When someone uses a bank that lies in a different country or in a different jurisdiction than their own area of residence, then it is known as offshore banking. This method is chosen to benefit from some form of tax exemption or to maintain security in foreseen cases where the possibilities of future legal proceeding may arise. These places were considered to be tax havens and were really offshore from the UK. Since these spots were located offshore, the term offshore banking refers to the act of opening account outside the original boundaries of jurisdiction. Tax benefits and lax regulations made the islands international favorites as banking destinations.
You will find that offshore banking is liberally regulated because of the less restricting nature of their government policies. Offshore banking accounts are of many kinds, and there are many ways in which they can be controlled. Such banking moves about ,000,000,000 each day around the globe. Until a few years ago, offshore banking was thought to be only for crooks and smugglers to hide their illegal accounts.
Offshore banks also provide the whole gamut of services that a local bank will provide. Both savings and checking accounts can be operated with a personal or corporate account. 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. Using just numbers instead of names, you can get better anonymity from these accounts.
Other features that some of these offshore banks provide include investment management and custody. You can also get services like trustee services, corporate administration services, foreign exchange and fund management. But you need to check – since these banks can be either commercial or private banks, all these features may not be present with all banks. Commercial banks provide more standard services and are more economical than personal banks. But for that, the client will have to pay more.
Confidentiality is certainly the best advantage because offshore banks are not bound to reveal their clients’ personal or corporate information. 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. So if they don’t know about any involvement, or cannot prove it, then they cannot appropriate anything from you.
Places where your offshore bank accounts are held are not called tax havens for nothing. Getting relief on tax is an important advantage of having an overseas account. But the savings cannot be termed as total because when you are bringing the money into your country, you may be liable to several forms of taxation. You also protect your assets better when you are banking offshore. 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.
Author: thulasThis author has published 21 articles so far.