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Archive for the ‘Offshore Banking’ Category

It was not so long ago that to open an account with a European private bank, you had to be very wealthy. First of all you had to invest a hefty minimum opening deposit, then you had to meet the minimum balance requirements on an ongoing basis, and finally you had to afford the banking fees for an offshore bank account. Traditional private bankers took the attitude “if you have to ask about the fees, you can’t afford them” and set their tariffs accordingly.

Fortunately, things have changed. Private offshore banking is more accessible than ever. After dramatic changes in international banking, brought about by the internet, these days you can open a relatively modest offshore account, as your quick, inexpensive entry into the world of foreign investments. Although some nations, like Switzerland, may ask for high minimum deposits, others are relatively low.

An offshore bank account in a carefully selected jurisdiction provides several layers of asset protection, as well as access to a wider range of better investment opportunities. An offshore bank account also protects your assets from lawyers or even determined creditors who want to attack your assets (in most offshore jurisdictions, they won’t get past the local courts).

Better Investments, Less Taxes

Your money will be safer offshore, but another of the big advantages of an offshore account is your power to roam the world markets electronically, trading freely, and invest in an internationally-diversified portfolio of stocks, bonds, mutual funds, precious metals and forex. You can achieve this diversification with instant access to the world’s best investments without being burdened by local laws. You can buy attractive life insurance and annuity products that may be unavailable in your home country. And of course tax savings may well be the net result of your deferred investment earnings, capital gains or appreciation, so you will be receiving lower taxable ordinary income while making more money!

Choosing the right jurisdiction for your offshore bank account is perhaps the most important step makes all these investment opportunities possible. Here’s a quick look at three jurisdictions where you can secure an affordable offshore account for asset protection and legal tax avoidance purposes.

Andorra: Constitutionally Guaranteed Privacy

Formalizing a tradition and way of life, Andorrans finally wrote bank privacy laws right into their constitution in 1983. According to the constitution, bankers are forbidden to divulge your financial information to anyone.

“Andorran banking involves two way communication-bank/client, client/bank-that’s it!” says a top Andorran banker.

Andorrans have so far managed to hold onto their bank privacy even under attack from the European Union. With Andorran bank secrecy protected by constitutional rank, the EU can try to persuade Andorrans to change their policies, but the Andorrans still have the final say.

As far as safety goes, no Andorran bank has failed – ever! In the unlikely event that your Andorran bank did ever fail, the other Andorran banks would be obliged to step in and take over the debts of the failed bank.

Denmark: Twin-Digit Investment Opportunities

The Kingdom of Denmark may not be the most obvious place for offshore banking. Denmark’s second largest bank, Jyske Bank, is internationally recognized for their acclaimed investments and the management of those investments. Just this spring, Global Investor magazine named Jyske Bank the best performing European Equity Fund Manager in Europe.

However, be warned: Denmark doesn’t offer the same level of banking privacy as Austria or Switzerland because there simply is no bank secrecy law in Denmark. And at the end of each year, under the EU savings tax directive, all Danish banks must turn over clients’ information to the Danish tax office, which is free to share that data with foreign tax authorities.

Liechtenstein: Iron-clad Asset Protection Opportunities with Entrepreneurial Flexibility

Liechtenstein, a tiny independent principality nestled between Switzerland and Austria, is a fully-fledged banking haven . In Liechtenstein, the national currency is the Swiss Franc. Liechtenstein has a reputation of having even more watertight bank secrecy than Switzerland. Bank secrecy may only be lifted by a local court order and Liechtenstein rarely recognizes other countries’ requests. The Liechtenstein government, the Prince personally, also insures all bank accounts-no matter how large.

Nonetheless, this level of sophisticated asset protection has a price. Liechtenstein’s banks have no official minimum, but they try to attract high net-worth individuals-and banking fees are high.

The bottom line is that, even given higher fees, banking offshore can definitely pay off handsomely. (sometimes in double-digit returns). You can choose to bank in regions where your bankers are bound by law to keep your assets safe and where personal privacy is still something to be respected. In fact, it’s possible to maintain a level of complete financial privacy where no one can even find your assets, let alone grab them. Plus, you can keep your wealth in a multi-currency account to protect yourself should your home country’s currency ever devalue. It’s my view that everyone should have some money offshore – outside their home country’s financial system that is. A safe haven so as to speak. You never know when you might need it…

I’ve dealt with hundreds of clients wishing to open offshore bank accounts over the years, and every one has a different motivation. Reasons for opening foreign bank accounts are numerous. Sometimes, asset protection may not even have a tax motive, although frequently both are related. It’s just safer to be offshore!

Strict banking secrecy regulations, supported by stiff criminal penalties for those who might breach them, blanket confidentiality provisions for trust and company management firms, and minimum information on public files such as intrusive credit bureaus are only some of the reasons why your assets might be better protected offshore than onshore.

Credit bureaus, in particular, have become nothing short of a scourge on society. While they certainly serve a useful role in society by allowing people to qualify for credit if they want to, there is simply no option to opt out of them even if you are not interested in borrowing money. Despite unenforceable laws to the contrary, this means that basically anyone with internet access can check your bank balance at any time. Unless, of course, you only use offshore accounts – which never report to anybody.

Your Offshore Safe Haven Account

A lot of offshore investments used to originate in countries where political turmoil and civil strife threatened the wealth of productive people. For example, Miami became a major regional financial centre because it offered the security, safety and stability of the United States of America to businessmen and wealthy families from Latin America at a time when the region was characterised by devaluations, thefts and ruthless military dictatorships.

Today, however, the tables are turned and we see many Americans (besides those same wealthy Latin Americans) seeking a safe haven for their money outside the US, as they see the economy imploding and the dollar fast losing its value.

Smart money doesn’t want to depend on the economy of just one country or indeed one currency, and small offshore havens – neutral countries with very conservative economies – offer the necessary safety and security. No Swiss bank has collapsed in centuries, whereas this year we have seen bank collapses in the USA, not to mention the Savings and Loan crisis which is still fresh in many minds. We’re not saying that you will lose money in major western banks today either, but not-so-subtle hints like the sub-prime crisis, the Northern Rock and Bradford and Bingley problems in the UK, and the Societe Generale scandal in France, do suggest that we should be looking to invest at least part of our portfolios in small, neutral places which don’t have such a high level of exposure to risky practices.

Offshore Expertise

In a global economy, you need global expertise. Where do you find it? In countries that rely on international business for their livelihoods. Would you prefer to buy a watch made in Australia, the US or Switzerland? You would probably go for the Swiss because of their worldwide reputation for “superlative” quality (to coin a phrase from Rolex).

Well, banking services are the same. Switzerland and London are much more international in their outlook than New York or Paris. The service is simply better and more sophisticated.

Most offshore banks focus their non-resident services in just one or two offices where their best people are put to work as a team. This is in contrast to retail or onshore banks who try to serve clients through hundreds or thousands of branches, and call centres in India or the Philippines. Of course they will give you advice (in return for commissions) but you cannot expect anything like the same level of expertise.

Can you imagine a banker in Philadelphia who is qualified to advise you on how you can gear your returns by taking a loan in Japanese Yen then investing the loan proceeds in Mexican Peso bonds for a higher return? There might be a few, but don’t hold your breath. But this kind of expertise is routinely found in offshore private banks.

Offshore Access

You may not have realised this, but if you live in a country like the USA or UK many of the most attractive investments in the world are off-limits to you because of regulatory requirements. We’re not talking about dodgy “high yield prime bank off balance sheet trading schemes” here. We are talking about mutual funds run by the investment banking divisions of big American or British banks, or smaller niche funds that allow smaller investors to participate in hugely successful investments such as Warren Buffet’s Berkshire Hathaway.

Complicated regulatory approval procedures and complying with legislation such as Sarbanes-Oxley make it unattractive for many foreign businesses to do business with Americans and Brits. Foreign banks dealing with Americans must either sign up for “qualified intermediary” status with the US authorities (which means co-operating on information exchange) – or their clients must suffer punitive withholding taxes. There is plenty of smart money already floating around offshore, and it’s easier for many banks simply to reserve their best investments for sophisticated offshore clients, while preparing other funds for their domestic markets.

The UK is another case in point. The UK’s infamous “Money Laundering Regulations 2007″ have driven a lot of expat and non-resident trust business offshore. London used to be a major international financial center for the offshore world, a safe haven where wealthy foreigners knew they could rely on English common law to protect the confidentiality of their business transactions. Under the 2007 rules, however, businesses such as company formation agents, trust providers and even accommodation addresses (maildrops) are required to keep confidential information on their clients available for inspection any time – no need for warrant or even just cause – by inspectors of Her Majesty’s Revenue and Customs. Due process has become a thing of the past.

The good news is that even today, it is quite simple to change the country of origin of your funds. How? By using an offshore company or trust. This makes your funds let’s say Panamanian, then any international bank will be able accept your funds without regulatory problems. We’ll look at this in more detail a little later in this report.

Is it Legal?

Aren’t all offshore havens used by crooks and money-launderers?

Well, aren’t London, New York or Miami banks used by them, too? Offshore tax havens have for decades been the target of blackmail and slander campaigns by the governments of the powerful high-tax jurisdictions. Your government would most assuredly like you to believe that offshore tax havens are only used by fraudsters and criminals – but that’s completely unjustified.

While there will be a rotten apple in any basket (especially if the basket is big enough), 99% of all business transacted through offshore companies is completely legitimate. In fact, due to the inherent need to keep their reputations squeaky clean, most of the leading tax haven countries nowadays have much better systems to detect and prevent financial crime and money-laundering than the big, powerful nations who criticise them.

One of the best things the individual investor can do is start looking for ways of making money with offshore banking. Offshore banking gives you an opportunity to gain independence from your domestic country and allows you the ability to tap into the global market. The broad capacity of global market opportunities means greater chances to find wealth. Many developing countries are eagerly searching for investment dollars and offer great rates of returns for your money. By using an offshore bank as a vehicle, you can take advantage of these situations ranging from ways to protect your assets through asset protection trusts to ways to earn more money through offshore mutual funds or an offshore forex account to name a couple. However, these are just a few ways of making money with offshore banking. Here, are a few others that are very popular with investors:

A wealth of investment options:

Making money with offshore banking can be very easy when you consider the wide variety of investment options that are available to you once you use an offshore bank account. By opening an offshore bank account you are no longer handicapped by the rules and regulations of your home country with the exception of its tax laws. What this essentially means is that you are now free to invest in other countries’ companies, stocks, bonds, offshore mutual funds, currency through an offshore forex account and other investments. In addition, you can asset protection trusts to help shield your profits from creditors. The result is that not only do you have the opportunity to help diversify your existing portfolio, but you also have the luxury of taking advantage of hiccups in the market or other trends. These can be great ways to make money quickly and easily.

Tax avoidance:

Another benefit for many people on how they are making money with offshore banking is through playing defense of their money. Many offshore banks require little to no taxes on your money, but also offer you better timing options for when to file your returns. In time delays can translate in you getting benefits of time value of money to simply make more during this float time. Although most investors will be unable to avoid income taxes for these accounts, they are often able to get better timetables when the taxes are paid. Plus, there are some offshore trusts that can help shield your money from other taxes like the estate tax.

Higher returns potential:

Since offshore banks do not have the same level of regulations as domestic banks, this means they can operate at a much lower rate. This lower cost of doing business usually leads to higher returns turned over to its investors because the banks want to encourage more foreign investment. This is great news for any individual investors looking to make higher returns than they can at home.

By keeping ideas like these in mind, it is easy to see how so many are making money with offshore banking. If you haven’t thought of using an offshore bank account in the past, we strongly recommend you look into them further. Whether you are looking to protect your money through asset protection trusts or looking to make money through various options like offshore mutual funds or an offshore forex account, you will find a wider array of options in offshore banks.

The world is changing and it is changing fast. Who would have thought that small Asian economies would be leading the way out of the worst recession in seventy-five years? Who would have thought that a country like Peru would be buying dollars to alter the exchange rate and help prop up the dollar? It is a brand new world where perhaps the best place to set up a banking operation is in New Zealand although an NZOFC cannot be called a bank! Still, a tried and true solution to offshore asset management such as a Panama Private Interest Foundation remains as a profitable and secure offshore solution along with offshore banking, and opening a Forex company.

More and more people are moving their assets, their talents, and themselves out of their nations of origin and into a busy, industrious, and profitable offshore world. The very wealthy have banked in tax advantaged jurisdictions for years. They have taken still take advantage of offshore asset protection and privacy vehicles such as trusts, international corporations, and foundations to shield their wealth from prying eyes and reduce the tax consequence of inheritance. However, it is the surge of expatriates from all over the globe moving and doing business all over the globe that opens the doors to profitable offshore investment opportunities.

Three profitable offshore opportunities are starting a bank, forming an offshore Forex company, and using a Panama Private Interest Foundation as a holder of tangible assets, businesses, and bank accounts. There are many opportunities in today’s fast moving world. We choose these three for their combination of opportunity and security.

Offshore Banking in the 21st Century: an NZOFC

There are many offshore banking jurisdictions. There are also a number of jurisdictions where an individual or corporation can obtain licensing and set up business offering banking services. In choosing a jurisdiction for offering offshore banking services the individual or corporation will want to search out a democratic, politically and economically stable, business friendly country. A nation where English, still the universal language, is spoken is a plus. The nation will need to have at least adequate infrastructure to support the business and ideally will have first rate telecommunications, transportation, and support services.

A nation that offers a first rate offshore banking opportunity and also fits the necessary criteria for a successful offshore operation is New Zealand. This former British Crown Colony is located in the Southwest Pacific to the East of Australia. Its population is mostly descended from British immigrants and is mostly English speaking. The country is well governed with little or no corruption and its educational standards are as good as or better than the USA, Canada, and Great Britain. This is a business friendly country known for its innovative spirit.

Of our three profitable offshore opportunities we put the New Zealand Offshore Financial Company (NZOFC) at the top of the list. This type of company is not governed by New Zealand banking law nor regulated by the Federal Reserve Bank of New Zealand. There are no capital reserve requirements in setting up an NZOFC. The law in New Zealand is quite specific in that an NZOFC cannot be called a bank or intimated to be a bank. However, such a company can take deposits from anywhere in the world outside of New Zealand. It can pay interests, make loans, market investments, manage trusts, and provide virtually all services that a bank might offer. Anyone from any country is free to apply for a license to operate an NZOFC.

A Profitable Foreign Exchange Opportunity

So, the Chinese are trading the Yuan versus the Malaysian Ringgit. The Euro is periodically in free fall as Greece and the other PIIGS reveal more sovereign debt. A flight to quality sends folks out buying Yen, US dollars, and Swiss francs. So, how do you trade foreign exchange in this hectic and uncertain world of international finance? There is certainly money to be made in Forex trading. There is, however, steady money to be made in running a Forex brokerage offshore.

There are a number of jurisdictions still where it is possible to obtain a Forex license. Because of the variable degrees of infrastructure development, business friendliness, and political stability in some offshore jurisdictions it is wise to consult someone with experience to help choose a jurisdiction, obtain licensure, and initiate operations. There are a number good places from which to do business, depending up individual preference. There are also a few disadvantageous jurisdictions to be avoided. Starting out with good advice in this arena is wise.

The point of setting of a Forex company is that the fees and commissions are steady income. While trading can be profitable it can also be a drain on capital. This is the old argument about selling picks and shovels when everyone else is prospecting for gold.

Handling Offshore Opportunity in the Most Advantageous Manner

The third offshore opportunity we mention is the Panama Private Interest Foundation. This is not directly a business opportunity but it can be a “holder” of businesses, bank accounts, and assets such as art work, yachts, airplanes, jewelry, and more. A Panama Private Interest Foundation has no owner. It does have beneficiaries. Such an entity is often used in place of a trust to pass on inheritance with minimal tax consequences. The foundation is set up in such a way and with instructions so that beneficiaries change when the first beneficiary dies. Especially for those with concerns about asset privacy and security this type of foundation will allow for individuals to benefit from assets, businesses, and bank accounts without having their personal names or other details in any public registry.

A common use of a Panama Private Interest Foundation is in an integrated offshore asset protection solution containing offshore businesses, bank accounts, and other assets. Typically the foundation is the lynch pin in this solution as the holder of assets for the use and benefit of designated persons, the beneficiaries.

These three profitable offshore opportunities are available to anyone interested in pursuing them. It only takes an email or phone call to an experienced individual or company to get the ball rolling.

Offshore banking is a great way to keep your money secure and a lot of people use a service like this for their assets. Most of the time, these services offer higher interest and lower fees which is why they are so popular. A bank account like this is entirely legal and is a great way to secure your assets.

A lot of people are trying to find ways to earn more interest and cut down on the cost of banking and opening an offshore bank account is a great way to do this. There are lots of options available so finding what you need in terms of services shouldn’t be hard.

You can find offshore banking services in a variety of places and quite a few high street banks offer an international banking service. It really depends on what sort of services you’re looking for though. You’ll have to consider a few things because you open any accounts.

Offshore banking is an old term used to describe any banking facility that is not based in your resident country. A lot of people use them and you’ll have probably heard about them from films and TV shows. The Swiss Bank Account is regularly mentioned in thrillers and action movies.

Most people imagine an offshore bank account as being based on an island somewhere in the caribbean. On the contrary, there are some banks that are actually based inland such as the ones in Switzerland. Offshore banking does have it’s benefits but it also has some bad points.

The benefits are that your money is usually more secure in an offshore account. You will also find that the services available are much better than those offered by high street banks. For example, interest rates are higher, fees are lower and usually you can have your own personal banking advisor.

However, there are a few negatives as well – sometimes you may not be comfortable having your money situated in a different country. This can sometimes cause worry and stress, although it really depends on how you feel personally.

Another things that people don’t often realise is that although it’s a well known fact that interest rates are higher at offshore banking facilities, you will still have to pay tax on your assets. Many people think otherwise and end up having a bit of disappointing bank statement.

However, the positive points, by far outweigh the negative points when it comes to offshore banking. The options available are more personalised than options offered at high street banks and this is probably one of the main reasons why they are so popular.

You can find out quite a bit of information about this sort of banking by having a good look around on the internet. Make sure you do a lot of research before you open an account anywhere. There are probably a few reviews available on the net as well which will give you a good idea of whether the services offered at a specific bank are worthwhile.

Many entrepreneurs and individuals have heard about offshore banking, but are unsure about the benefits, the legal implications and even what it is exactly. By gaining a better understanding of what offshore banking really is entrepreneurs can decide whether it is relevant to their company, and to what extent it can benefit them.

Technically speaking, an offshore bank is simply a bank in a jurisdiction other than the one in which the client resides. A person living in France who has a bank account in the US technically has an ‘offshore bank account’. However, the term offshore banking is more commonly used in reference to offshore banking in jurisdictions that provide tax benefits to the client. For example, living in France and having an offshore bank account in Panama, a jurisdiction often perceived as being a tax-haven.

By opening a corporate account in an offshore bank, entrepreneurs can benefit from favourable interest rates as interest received is typically tax-exempt. Furthermore, offshore bank accounts can be structured for multiple currencies so that entrepreneurs can avoid paying foreign exchange commissions on money transfers, and reduce their company’s exchange rate risk. Overall, having an offshore account presents many logical and attractive benefits for entrepreneurs and their business.

It should be noted that offshore banking can sometimes be perceived as tax evasion, and as a result many countries that provide competitive tax benefits also make double tax agreements with other nations, whereby account-holder information and tax information is exchanged in order to identify tax evaders. The Organization for Economic Co-operation and Development (OECD) has also created strict guidelines in order to monitor and reduce the abuse of tax systems, such as the Savings Tax Directive.

It is, therefore, important to recognize that offshore banking can only be secure, confidential and legitimate when the account location is properly researched in light of the company involved. Professional services and consultancy firms exist to assist companies with the decision making and procedures involved, to ensure that the company can make use of tax-efficient international transactions without defying the law.

When determining where to locate a corporate offshore account, various factors need to be taken into consideration. Firstly, offshore banking jurisdictions are often in remote locations with poorly-developed communications technologies, which can complicate banking queries or issues and even impede on bank/client relations.

Furthermore, since the September 11 terrorist attacks, offshore banking is sometimes associated with terrorist group and criminal money laundering. That being said, various offshore banking locations, such as Singapore and Hong Kong, remain reliable and are highly respected in the business world.

Offshore banking in Singapore and Hong Kong not only offers significant tax benefits when appropriately structured, but typically provides excellent internet banking technologies that are secure, user-friendly and highly efficient. While Singapore and Hong Kong provide such benefits, their jurisdictions are not regarded as tax havens and are approved by the OECD despite having strict client confidentiality laws.

Important recent developments on the policies and laws related to offshore banking and tax evasion are:

1. The Isle of Man’s efforts to impose further Tax Information Exchange Agreements (TIEAs) and Double Taxation Agreements (DTAs).
2. A Bill being considered in the US that would tighten existing laws for offshore companies, increase transparency requirements and impose severe tax evasion fines.
3. Switzerland’s recent efforts to co-operate with OECD requirements by signing its 11th TIEA and revealing previously secure client confidentiality details.
4. The G20′s decision to enforce OECD guidelines and work together to penalize tax evaders.

That being said, these laws apply to individuals and corporations who abuse overseas tax benefits. It is still possible to plan efficient tax procedures in offshore bank accounts within legal boundaries, however advice and assistance from knowledgeable individuals is recommended in order to avoid unintended tax evasion.

Locations to consider for offshore banking include Singapore, Hong Kong, Cyprus, Dubai, and UAE.