Offshore banks are banks that are located outside a country other than the account holder’s country of residence. Moreover, offshore banks are specifically licensed by their jurisdictional authority(ies) to offer offshore banking services. Offshore banks are known for the wide range of benefits they offer account holders vis–à–vis retail bank accounts. This has made them popular both amongst high networth individuals and businesses that operate internationally.
Here, we will present a few tips that will help you get started towards choosing a great offshore banking service, one that will fit your needs and requirements to a T, or as close to it as possible:
1. Assess your needs
Before you choose an offshore jurisdiction and an offshore bank, you will need to consider your requirements as objectively as possible. Do you want to establish personal and/or business accounts? Do you need an account with multi-currency features? Do you need a debit and/or credit card(s) with global acceptance? Do you want to bank with an offshore institution with a strong pedigree in estate/inheritance planning? Consider not just your current needs but also your possible future requirements.
2. Choose the right country / jurisdiction
Choose your offshore banking jurisdiction carefully and in accordance with your needs. Ideally speaking, your offshore jurisdiction should be politically and economically stable with strong and reliable regulations especially inheritance laws. The presence or absence of double taxation agreements (DTA) or tax information exchange agreements between the jurisdiction you are considering and other countries, especially your home country, could possibly influence your decision. You may either want to take advantage or these agreements or avoid them.
3. Choosing a bank
Check out the various banks offering offshore services in your chosen jurisdiction. You may favour a brand whose name you are familiar with or you may be looking for a bank that offers you the specific features and benefits that you are looking for.
Whatever bank you decide on, the bank must have experience with and value international clients. Banks that have mainly local business may not have the expertise that is required in today’s highly complex regulatory environment for international banking. Global banks like Citibank, HSBC, Standard Chartered Bank etc. have presence in several countries and the international expertise that you are looking for. They can also help you with opening an offshore account from the comfort of your home.
Service levels, banking and support channels, customer service languages are all important factors to take into consideration before you decide upon a bank.
4. Range of products and services
Your offshore bank should be able to offer you a suite of products and services that can help you effectively and efficiently manage your international holdings, optimize your tax outgoings, protect your assets from creditors, estranged spouses or other family members, achieve orderly, controlled and structured transfer of assets to younger generations of your family and ensure continued ownership of businesses without fragmentation between multiple owners.
5. Security, privacy and confidentiality
The proliferation of digital banking channels like Internet and mobile banking have given customers
“anytime, anywhere” convenience. While you will need to practice good security habits, also ensure that your offshore bank also offers security measures like:
▪ Multiple security layers that include the use of login usernames and passwords, security devices, instantly generated passcodes that are delivered through SMS or email etc.
▪ Application of additional security layers to all financial and important non-financial transactions.
▪ Instant alerts through SMS / email on execution of a wide variety of financial and non-financial transactions.
Your offshore bank should also offer you greater levels of data confidentiality and customer privacy that is available with a standard retail bank.