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Things You Must Know When You Bank Offshore
Before you plunge into the world of offshore banking, however, you must get your feet wet with these basic facts. After all, education is empowerment, which is very important in the protection of your monetary interests.
It Is Legal
Despite its reputation as the top banking choice of tax evaders, drug lords and other shady characters, offshore banking is a very legal, very legitimate and very liked method of doing financial transactions across countries, currencies and cultures. Usually, you can find popular financial instructions that will serve your personal and professional needs to bank offshore in tax havens like Switzerland, Cayman Islands, Andorra and Luxembourg.
There are two basic conditions under which offshore banking can be considered a criminal offense. First, you use your offshore accounts to evade taxes in your home country. For example, US laws require its citizens to declare all taxable assets no matter their location.
Second, you launder money from illicit activities by using your offshore accounts. This is where the notoriety of offshore banking when it comes to coddling criminals comes in. It must be noted that more stringent international laws are cracking down on money launderers.
Indeed, when you bank offshore, you need not worry about the Feds behind your back just as long as you follow the laws. And you will enjoy the benefits that offshore banking provides for its clientele especially when it comes to moving money around the world at the speed of a mouse click.
It Has Its Merits
And speaking of benefits, the following are the advantages of offshore banking if and when you follow international banking laws:
- Maximum banking privacy, which was popularized by the Swiss banks
- Protection of financial assets from litigations and claims
- Highly beneficial account structures and interest rates
- Global access to financial assets often in multiple currencies
- Higher degree of protection from unstable economies in home countries
- Low to no taxes on deposits
- Greater physical security on cash and non-cash assets
With all these benefits, it is now wonder then that many individuals choose to bank offshore.
On the downside, however, you must be prepared to deal with the disadvantages of offshore banking. These include associations with the underworld of crime, less financially secure accounts vulnerable to banking crises, and high costs in the establishment and maintenance of accounts. It must be emphasized that these disadvantages are minor inconveniences in the face of the benefits of offshore banking.
If your worry concerns high deposit amounts, don't be discouraged by it in your decision to bank offshore. You will discover that banks offering offshore service will provide for scale options that combine affordable fees with reasonable deposit amounts and excellent customer service.
After all, offshore banking is not just for the rich and famous. Or infamous, for that matter, but that is another story.