help clients choose jurisdictions with balanced compliance and data protection.”
Remember, citizenship is not the same as tax residency. To change tax obligations, one must actually reside in the chosen country for at least 183 days a year or have their core interests there.
With the right international planning structure, an investor can manage assets in different countries while acting legally.
How Mirsatori lawyers build financial transparency and data protection strategies
For international investors, it’s important to consider more than just obtaining citizenship or residency. Building a sustainable tax and financial structure is also crucial. Citizenship determines legal status, while tax residency establishes a genuine connection with the state.
Mirsatori lawyers help align these aspects into a unified strategy that meets international transparency standards while protecting clients’ personal data. Here’s how the process works in actual practice:
- Asset audit. Our specialists conduct a thorough analysis of assets, including bank accounts, companies, investments, and real estate, to determine the optimal ownership structure. If necessary, assets are transferred to trusts or family foundations to simplify management and inheritance while maintaining full compliance with international requirements.
- Tax liability review. Our team analyzes clients’ tax liabilities in various countries and helps them avoid duplicative reporting. Our goal is to build a system where taxation and data disclosure are accurate, transparent, and free of unnecessary risks.
- Jurisdiction and citizenship selection. Our lawyers help clients select a combination of tax residency and citizenship-by-investment (CBI) programs that provide flexibility and legal clarity. For instance, clients can become residents of the UAE or Monaco and obtain a second citizenship through a CBI program, thereby expanding their options for global planning.
- Compliance and dossier preparation. Mirsatori assists clients with interactions involving banks and financial institutions by preparing dossiers that confirm the origin of funds, ownership structure, and tax status. This reduces the risk of misunderstandings and ensures the correct exchange of information under the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA).
“For example, an investor from Europe obtains Vanuatu citizenship and tax residency in the UAE,” says Mirsatori’s general manager, sharing a practical example. “They create a holding company that accumulates assets and invests worldwide. This structure allows for centralized capital management and full compliance with the laws of all jurisdictions involved.”
The main ideas behind Mirsatori are:
- Structure assets transparently and legally;
- Select banks and jurisdictions with reliable data protection;
- Avoid duplicate reporting by adhering to international CRS and FATCA standards;
- Build governance through compliance-oriented structures, such as trusts, funds, and holding companies.
“Financial privacy in 2025 means managed transparency. Clients remain fully within the legal framework but control how, when, and to whom data is disclosed,” concludes Mirsatori.