An offshore banking facility offers banking services to customers outside the customers’ country of residence. Offshore banking facilities generally carry high charges or are only offered to customers who can meet the high minimum deposit requirements. Offshore banks offer a wide range of benefits over and above what is available through standard banking channels which makes them popular, especially with those who have high net worth who wish to diversify their investments beyond their home country.
Benefits of offshore banking
Greater Privacy – This is one of the key premises of offshore banks. Most offshore banks are established in jurisdictions that offer much higher levels of privacy to their customers; this is generally enabled through strict client data secrecy legislation.
Tax Benefits – Yet another key advantage of offshore banking is the range of tax benefits that may be available to customers. Offshore banking facilities are generally sited in places that offer high rates of tax incentives to customers. The favorable tax rates in an offshore country are designed to promote a healthy investment environment that attracts outside wealth.
Political and regulatory stability – Offshore banking havens like Switzerland and Singapore have a long history of political, economical and regulatory stability. A customer living in a country which faces political or economic uncertainty or a frequently changing tax regime or an investment climate that changes every time the government changes will look for a hedge against such risks.
Offshore banking facilities protect their customers’ funds from such political and economic concerns and provide them with a safe and secure environment that allows them to invest their funds in the manner they see fit. Their stable inheritance laws also increase the attractiveness of offshore locations.
A range of services – Offshore banks offer their customers a range of services that includes (but is not limited to) : multi-currency savings and investments to help clients grow their wealth; specialists who can help structure investments; easy, worldwide access to money; investment products that may not be available in one’s country; access to international markets and major international exchanges; a relationship manager if a client requires a more hands-on approach from the bank towards account management.
Today, many high street banks also have offshore arms – for instance, Citibank Singapore’s offshore arm is the Citibank International Personal Bank, Singapore – allowing their clients to enjoy their bank’s services wherever in the world they may reside.