Speaking about offshore we need to understand what this term refers to.
The concept dates from the beginning of the 19 th century in the neutral Switzerland, and nowadays is used to describe places or locations apart the borders of individual’s country. Offshore as a concept can refer to foreign entities like companies, investments, banks, corporations, etc., and their main objective is the tax avoidance to fully exploit relaxed fiscal regulations.
The above may be the kind of definition that you will find in different sites, and may sound a bit awkward also thanks to the reports that media do and delivers on offshore corporations or investments. A general idea of what people think about offshore is tax evasion or money laundering. That is why we are going to present a full scope on what offshore really is.
Offshore in reality means to invest your money or banking in certain companies that are not located in your country. Also, you won’t be doing any tax evasion, or hiding your money from taxation institutions, and above all everything is completely LEGAL.
Reasons to open an offshore bank account
There are multiple reasons why you should open a bank account in an offshore company outside your country.
Below you can find our top ten:
1. Personal information
If you would like to open a bank account in your own state or in countries that don’t support the offshore policy, you will need to provide too much personal information, which in reality you don’t want to share with other people. Besides, you do know what they say about envy and greed? Once people know about you, your fate can have a twist. So why become popular, when you don’t want to be one? Join the offshore world, open your account in an offshore bank and keep your information private without being vulnerable to other people. In addition if the government wants to confiscate or freeze your assets it will be much more difficult to undertake such an action against offshore banks. Governments, even though their incredible power, cannot apply their competence in places where they don’t have jurisdiction. So maximize your freedom as much as you can and do not let the government pick an eye to your data or bank account.
Confidentiality is a luxury that people are ready to pay a lot to have it, so you can have it thanks to the legislation in this country that allows it.
2. Reduced tax rates
We all know how the world is going. Take major parts states of Europe, wherever there are leftist governments and want to maximize their votes from the poor and vulnerable segments of society, they will only speak about one thing: progressive taxation.
You earn more, you have to pay more! Well, that doesn’t quiet feel right; because you know that the government is stealing from you. So, why risk all your money, when all you can do is to move some of your savings into an foreign bank account, and you must also know that these states aren’t nicknamed heaven for no reason. They don’t tax you like your homeland. Nowadays we live in a world where governments make more and more promises to accomplish great things, but they don’t mention their huge debts that they have inherited from previous governments.
Thus, your money will always be shark food
and you will have to fight in a terrain that is not suitable for you.
Don’t they say that the war is always won by America? To avoid this, the offshore world can help you to keep part of your saving, or even better, all of them safe from the “predators”? Your country may love you, but money smells better, so take care of them.
3. Banks have a constant threat
In principle, they offer money with lower interest so that you can achieve your dreams, goals or make your plans true.
They do say that the bank is a stranger who gives you an umbrella on a sunny day and leaves wet while it’s raining cats and dogs.
You want to ask why? It is obvious; they are sponges, who just want to fill with your money by pretending they are keeping an eye on them. Oh thank you, dear! Have you ever asked yourselves how much money do they keep within their vault or better say have you ever checked your money is there? Well, the bank seems to accumulate huge amounts of money, but unfortunately for you, the money is always on the move, and what they keep is just small amounts.
As a result, they will not always answer to your needs. On the other side, offshore banks, thanks to the tax-free policy implemented and enforced on the location where they operate are more secure and more responsible guardians of your savings.
One more reason to thrush the banks prestige is that they often credit big investments. Thus, you will risk your savings without a secure guarantee that their investment will be a better profit. You don’t want somebody to gamble with your money, do you? Let alone when that money is hard earning savings.
4. Open deposits with higher interest
Usually banks make numerous offers to open deposits and benefit the interest that they award you. In a world like ours it is very difficult to hold money. Firstly the consumerism is widely among anyone and you just can’t resist the idea to spend and spend more. Secondly the governments, especially in the west, encourage and pass bills that oblige people to declare their income, and their spending. Little is left so people are tempted to open deposits in return for certain interests. We have figured the catch as well.
The interests may seem a little high in the beginning, but it is quite proven that interests rate do not follow the trend of inflation. Besides, your money is always in the hands of certain subjects that will borrow it to other people so that their banks can profit more and more.
As a result you are always risking money, and not saving hard-earned incomes. Well, there is a solution to that too. The offshore banks offer higher interest rates thanks to their low income taxes that they have to pay, and their low cost organization. Thanks to the fact that they operate in tax heavens offshore banks can afford to offer higher interest rates for your personal deposit.
5. Be prepared when the storm comes
Can you be prepared during all time? We are moving towards a digital market, where thanks to a bank card you can buy and pay for everything. Your bank may not be as secure as it seems, and the risk of bankruptcy is always behind the door. Knock-knock buddy! The bank can finance activities, which may not result successfully or even worse be in trouble with the government, with the latter one, freezing all the assets, including yours.
What to do next?
How to feel secure in an insecure world, where money changes ownership faster than the global warming? To add more secure steps to your savings protection, the offshore banks offer more credibility to keep your money safe. We all remember what happened with the 2007 crisis, the escalation that left the banking system near total collapse for several years, let alone the total lack of responsibility and accountability. So don’t think twice. Just act, and open your private account in an offshore bank. You will not regret it, and thank us later.
6. A better diversification of the currency
When European Union agreed on a singular common currency and introduced it to the world, somehow US dollar lost its value and never regained it again. In addition, the British pound also fell some pounds shorter after the Brexit event. Not all of us are economists or have that kind of education to understand the market, stock exchange, the inflation, the volatility of prices, nor the currency. Firstly, there is no need to keep all your money in one pocket as dividing them reduces the risk of a total loss.
So why keep all of your savings in one currency, when you can divide them into two, three or more stronger currencies and be prepared for the storm to hit. Secondly, you might have noticed that banks or financial institutions often play with the currency offering you a lower amount then the real currency has in that moment. On the other hand those offshore banks we are speaking about, will not only guarantee your money, but also provide better percentage rates when it comes to foreign currencies. The flexibility of foreign bank accounts, provides investors or businesspersons unlimited access to lay out money in international markets.
7. Give yourself more access
Even though you may have a bank account, you can’t simply invest your money wherever you want, at least not without filling volumes of papers, declaring your income and many other bureaucracies. If you want to live abroad and rent an apartment or just want to register in different shops to buy things for yourself, a bank account will be necessary.
Besides, to open a bank account you will have to provide your personal data, which you may not be quite comfortable with that. What about going to another country just to visit yourself and receive treatment to your needs, thing that you are not able to profit from healthcare in your country?
You will need to transfer money so that you can pay for your services, but this becomes quite a problem if your government has imposed outright prohibitions in order to regulate flows from the capital or to know the transaction taxes, actions that can restrict you from moving your money to another bank.
These problems are quite solvable if you just decide to open a foreign bank account which don’t impose capital controls, allowing you to move and spend your money according to your needs.
8. Save yourself time
Money transfers needs time to happen. Even though you have enough income to pay your bills, it is the bank that will take time to proceed with your request.
Domestic money transfers need 24 hours to be completed, and those international transfers require 5 days or even more. If you are a businessman and want to pay for your business needs, or you just want to make an urgent transfer, both transfers whether the domestic or the international will not happen in a snap of your fingers.
Certain people can’t afford to waste time, because they need their business done in as soon as possible. Banks opened in an offshore location operate for less time, thus providing and satisfying your request and fulfilling your needs to your desire. Time is gold, and this must be taken for granted.
9. Lower transaction fees
For transaction money whether domestic or international banks will charge you money, fees that can be expensive. We are living in a digital world, and many of us just want to do anything by our computer or cell phone.
Still, none of us wants to pay those expensive amounts that banks require for a transaction to take place. Offshore banks provide much lower transaction fees that will suit you and your wallet.
Also, offshore banks will offer you more privileges according to the traditional ones. All it takes is pay a monthly fee which is constant, and in return the bank will solve problems that may arise faster and in a shorter time.
Finally we all agree to pay as long as the service we get in return is appropriate.
10. The expertise of offshore banks
Given the fact that offshore banks operate in an international market and with people from different states, they offer a very professional expertise and understanding of different banking jurisdiction. Many countries in the world that allow offshore banking in their legislation are well-known for the high expertise of these banks. Their staff is known to have a lot of experience when advising and serving people from all over the world.
We all want to be served and treated by specialists when we decide whom to trust our money. For this reason offshore banks are widely considered as great advisers and managers for people’s money who live abroad.
How to open a foreign bank account?
Usually, offshore banking is associated with something dark, occult, and illegal, linked with six digit number accounts and not for ordinary people.
Actually the opposite is true. Even an average person can open his or her offshore bank account in any of the countries where this activity is completely legal. If there is something to be specified, is the characteristics that various countries apply on the offshore activity.
Apart from this, there is no restriction for you to deposit your money in an offshore bank and take all the benefits. Below we are going to show you some requirements on how to open a foreign bank account.
The basic information that you will have to provide is your personal data. In principle, opening an account on a foreign bank has the same procedure as you do in your domestic bank.
However, we did mention above that your data is protected. The elements that you need to provide to the staff of the bank, are: your name, last name, date of birth, citizenship, address of your residence, and your occupation. In addition, you will have to submit certain documents to prove and to make sure that the data you have given to the bank is accurate.
Thus, a copy of your passport, ID card or even your driver’s license can serve as proving documents for your personal data. Also, the bank may require a document that proves your
Thus, you may need to submit a document that is otherwise known as “a utility bill”, which in other words are separate bills reflecting the status of the utilities you use in your routine day life, such as electricity, gas, phone etc. finally, the foreign bank account may require notarized documents or in special occasions, documents that have an “apostilles” stamp, which you may easily get this procedure done through the Ministry of Foreign Affairs, the Ministry of Justice or an authorized institution.
After submitting the basic documents, the bank may require other additional documents that serve to keep the account legal.
As we said opening an account on a foreign bank, is completely legal, that is why the bank does other verification to keep things in this line, and most of all to avoid activities like money laundering, illicit money that may come from criminal activity, money that comes from tax fraud or other illegal activities, which in a hasty manner or not are linked with offshore banking.
Some of these additional documents include your balance sheet of your previous account. In this case a bank statement for your last 12 months activities would be sufficient for the foreign bank account. After that, the bank may ask about the general nature of your account.
Due to the fact that offshore is known as a tax- free banking, the bank requires the intention of why you are opening an account.
Don’t take this as precocious, because it is a simple normal procedure to keep things within the law boundaries.
So, if you are going to deposit money that comes from your rent or other business you may have, a single income document will be enough. Also, if you run a sales business, in different areas, the contract that you sign may be required to prove that the business is legal. After completing the documents part, you get to choose certain alternatives that an offshore bank offers for its clients. They offer to you the choice on which currency your money is held.
This kind of diversification is to your benefit, especially in a moment when your country’s currency may not be strong compared to other currencies.
Opening an account in one currency, which due to your predictions or to your knowledge will increase in the near future, gives you the opportunity to earn interest rates on your deposits.
To deposit money in a foreign bank account is a simple operation that you can do via a wire transfer. All you need to know is that international transfers have a certain fee and can differ from one bank to another. So, you need to find the best option for you.
Finally, it comes the beautiful part: how you get to spend your money. Offshore banks issue or provide you with an ATM card that you can use your money all over the world. There is also another option through checks, but it is not much recommended, because of the confidentiality policy that foreign banks apply to their customers, so using an ATM card is better.
A third method is to keep two bank accounts, one in a foreign bank and one in your home state. Thus, you can transfer money from your offshore account into your local bank account. In general, to wrap it up, opening an account in a foreign bank is not only easy, but also quite possible for everyone with average income. It all starts with the submission of certain documents regarding your personal identity, verification documents about your occupation or work, choosing the currency that best suits you and finally the withdrawal method, so that you can spend your money to your needs all over the world.
Where to open my account in a foreign bank?
There may be several countries worldwide that can suit you and your interest.
Offshore banks vary on certain aspects, which can be: asset protection, offshore banking for companies, offshore banking for high interest rates, tax-free countries etc.
Below we are going to provide the characteristics of some countries, where you an open an account on a foreign bank.
For secrecy, confidentiality and asset protection, there isn’t a better country then Switzerland. This country is quite popular about this banks and they do have a history about that. Switzerland has declared its neutrality and the political atmosphere is more than favorable to open a bank account.
Switzerland does not tax many incomes on interests, inheritance and dividends. Also, Swiss banks do not reveal the information of an account holder without his written permission. In addition, the legislation stops them from doing such a thing. The Swiss authorities can fine the banks if they reveal personal information of the account holders. The privacy can be revealed only when they are dealing with a criminal act. Finally, once a year, the banks report to foreign tax authorities for any tax evasion that may arise.
2. Cayman Islands
A lot of people open accounts in a foreign bank to benefit from tax-free policy and the Cayman Islands are a tax-heaven. They offer minimal tax to foreign persons, companies and businesses. They don’t tax income, payroll, corporations, and businesses, people who withhold their money or huge gains, so there is no capital control to allow people to transfer funds in whatever currency they feel suitable. In addition, Cayman Islands provide a confidentiality policy for their clients, and they have become much competitive in the most important currencies of the world. When we said that they are a tax-heaven, we meant that literally.
The Cayman Islands are a place to keep your money safe. The last, but not the least, the political environment in Cayman Islands is as perfect as the tax- heaven reality.
This small island on the Caribbean will bring a lot of positive aspects to individuals or businesses who wants to open bank account on this location.
Nevis has an independent jurisdiction and is organized according the English common law. They have a stable political context and also a rising economy. Their most known activity is the financial industry. Thanks to high professional infrastructure, people who want to open an account at the Nevis banks will be more than satisfied with their outstanding privacy and asset
They have an incredible telecommunication system with an easy access to Europe and North America. You can move your funds in whatever currency you like as they do not impose a foreign exchange. Finally, for people who want to invest in this location, citizenship alternatives are offered.
If you have a corporation and feel like you are being stolen by the high amount of taxes you have to pay, then Luxemburg might be the perfect place for the confidentiality policy, asset protection and as well one of the tax-heaven countries of Europe.
Luxemburg has one of the most favorable tax legislation. They offer one of the lowest corporate tax according to other countries, especially to United States. That is why mega companies of America open branches and register them in Luxemburg to avoid the high tax rates.
The country has a big tradition regarding the secrecy and privacy, thus no personal data is revealed. Starting from 2020, Luxemburg offer free public transportation, but most of all will keep providing an economically, stable situation to keep luring more and more huge corporation.
5. Jersey, not the New one
Jersey is a known location for its financial and political independence. From the beginning of the 20 th century, Jersey has been known as a tax-heaven country. In Jersey, there is no need to register a trust account for companies that manage personal financial accounts. Since 2008, Jersey has abolished all taxes for corporations that do business on the island, except the financial services firms, for which the tax is only 10%. Hen capital is transferred, no taxation levied. Also, very low taxes are applied on goods and services, as well the transfer of immovable property. A real heaven, right? Jersey offers the chance to get the citizenship for people who invest money in the island.
6. Puerto Rico
This small country has a great economic political environment and is one of the best countries to offer great deals to open an account in a foreign bank. Puerto Rico has a close connection to the United States so it has become a great host for many Americans who have opened bank accounts in this country. Puerto Rico has a secrecy policy which also provides easy option to open an account as it does not require a big amount of money to open a deposit. In addition the banks offer full multi currency facility to better apply for your needs.
Singapore offers the possibility to open a bank account in multiple currencies that better suit you. While other banks charge a certain fee when making transfers, Singapore offers the opportunity to do this operation for free. It has a political and economic stability, which helps keeping a great atmosphere for persons and businesses that want to invest their money in this country.
Like many other countries, Singapore banks also applies the confidentiality policy to the personal data of its customers. The initial amount to open a deposit is only of 500 US dollars which make this country easy reachable for people with average income.
Which bank serves you better?
The world is changing and so are governments and banks all over the world.
Having a bank account is something quite normal as today we are doing all the payments via digital methods. The foreign banks offer many possibilities that will not only make you pay less taxes and fees, but most importantly save your personal information, and even offer you higher interest rates to make profits from your deposit. To choose the best foreign bank for your needs, it’s better to understand the criteria’s under which you can open an account in a foreign bank.
Also, you need to realize all the alternatives on how you can move your money and make international transfers at low rates that will not damage your interest. For more detailed information like the currency or the method to make withdrawals from the bank, you can also consult a specialist to better inform you on the procedures and legislation.