A Guide to Offshore Banking

Offshore banking has often been associated withcould mean the difference between keeping and
the underground economy and organized crime,losing what is rightfully yours.Tax EfficiencyAs
via tax evasion and money laundering; however,stated above, your savings, investments, assets
legally, offshore banking does not prevent assetsor business profits can grow almost free of any
from being subject to personal income tax onform of taxation. This does not mean tax
interest. Except for certain persons who meetavoidance, it simply means whilst your assets are
fairly complex requirements , the personal incomeheld offshore they will benefit from very
tax of most countries makes no distinctionfavourable tax advantages. There will for many
between interest earned in local banks and thosehowever, be a potential tax liability when you look
earned abroad. Persons subject to US income tax,to repatriate your assets to your home country.
for example, are required to declare on penalty ofThis will depend on your nationality and your
perjury, any offshore bank accounts-which maycountry of residence at the time of
or may not be numbered bank accounts-theyrepatriation.Asset ProtectionThere are many
may have. Although offshore banks may decidemethods in which to protect your assets using an
not to report income to other tax authorities, andoffshore structure, in the form of an investment
have no legal obligation to do so as they areproduct, an IBC (International Business Company)
protected by bank secrecy, this does not makeor a offshore trust, or even a simple offshore
the non-declaration of the income by thebank account. These will protect your assets
tax-payer or the evasion of the tax on thatfrom:* Protection from invasive bureaucracy*
income legal. Following September 11, 2001, thereProtection against lawsuits* Protect your assets
have been many calls for more regulation onfrom seizureThe simplest form of protection
international finance, in particular concerningoffshore is the nature of the offshore privacy
offshore banks, tax havens and clearing housesrules. What isn't known can't be attacked. The
such as Clearstream, based in Luxembourg, beingbasic form of offshore privacy combined with a
accused of being a crossroads for major illegalIBC or Trust is a very secure method to legally
money flows.An offshore bank is a bank locatedprotect your assets from prying eyes.Lawsuits
outside the country of residence of the depositor,are filed every week. Ex-spouses, ex-business
typically in a low tax jurisdiction (or tax haven)partners, disgruntled employees or predatory
that provides financial and legal advantages. Theselawyers may file a suit if they believe a potential
advantages typically include some or all of:*defendant is an attractive target. Losing such a
Strong privacy* Less restrictive legal regulation*lawsuit could cause a lifetime's worth of savings,
Low or no taxation (i.e. tax havens)* Easy accessinvestments and real estate holdings to be lost. In
to deposits (at least in terms of regulation)*light of this, placing assets offshore is a wise and
Protection against local political or financialeffective means of protection from frivolous
instabilityWhile the term originates from thelawsuits.Once your assets are held offshore they
Channel Islands "offshore" from Britain, and mostare unreachable by domestic courts. In the event
offshore banks are located in island nations to thisof a lawsuit, a defendant may be forced to
day, the term is used figuratively to refer to suchforfeit domestic assets, but offshore assets will
banks regardless of location (Switzerland,remain untouched. Offshore courts do not
Luxembourg and Andorra in particular arerecognize or carry out domestic judgments. This
landlocked).What type of services are availableinsures that assets sent offshore will remain
from offshore banks? The same as the servicesconfidential, secure, and permanently in the hands
from any high street bank, plus the extremelyof their rightful owners. Moving assets offshore
confidential Swiss style numbered accounts. Manywill create peace of mind that what's yours will
of the offshore banks listed on this site arealways be yours.Regulatory AdvantagesThe
respected AA credit rated international banks,regulations in force within most high tax countries,
that everyone has heard of before. They haveare there to protect investors, and rightly so.
simply set up an offshore division or branchHowever, due to the very strict nature of these
division within a tax haven to attract a share ofregulations, fund managers feel as if they are
the enormous international trade, and offer almostwearing a financial straight Jacket. It is difficult for
the same services as any domestic bank. Such asthem to compete with the returns of their
the following:* Personal and corporate currentoffshore-based partners who enjoy less
checking account* Personal and corporate savingsrestrictive regulation. Many offshore jurisdictions
accounts* Secure internet banking facilities*have very mature regulatory systems in place,
Anonymous numbered accounts (extremelyoften based on those present within the US or
confidential)* Debit and ATM cards, which arethe UK, yet they allow fund managers great
accepted globally* Credit cards* loans*freedom to add value for their investors. This is
MortgagesGoing offshore in simple terms meanswhy offshore funds nearly always outperform
placing your savings, investments, assets ortheir onshore equivalents. Within the high regulation
business concerns outside of your home country,onshore countries, excessive rules and
within one of the many tax havens. A tax havenbureaucracy often plague domestic businesses
is a country that has very favourable taxand operations. Valuable resources are diverted
advantages, which means that your savings,away from the productive process in order to
investments, assets or business profits can growmonitor compliance as a result of the restrictions
free of almost any taxation. Although taxation isimposed. Curing this problem is as simple as
only one reason why many decide to gomoving to friendlier shores. Offshore jurisdictions
offshore.PrivacyTo protect the free flow of yourare intentionally business-friendly and have
personal information and dealings. An offshoreregulations that are straightforward, simple to
entity has no obligation to release your personalunderstand and inexpensive to comply with.
or business information, affording you with aMoving a business offshore and enjoying a more
great deal of privacy & confidentiality. In generalpleasant business climate may require nothing
terms your personal information will not bemore than forming an offshore corporation and
divulged to any governing body or tax authoritytransferring assets from the domestic corporation
unless suitable evidence can be shown to proveto the foreign one.Is all of this legal?Do you trust
that you have been involved in criminal activities,your current bank or investment provider?
such as money laundering or drugChances are that they too have an offshore
trafficking.Financial privacy is becoming a thing ofoperation; most of the world's major banks and
the past. Almost every single transaction made atinvestment companies have an offshore present.
a bank or ATM, by law, must be recorded andDo you honestly believe that a triple A credited
filed. Consumer credit agencies maintain databasesrated investment company or bank would
full of sensitive information that is used andoperate in an illegal activity? Companies such as
shared by other organizations and agencies. AssetMerrill Lynch, HSBC, ING Barings, UBS, Barclays,
collectors routinely advertise their ability to locateDeustche bank, ABN Amro all have offshore
bank accounts, brokerage accounts, and realoperations. It is not the offshore industry itself
estate and business holdings. Should assetthat is illegal, it is only the devious activities of
collectors find substantial wealth, the individual orcertain individuals who may give the offshore
corporation becomes an easy target for aindustry a poor reputation. It is also true that the
lawsuit.Unless ethical and legal steps are taken todue diligence, and money laundering checks
insure privacy, sensitive and confidentialperformed by offshore companies is increasing,
information could easily get into the wrong hands.especially after the 911 terrorist attacks. Which will
Placing your assets, investments, savings bankensure that it becomes difficult for criminals to
and brokerage accounts offshore will keep themabuse the offshore industry.Thomas Crown is an
off the asset collector's radar screen. ConsumerAmerican financial advisor currently living and
credit agencies and government departments doworking in the Grand Cayman Islands. He
not have access to foreign account records orcurrently runs the website which is a Beginners
transactions. Domestic property may be held inGuide to Offshore Banking. The site covers a
the name of a foreign corporation (IBC) or trust.wide range of topics; Offshore banking laws,
This insures that asset collectors and agenciesTypes of services offered, A large data base of
cannot locate it. By taking advantage of thesebanks, A pros and cons of using offshore banks,
methods an individual or corporation becomes aGuide to starting your own offshore bank.All of
smaller target and the likelihood of being sued isthe information at is listed for free, their is no
reduced. Utilizing offshore tools to protect privacycharge for anything on the site.