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You are making use of offshore banking if you are using the services of a bank that is present in a different jurisdiction or country than where you live? The primary advantage of offshore banking is getting savings on tax; In addition, the depositor also gets more secrecy and risk cover. The word offshore originates from the habits of the UK inhabitants to start an account in the banks located in the Isles of the British Channels. The word becomes accepted as part of the English Language vocabulary to define all form of banking transactions that were done this way. The islands became hot favorites for all countries to start banking with them due to the tax advantages and their regulations.

It is true that offshore banking attracts less rules and regulations than inland banks since their governments have more lenient policies. There are more ways to open accounts in offshore banking and more ways to manage them. Each day we live, there are 2 trillion dollars passed around the world into offshore bank accounts. Phew! There were very few offshore banks until a few years ago and even those were thought to be for covering up for drug money and other criminal acts, today, it's a wholly different picture.

When you are banking offshore, you will get the same range of services that you get with your domestic bank. Both savings and checking accounts can be operated with a personal or corporate account. You can also make use of the host of other features they provide such as ATM cards, debit cards, credit cards (all internationally accepted) and avail of loans and mortgages and money transfers. Using just numbers instead of names, you can get better anonymity from these accounts.

Some offshore bank accounts will provide features for custody and wealth management. Other features that are provided include trustee and corporate administration services, fund management and foreign exchange. It is not necessary that all features will be present with all offshore banks because the banks can be aimed at commercial banking or personal banking. A retail bank has more standardized services and they are more cost-effective than private banks. If you are looking for personalized services, then personalized banking is better for you, but you must be ready to spend more for such an account.

Since offshore banks are not obliged to divulge any kind of information - personal or business - one of the best advantages of having such an account is privacy. Only if there is evidence that you have been involved in some illegal activity will your details be passed on to governments or to tax organizations. That means if they are unaware about it, they cannot get at your offshore banking account.

Your money grows tax free because these offshore banks are located in regions that are called as tax havens. Saving on tax is very important as a benefit when you are into offshore banking. But the savings cannot be termed as total because when you are bringing the money into your country, you may be liable to several forms of taxation. Offshore banking brings another benefit, which is termed as asset protection. The risks of becoming a victim of invasive bureaucracy, seizure of assets and lawsuits are much reduced when you manage your assets through offshore accounts.

By: Dumo Maseko


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