Offshore accounts are to put it simply, bank accounts located in a country other than the account holder’s country of residence. Offshore bank accounts offer a wide range of benefits vis–à–vis retail bank accounts. This has made them popular both amongst high networth individuals and businesses that operate internationally. The benefits offered by offshore bank accounts can be classified under three broad categories:
– To protect
– To preserve
– To grow
We will take a look at each of the three broad categories of benefits in some detail below:
Offshore bank accounts offer protection in different ways. Let’s look at how:
High levels of confidentiality
One of the most compelling benefits of having an offshore bank account is the confidentiality that it affords. Most offshore banks are established in jurisdictions that offer much higher levels of privacy to their customers; this is generally enabled through more relaxed customer reporting norms or through client data secrecy legislation.
We live in an age where anti-money laundering and anti-terrorism regulations all over the world have effectively stripped away banking privacy veils. But, despite a recent agreement to cooperate with US tax authorities, Swiss banks are still quite secretive. While they will cooperate with investigations of tax fraud (criminal) they will not reveal data or turn over documents in civil matters (private lawsuits). If you are looking for that kind of privacy when you want to protect your assets from frivolous lawsuits, an offshore bank account is your best bet.
Offshore banks have a history of political, economic and regulatory stability. If you are living in a country facing an uncertain political or economic climate or a frequently changing tax regime or an investment climate that changes with every change in government, an offshore banking account will act as a hedge against such risks. You will be given the opportunity of investing or disposing off your funds in the manner you see fit.
An offshore bank account can play a critical role in helping you pass on your legacy the way you desire. What is also of help is that your offshore account will be located in a jurisdiction with a stable regulatory environment that includes stable inheritance laws.
Offshore bank accounts also offer you the choice of placing your funds in safe savings accounts and other conservative, low-risk avenues. Your money will stay safe and show modest growth. Moreover, since most offshore jurisdictions have little or no income and capital gains tax your money will grow appreciably more than in a tax-regulated environment.
Offshore bank accounts usually offer their investors a wide choice of investment products. This includes shares, government / municipal bonds, commodities, fixed deposits, insurance / retirement / annuity products, mutual funds, currencies, options, structured products etc across a range of international markets. Risk profile evaluation and investment research and advisory services may also form part of the offerings bouquet. You will be afforded the opportunity to grow your wealth in line with your goals.