Seminar to Tout Appeal of Offshore Banking : Finance: Author downplays the practice’s unsavory connotations, emphasizing its tax, privacy and investment advantages. He hosts a talk this weekend in Newport Beach.

With higher taxes almost surely on the way, the rich may want to take an investment tip from dictators, drug traffickers and shady stockbrokers: Bank offshore.

That’s the advice of author Hoyt L. Barber, who is hosting a “Tax Havens ‘93” seminar this weekend in Newport Beach. Attendees will receive advice on how they can take advantage of banking in places like the Cayman Islands and Aruba.

Barber said he expects about 50 participants at $495 apiece--and isn’t much concerned about their backgrounds. The audience, he said, could include everyone from potential money launderers to government agents, a couple of whom have already inquired about the conference. “I would guess there will be a good cross-section there,” Barber said.

Wealthy individuals can reduce their taxes, ensure their privacy and take advantage of investment opportunities that elude most Americans by letting their money vacation in the Caribbean, even if they don’t go there themselves, Barber maintains.

The 37-year-old “entrepreneur, investor, financier and consultant” from Reno, Nev., asserts that offshore banking is a legitimate investment option for individuals earning $100,000 or more a year. Tales of offshore banking’s seamy side have been overplayed, Barber insists.

“It has a negative connotation because of the drug business. It’s deserved to some extent, but it’s only a portion of the business, like you have in any industry or city. You have a certain element that is criminal,” said Barber, who has penned a book on offshore investing.

For legitimate investors, offshore banking is more promising than at any time in recent memory, Barber said, because of President Clinton’s proposed tax increases for the wealthy. “We are definitely on a new course that is anti-capitalism and anti-conservatism,” he said. “It means you are going to have to share more of your money (with the government) and get less in return.”

In addition, Barber said, some offshore banks in tax-haven countries, notably Germany and Switzerland, are far sounder than banks in the scandal-ridden U.S. financial industry. And offshore banking, he said, still offers almost complete privacy at a time when databases are increasingly laying bare the financial records of most Americans.

The Internal Revenue Service, however, notes that offshore banking is not necessarily a tax-free paradise.

“It’s highly complex, and it’s not something that someone should enter into lightly or on the advice of a single seminar,” said Judith Golden, spokeswoman for the IRS office in Laguna Niguel, which covers much of Southern California. “We recommend that before anyone gets into something highly complex that they get the advice of an attorney or an accountant.”

Trying to hide money offshore to avoid income taxes is against the law. While certain earned income--meaning wages--is eligible for foreign tax credits, investment income is fully taxable.

“People have to be careful not to get involved with something that is not appropriate,” Golden said. “People have to look at the total picture and what it means not only to their taxes but to their total financial picture.”

Offshore banking appeals mostly to the wealthy. Although doing business overseas offers privacy advantages, setting up a foreign corporation can be expensive.

But there are few better ways to keep one’s finances secret than establishing an offshore account, said Dennis J. Sutton, a former offshore bank official who is now a consultant to a law firm in Nassau, Bahamas. That nation is among the most popular tax havens because there are no income, inheritance or other such taxes. Because the Bahamian government has no need to keep track of bank deposits and investments, Sutton said, there are no mechanisms for reporting details of financial activity.

“Secrecy is near total here in the Bahamas,” said Sutton, who is scheduled to speak at Barber’s seminar, which begins Saturday at Le Meridien Hotel. “The only time that lid blows is if the money is in connection with narcotics.”

Nowadays, most of the “loose change” ending up in Bahamas-based banks is from Far East nations like Taiwan, Singapore and South Korea. Deposits from the United States and Japan are down because of the recession, Sutton said. Most Hong Kong families have already shipped most of the wealth out of that country in anticipation of the 1997 reunification with China, he added.

Besides privacy, offshore banks hold the lure of better investment returns. Sunnyvale consultant Arnold L. Cornez, another seminar speaker, said that rich people can put substantial portions of their nest eggs into accounts in a conservative offshore bank and receive higher interest rates than at U.S. banks. In doing so, they can also make themselves less of a litigation or creditor target at home because they do not appear to have as much money.

“The image of offshore banking has received a bum rap,” Cornez said.