Offshore Bank Accounts | Best Way to Protect Your Wealth
Offshore bank accounts: What is an offshore account, benefits, advantages, setting up
Offshore bank accounts offer various benefits to investors who want to protect their assets and wealth from political interference.
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Offshore bank accounts: What is an offshore account?
It is worth remembering that management of more than half the world’s wealth is held globally via offshore companies, if not necessarily in offshore banks!
Offshore accounts are simply accounts held in banks located in tax havens such as Seychelles, Mauritius, British Virgin Islands or Dubai or Ras Al Khaimah [RAK] in the United Arab Emirates [UAE] or others in the Cayman Islands.
What are the benefits
Banking regulations are simpler and flexible, allowing more products, and lower costs of offering them to customers. So you end up with a choice of products not necessarily available to you in your own country of residence.
Your income in the offshore account also is not taxed in foreign offshore accounts so it grows faster than if it were in a commercial checking account in your country of national origin.
Investments offered in the currencies market segment of the financial market are some of the most common investments available offshore.
These have short maturity dates and to find out more about offshore accounts that suit your needs you can consult a financial planner for remote offshore banking security advice.
Offshore destinations are tax havens where taxes are low or nil, and as such, you can grow your savings at a faster-compounded rate.
You can invest funds via a company incorporated in an offshore tax haven by yourself or with a group of investors or by establishing a mutual fund that is registered in a tax haven – which will offer greater tax-free returns.
You can even start an offshore company and make it your holding company to invest in your operating companies in other countries. This is worth investigating.
- It offers privacy and stability and helps increase savings
- Individuals who have offshore bank accounts don’t access it often; rather they spend money from their accounts in a local state bank
- Offshore deposits are kept for future or emergency uses and as such these accumulate considerably over a period of time and you can transfer them as needed
- Offshore banks may also be advantageous for those countries whose economy is unstable. There is a fear for investors that they cannot get back their investment if their economy is trembling. But having an offshore bank account somewhat assures investors that their assets are well protected and not at risk
- Having an offshore bank accounts means that there is a limit to government intervention. The government may not be able to interfere with all the bank accounts of their people outside their country. Because of this, offshore banks may offer higher interest rates for your deposits thus making it more beneficial for investors with an offshore bank account
- Offshore banks also offer some banking services which may not be available from your home country’s banking institutions like bank accounts that are opened via nominees
- One more advantage of offshore banking is that anyone irrespective of wealth can open an account. There may be certain regulations regarding the amount of money required to open an offshore account but contrary to popular belief it is generally not a massive sum. US$ 100,000 is the minimum average balance in Dubai
Along with wealthy clients, even a small business owner or a middle-class individual can have offshore bank accounts. In this way, you can do business and earn money and also save on profits since the tax system in offshore destinations is investor friendly.
You not only save tax with an offshore banking account but also get many more benefits that strengthen your finances. You get asset protection benefits, personal privacy advantages and access to better account structures and services without penalty.
So why it is that offshore investments are treated as ‘shady’ or ‘quasi-legal’? Most tax authorities would like you to tell them about your offshore accounts, and also would like that you pay taxes on those assets to them.
However, most offshore investors and offshore account holders want to escape the clutches of their local tax departments through tax shelters such as offshore companies, double tax treaties, or through hiding and not sharing information on overseas assets.
In many countries, it is necessary to inform your relevant tax authorities before placing your assets offshore and if you fail to do so, then your investment can be illegal technically.
What do you need to do first to set up an offshore account?
So before making any decision on investments offshore, you should take offshore banking advice from qualified financial consultants in your tax jurisdiction.
Offshore account structures are very flexible and accessible, pay better interest, have lower charges and multiple currency exchange transaction facility terms.
With all these advantages, investing offshore is a wise step to take. But there are certain factors that need careful consideration before you make the decision.
In the traditional tax havens, offshore accounts are expensive with high minimum balances and high transaction costs. Even the incorporation service providers charge high fees in these tax havens.
However, the newer ones, such as UAE, Mauritius or Seychelles are quick, less pretentious, and cost around US$ 3000 for company incorporation and bank account opening!
Are you looking for more information on opening an account in an offshore haven, or retiring early because of savings offshore? Or are you an expat looking for ways to build your private wealth?
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