Why to open an offshore bank account?
What is Offshore Banking?
Offshore banking rules are simple as ABC. If you live in country A, your company is incorporated in country B, you should bank in country C.
Offshore banking, otherwise known as private banking, is the process of setting up your banking in a different country to your or your company’s base.
The term was originally coined to describe banks on the British Channel Islands, which were set up as tax havens in order to attract investment. These days, everything is different. It is not only small, remote islands that offer these services; mainland countries such as Switzerland, Lichtenstein and the Emirates now provide offshore services to clients around the world.
While each country has their own regulatory demands, the ultimate goal is the same: to allow safe, secure banking and protection of the financial assets in a tax-free environment.
GUIDE TO OFFSHORE BANKING
Learn the basics about offshore banking before you make a move.
What are the benefits
Security of the assets and high level of privacy. But that’s not all.
Offshore jurisdictions typically offer low, or 0% tax rates. At the very least, accounts are interest free. In addition, you have the option of storing multiple currencies within your account.
By spreading in this way, you safeguard your funds to an extent against unforeseen fluctuations in one currency. Storing your money in an offshore account provides you with a higher level of privacy than keeping funds in your country of origin.
It also protects your income from tax authorities in your home country, as well as providing extra security if your own country has a precarious political situation. Offshore jurisdictions often offer premium services that aren’t available in your country’s banking system.
In addition, using these services can open up diverse, attractive investment opportunities for your company, allowing you to grow your holding at the same time as benefiting from a reduction in banking fees.
- NO TAX ON INTEREST
- And often a 0% tax rate across the board.
- MULTIPLE CURRENCY ACCOUNTS
- Spread to protect against fluctuations.
- HIGH LEVEL OF PRIVACY
- Protection from scrutiny.
- MORE SECURE FUNDS
- Funds are safe in case of political unrest or attempts at seizure in your home country.
- ACCESS TO SERVICES
- Offshore jurisdictions offer premium products and services.
- INVESTMENT OPPORTUNITIES
- Diversify your portfolio through your association with the jurisdiction.
Where to open an offshore account
Emirates, Switzerland or Lichtenstein? There are many places that are considered as safe harbors for your financial assets.
The right bank account is the foundation upon which your wealth will be built.
Founder & CEO
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Offshore banking rules are simple as ABC. If you live in country A, your company is incorporated in country B, you should bank in country C. The right bank account is the foundation upon which your wealth will be built.
Frequently Asked Questions
What is the difference between an onshore and an offshore bank?
Offshore banks are located outside your own country and are within financial jurisdictions that offer VIP private banking services. They are geared towards promoting investment, so there are often excellent investment opportunities attached to offshore banking. Offshore banks typically like to see a maintained, growing balance, so they are not well-suited to smaller businesses with low volume, as a pattern of deposit followed by immediate withdrawal will flag up on their anti-money laundering protocols. For this reason, smaller businesses often elect to split their funds between offshore and onshore services.
Can I open an offshore account in my own country?
No. Offshore accounts can only be opened in a different country to the location of your business. Accounts in the same country are onshore accounts and are subject to regular taxation.
What currencies can I manage my account in?
Many offshore banks offer a multi-currency service, allowing you to spread your funds and protect against any major fluctuations as well as avoiding currency exchange fees. Other banks may stipulate certain currencies, such as USD or EUR. In this situation, you would need to pen two accounts to manage both currencies.
What is the level of privacy?
Offshore banks have specific legislations to preserve anonymity for its clients, but international information exchange treaties mean that there is no such thing as 100% secrecy.
What types of account are there?
There are a range of accounts to suit individual business needs. Alpha Citizen can provide consultation to help you choose the most favourable for your company. Fixed and variable rate accounts are available, along with credit and debit card accounts if you require them. There are a large number of different accounts available and they are specifically designed to suit.
What are the main methods of deposit?
You can make a deposit into your offshore account using cash, a cheque or SWIFT.
What are the main methods of withdrawal?
Withdrawals can be made via SWIFT, with your visa or Travelcash card, or, in some circumstances, by cheque.
Are there any risks?
Offshore banks carry out their own due diligence, and it is mostly centred around protecting against money laundering. You will need to be able to demonstrate the origin of your funds, but the bank keeps this information completely confidential. Offshore accounts provide excellent protection for your funds, as they are protected from creditor seizure.