by Mike Vogel
The IRS now requires financial institutions to report interest paid to non-resident alien (NRA) depositors. Many international banks operating in Florida had opposed the regulation, arguing that their clients would withdraw their money if the governments in their home countries were informed of where they had deposited their money. Florida Trend asked international bankers how the new regulation will affect international banking in Florida.
“Most of our depositors are from countries that don’t have tax treaties with the U.S. They are aware it can change any time. The more sophisticated, affluent depositor is beginning to look at other options. The problem with these kinds of initiatives and measures is the movement of funds will be silent and over time. (It’s) a wealth channel that was a very prominent source of funding for domestic development.”