Key requirements to open an offshore account

Offshore banking has been the subject of scrutiny for years. Though it has been linked to various reports of tax evasion, offshore banking is NOT illegal. It simply means banking outside a depositor’s country of residence. It provides advantages to investors especially in the aspect of taxation. Offshore banking is preferred by many businessmen who frequently travel abroad and have to constantly deal with varying exchange rates. Opening an account in a country with lower tax rates maximizes a depositor’s income.

Offshore banking services are offered by virtually all global banks. Since offshore banking requires depositors to declare their assets in their home country, it is advisable to consult a tax adviser about applicable tax and legal rules. Expats find this bank service particularly convenient. They are able to manage multiple accounts with the same institution that has presence in different countries. They are offered a choice of currencies to maximize their savings and investments. Moreover, expats are provided with foreign exchange solutions and tax efficient ways of managing their money.

Some of the most popular offshore banking destinations are the Bahamas, the Cayman Islands, Bermuda and Switzerland, which are considered as low-tax jurisdictions. Moreover, these countries impose strict privacy laws that many high-net worth depositors find beneficial. Offshore finance boosted a number of developing-world economies. It helped many countries in the Caribbean source investments and create domestic growth. According to experts, 26% of the world’s wealth is held in offshore accounts – 35% of which is managed by Swiss banks.

The popularity of offshore banking, partly because of the media hype on the so-called “tax havens”, pushed banks to aggressively market their services. In Bermuda, opening a bank account may be done through mail with proper identification. Those planning of maintaining bank deposits in the Cayman Islands may consult financial advisers via the internet.

Offshore banking may be classified into two types – retail and commercial banking and private banking.

Retail and Commercial Banks

• Average minimum deposit of at least US$10,000 is primarily required
• Applicable for trading businesses and small scale savings

With the use of the internet, standard services are managed through modern banking systems and transactions 24/7.

Private Banking

• Average minimum deposit of US$100,000
• Involves large savings and high-level investments
• Recommended for high-net worth depositors

Offshore banks offer a wide range of services including the following:

• Bank deposits
• Foreign exchange
• Credit
• Investment management and custody
• Trustee services
• Corporate administration

Opening an Offshore Bank Account

Uprooting yourself from one country to another is a significant decision for expats, as there are a lot to take into account. One major factor you can keep in mind when moving is what to do with your finances. You’ll need to pick between a bank located in your home country, or the more convenient option of opening an offshore bank account abroad. Selecting a bank is not an easy decision to make, so if you’re in the midst of moving overseas, here are some factors that you can keep in mind when selecting an offshore bank account.

The level of banking secrecy. Things to Consider before Opening an Offshore Bank Account Naturally, you would want to have your money placed in a reputable, reliable bank. While it is preferable that you open an offshore bank account in the country you will be relocating to, many expats prefer to have their offshore accounts located elsewhere for personal and private reasons. Some countries specialize in offshore bank accounts, and are more reputable for keeping their clients financial state in strict confidence. If you’re someone who places a high value on privacy, consider looking into offshore banks located in Switzerland or Dubai as they are well-known for their secrecy when it comes to international banking.

The amount of taxes and fees included. Things to Consider before Opening an Offshore Bank Account When you have an offshore bank account, you’ll be charged additional taxes and fees in order to maintain your account. The amount of taxes and fees depends on the amount of assets that you own, the bank balance and the country that you choose to open your offshore account in. Since most offshore bank account transactions are done through the internet, you can simply ask your chosen bank or your financial adviser about these fees to get a better picture of how much it will all cost.

Things to Consider before Opening an Offshore Bank Account As seen in this article, there are many factors to consider when searching for the right offshore bank account. Depending on your situation, you may want to take some time off your moving schedule to do some research on the different offshore banks that are available around the world today. By doing some additional research, you’ll be able to find the right offshore bank account that can handle your money best and give you the security you need for your finances.