|
Offshore Banking Information
by Kevin Wessell
Offshore Banking
Offshore banking or Offshore banks refers to the many banking and investment institutions
available in countries and jurisdictions other than the depositor’s home country. While
technically any bank can be considered an Offshore bank when it meets the above criteria,
the term is generally reserved for the banking institutions located in what are consider
low-regulation, low-taxation “haven” jurisdictions.
Since their origin, Offshore banks tended to be unfairly portrayed by both media and the
home jurisdictions alike--the accusations have ranged from tax evasion to money laundering,
but careful examination of the true purpose of the Offshore banks, and an unbiased
examination of where illicit funds are truly held or “laundered” sheds light on the
situation. Other false accusations have centered around criticism of unsafe environments,
poor regulation, etc. Again, these could not be further from the truth. Most Offshore
banking jurisdictions of any repute have very sophisticated, stable banking regulations,
and because it is in their best interest to attract and keep depositors, these regulations
are geared towards meeting the needs of the depositor. Many of these jurisdictions rely on
foreign capital held in their banks as their primary economic factor, and as their only
source of foreign investment.
What is Offshore Banking?
The broad definition of an Offshore bank is that of a bank that is located in a jurisdiction
or country that is different from the jurisdiction or country that the depositor or
investor resides in. One of the many benefits of holding an Offshore banking account
is that they are usually located in tax havens that provide substantial asset protection
and confidentiality benefits to the account holder. These jurisdictions also often allow
for a relaxation of restrictions with respect to the types of accounts available to
depositors or investors, and how then can manipulated. This amounts to decreased
regulation. The more popular offshore jurisdictions often provide a substantial decrease
in tax liability. While technically any bank outside of a depositor’s home country can be
called an “offshore bank,” for our purposes here we will focus only on those proven to
provide quantifiable benefits as outlined above. These Offshore banks can be located in
actual island-states such as the Caymans or Channel Islands, or in landlocked countries
such as Switzerland--being surrounded by water is no longer a determining factor.
As mentioned in our opening paragraph, there are a number of misconceptions and myths
associated with offshore banking in these offshore financial centers… Are Offshore Banks
the Haven of Money Launderers and Criminals? We have additional information on Offshore
Banking Myths that should be taken into consideration.
Where Should an Offshore Bank Account be Established?
It is important that the proper jurisdiction be selected when deciding which jurisdiction
to use as an offshore banking jurisdiction. The majority of the offshore jurisdictions have
prudent, sound regulations in place geared towards safeguarding the deposits and maintaining
their confidentiality. However, some weigh their benefits in taxation, while others in
confidentiality, and so forth. Though they all offer a comparatively confidential and
secure environment, it bears consideration to outline what the banking goals are and then
choose the jurisdiction accordingly. A small minority of the offshore jurisdictions do a
poor job of managing and regulating their banking institutions, but the informed investor
or advisor will deem these as unsuitable for themselves or their clients. Further, these
poorly organized and run jurisdictions are often manipulated by illicit depositors and
hence prove easy targets of the FATF (Financial Action Task Force) looking for money
laundering or other criminal activity.
Offshore Banking History
It is an unfortunate fact that Europeans have always been subjected to relatively heavy
tax burdens. This was as true on the British Isles as it was on the continent. Faced with
the prospect of watching their hard earned assets and wealth diminish with every out-reach
of the tax collector’s hand, they were ripe for a solution. And a solution came--the small,
island nation state known as the Channel Islands convinced these frustrated depositors that
deposits placed in its banks could be free from scrutiny and hence the heavy-handed taxation
burden. The Euros were convinced--and soon this service thrived, with other small
jurisdictions becoming savvy to this foreign capital-attracting status and they began to
revamp their banking institutions, adopting sound, pragmatic banking rules and regulations
that eased the potential concerns of investors and depositors. The Offshore bank was off to
a running start!
And soon the term “Offshore banking” became synonymous with any smaller, haven jurisdiction
that offered safe, secure, confidential banking with practical regulations. Soon the rest of
the world was “in the know,” and began to look at these havens as viable solutions to their
needs. Americans, Africans, Asians, etc., found these Offshore banks quite useful for a
myriad of reasons. Unlike their banks at home, these Offshore banks were not regularly
subjected to political turmoil or economic strife, and were most welcome for their stability
and asset protection benefits.
In the years since they have come into greater use and thus more visible, offshore banks and
accounts have been unfairly portrayed by the media and by the larger jurisdictions as the
stomping grounds of the criminal underground--a veritable haven for their illicitly-obtained
assets and funds, or the choice locales for their money-laundering schemes. Money-wise
investors and depositors have long known that these prejudices could not be further from
the truth. They know that offshore banks can be remarkably effective havens for assets and
funds in need of safe, secure, confidential keeping. They know that these banks can
safeguard their funds from the perils of civil, economic, or political strife in their
home countries. Today, offshore banks continue to keep their end of the bargain and
continue to provide a safe, confidential haven for those seeking to safeguard their assets
and funds from the perils of undue regulation and taxation.
Many a discriminating depositor has benefited from the safe, confidential, and low taxation
environment that Offshore banking has to offer. While it is important to assess your goals
and discuss these with a competent, experienced agent before leaping into un-chartered
waters, there are many unquestionable benefits provided by establishing an Offshore account.
Their reputation among depositors and investors for providing a viable banking location
featuring protection from liability and confidentiality is growing, and Offshore banks will
continue with this hard-earned reputation for asset protection, tax reduction, and superb
confidentiality of deposits.
About The Author
Kevin Wessell, renowned asset protection and estate planning expert offers offshore
incorporation information and consulting for offshore banking and trusts at
http://www.offshorecompany.com. For more information like this, visit
http://www.offshorecompany.com/banking/.
|
|
