Why Bank Offshore

Who Can Benefit From Offshore Banking?

The benefits that offshore banking poses are dependent on whether the account holder is an individual or a corporate client. The main advantages of offshore banking are the following;

- Offshore banks provide access to politically and economically stable jurisdictions. This may be an advantage for those residents in areas where there is a risk of political turmoil who fear their assets may be frozen, seized or disappear for example, during economic crisis etc. However, developed countries with regulated banking systems offer the same advantages in terms of stability.

- Some offshore banks may operate with a lower cost base and can provide higher interest rates than the rate in the home country due to lower overheads and a lack of government intervention.

- Offshore finance is one of the few industries, along with tourism, that geographically remote island nations can competitively engage in. It can help developing countries source investments and create growth in their economies, and can help redistribute world finance from the developed to the developing world.

- Interest is generally paid by offshore banks without tax deducted. This is an advantage to individuals who do not pay tax on worldwide income, or who do not pay tax until the tax return is agreed.

- Some offshore banks offer banking services that may not be available from domestic banks such as anonymous offshore bank accounts, higher or lower rate loans based on risk and investment opportunities not available elsewhere.

- Offshore banking is often linked to other structures, such as offshore companies, offshore trusts or foundations, which may have specific tax and asset protection advantages for some individuals.

- Offshore banking creates additional tax and banking competition and is an advantage to the industry as tax competition allows people to choose an appropriate balance of services and taxes.

Individual Clients

The majority of people who open an offshore bank account fall into one of the three following general categories:

1) High net worth individuals – these are people with a disposable income in excess of one million US dollars.
2) Expatriates – these are people who are located overseas away from their home country either on an employment assignment or in retirement.
3) Business owners – generally these are individuals who own companies whose shares are owned by family members or a close working partnership.

According to statistics the majority of individual offshore banking clients come from Europe, Australia and North America, but more recently larger numbers of Eastern European, African, Indian and Asian individuals have found that offshore banking structures suit their own personal requirements.
The ‘type’ of person who falls into the above three categories range from those with inherited wealth to those who have earned it by themselves and they all utilize offshore banking for the following benefits: taxation planning, estate planning, pre-immigration or repatriation planning, privacy and asset protection.

Corporate Clients

There are far more corporate clients with offshore banking needs than individual clients. They fall into one of the following categories:

1) Multi-national corporations.
2) Large industrial and trading companies.
3) Shipping companies.
4) Financial services and banking institutions.

The benefits of offshore banking for such companies are diverse and range from the fact that a large number of companies actually outsource parts of their operations overseas and require accounts in these countries to the fact that many offshore jurisdictions have tax free zones through which companies can operate all or part of their operations tax effectively.

To learn more about Offshore Banking Contact Us today. Alternatively, check our How do I Start page to see the steps to take in how you can open an Offshore Bank Account.

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