There are certain things you should know before opening an offshore bank account – things that can save you a lot of time and frustration. The following 7 facts about, taiwanc offshore banking offer a useful insight and a good starting point to the process.
1. The Most Important Benefits of an Offshore Account
WG Hill, the author of the underground classic PT (The Perpetual Tourist), was quoted as saying: “Get your money out of country, before your country gets the money out of you!” And this strikes at the core of what offshore banking is about. Give you one example. Let’s say you, chakrock owe a tax bill which you are contesting. Now, in most of the modern Western democracies, it’s a simple matter for the government to seize the funds from your domestic account. One day you have $10,000 in there – and the next day you don’t. And such nations also get the banks to do their tax collecting for them. This is done by the practice of automatically deducting a withholding of tax on any interest earned. In this way your domestic banks are tax agents and put the government’s interests above your own – the client.
Opening an offshore bank account puts your funds out of harm’s way. If you had $10,000 in an offshore account, your own government could not siphon it off automatically. And if you are banking in a place where there is no tax charged on interest, then your funds are growing quicker – without any withholding taxes being applied at source. An offshore bank account also gives you more, mytaggys financial privacy – something in great demand in this increasingly regulated world. Then there’s the flexibility that comes with having more than one bank account – in more than one country. This strategy allows you to hedge your bets and keep your cash in dispersed locations.
2. Choose Your Jurisdiction Wisely
Not all jurisdictions (countries) are equal. Every bank is governed by the laws of the country it is licensed to operate in. It is also governed by a plethora of internationally-applicable financial oversight regulations. While some typical offshore tax havens appear ideal as banking jurisdictions, bmblotto the truth is that often they aren’t – precisely because they have been, or are being, targeted in some way by anti-money laundering laws or other financial restrictions on how they conduct business. You don’t want to end up in the middle of such a financial conflict.
Another factor to take into consideration is the geographical area in which the bank operates and the existence of any information sharing treaties or tax-collecting agreements between the countries in that area. Where you currently live in the world impacts on where you can bank offshore. For remember, offshore simply means somewhere other than where you currently reside.
3. The Truth About Privacy and Anonymity
Swiss banking has always been held up as the pinnacle of banking privacy, and that largely holds true – even though they are under increasing pressure to comply with international norms. The Swiss, however, have a vested interest in maintaining their USP (unique selling proposition), canbioca that they provide the most secure and private banking in the world. But privacy in an offshore bank is conditional. Most offshore banks will be covered by privacy protection measures, which could include such things as it being a criminal offence for a bank employee to disclose the details of any client’s financial affairs. However, these laws can usually be breached by the presentation of a court order issued on the basis of suspected criminal activity.
This is all well and good for those of us who are not criminals, and usually means our privacy is pretty well assured. The trouble is in the definition of the word “crime”. It’s well known that certain banking jurisdictions have now succumbed to pressure to include tax avoidance as a criminal offense – meaning your account information could be disclosed under such an assertion if part of a court order from another country. So you may as well accept the fact that truly bullet-proof private banking is hard to come by – and anonymous banking is a thing of the past.
4. The Impact of KYC and FATF
Offshore banking has become a lot more restrictive since 9/11 – as the US enforces stringent regulations aimed at combating what it terms money laundering. This catchall approach means that straight-up, honest people find themselves having to jump through hoops just to get started. Unfortunately, there seems to be no end in sight to this process – so all you can do is bite the bullet and proceed.
When you first apply to open an offshore bank account you will immediately feel the impact of KYC (know your customer) regulations. Banks have a way of making this requirement sound as if its in your best interest, but that’s just them trying to sweeten a bitter pill. In effect, the bank will want to know a lot more about you than they would have a few years back. They will want not only to sight your valid ID, proof of address and business, banking or personal references, but they will also want to know what you do and what type of account activity to expect.
5. What You Need to Open an Offshore Account
Opening an offshore bank account needn’t be traumatic – if you know what to expect and what you’re in for. You need to carefully consider your banking requirements. Do you want a personal or corporate account? In most cases a personal account is sufficient – and is usually easier to open. Some offshore banks will only open corporate accounts in person – not on the internet or by mail.
Of course you’ll need to have valid passport, and will have to get it notarized by a Notary Public (which you’ll usually find in large legal firms). This process involves making an appointment with the Notary and having him sight your passport, then make a copy and add his Notary seal and signature, stating he personally viewed your passport. You will also need one or two utility bills as proof of residence.
The good news is, once you have gone through the mill and opened your account, you’ll find the bank (like any company wanting to make a profit) will want to retain your business and keep you happy! A good banking relationship is like gold – so hang on to it.
6. The Facts About Offshore Credit Cards
Most offshore banks will readily offer you a debit card – you know, a plain ATM card like you have from your domestic bank. These are usually Cirrus and Maestro branded, although in EURO countries Visa Electron is quite popular. Now while these cards are very useful, the main function (when issued by an offshore bank) is to withdraw cash from ATM machines.
This is where the desire and need for a full-blown credit card comes in. However, due to rules laid down by Visa and MasterCard International – such cards are usually only available to residents in the country the bank operates from. So, for example, if you have a bank account in an offshore jurisdiction, their Visa card may only be available to local residents – not you.
A good alternative is a Visa or MasterCard debit card – which is directly linked to your offshore bank account. When you spend money using it, the funds are immediately withdrawn from your current account. You can’t get credit with this card, but you do get full Visa and MasterCard functionality when traveling internationally – like hotel check-ins, airline bookings etc. These types of cards are not readily available offshore, but a few major offshore banks issue them to their international clients.
7. The Advantages of Accounts in Various Currencies
One of the benefits of banking offshore is the ready availability of multi-currency accounts – where you can open more than one account at the same bank, each denominated in a different currency. Now, why would you want to do that? The answer is simple – for hedging. In this volatile world currencies are always changing value. And as I write this, the USD is deemed to be heading downwards in value over time.
Most offshore banks that provide multiple currency accounts will allow you to move funds quite easily between them, as and when you see fit. So if you have a substantial amount of cash on deposit, then spreading your cash risk by holding different currencies is a sound financial decision – one made a lot easier by having an offshore bank account.