What Is Offshore Banking?

Posted by admin | September 28, 2008 .

You are making use of offshore banking if you are using the services of a bank that is present in a different jurisdiction or country than where you live. Someone will indulge in offshore banking only because it has the promise of giving some tax benefits or at least some kind of added security and confidentiality. This word actually began when the residents of the UK started a habit of opening up an account in the banks located in the Isles of the British Channel, which is literally offshore. The term “offshore” stuck! Due to the enormous tax advantages they provided, these islands shortly became major banking centers for the global population.

Countries that are chosen as offshore banking destinations have less rules and regulations because of freer government policies. You can open more kinds of offshore banking accounts and manipulate them in various ways. Offshore bank accounts the world over transact two trillion dollars every day. We have come a long way from days of yore when the few offshore banking options that existed were thought to be a way to cover for illegal money or to bring in drug money.

Banking

Every service that is provided in a local bank is also obtained from all the offshore banks. It allows for both kinds of account, checking or savings, either in a personal or corporate format. You can also make use of the host of other features they provide such as ATM cards, debit cards, credit cards (all internationally accepted) and avail of loans and mortgages and money transfers. One ruse here is to opt for numbered accounts instead of named ones – these ensure better confidentiality.

Some offshore bank accounts will provide features for custody and wealth management. Trustee services, corporate administration services, FOREX and fund management are some of the other features these banks may have. Different kinds of banks – commercial and personal – have a different set of features. With commercial banking, you stand to get more features than with private banking. Personal banking, while expensive, provides a set of personalized features that clients can use.

The best advantage of offshore banking is that your information is totally private; offshore banks are not obliged to release your personal or business details to anyone. But if it is proven beyond doubt that you were associated with some criminal activity, information can be passed on by the offshore bank to the government or tax department of your country. It is not possible for them to reach at your offshore banking account in any way – through a suit or through seizure – until the time they find out about it.

Places where your offshore bank accounts are held are not called tax havens for nothing. One of the best benefits of an overseas account is the immense tax benefits you get. However, when you are retrieving these moneys into your country, there may be taxes applicable. Another important advantage of offshore benefit is the ability to protect your assets. When you hold offshore accounts, you will find that there are much less chances of becoming a victim of invasive bureaucracy, seizure of your assets and even some lawsuits.

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