Peerfear.orgFear for no peers!
Offshore Banking Tips & Traps
While the entire industry suffers from a cloak and dagger type status, there are legitimate reasons for using offshore banking to an individual’s or company’s advantage.
Offshore banking, by its very definition, is a bank that is located outside the depositor’s country of residence. More times than not, this involves a country whose tax jurisdiction is more favorable than one home banks. There are also legal benefits and more importantly privacy not available at home. While the entire industry suffers from a cloak and dagger type status, there are legitimate reasons for using offshore banking, offshore trusts, and offshore corporations to an individual’s or company’s advantage. Most think of low profile millionaires whose road to wealth is somewhat questionable but consider the alternative. There are areas of the world where offshore banking is safer than the political climate of one’s homeland. Would you want to be a depositor in any Russian bank in the roaring 90’s? Maybe you are a wealthy sugarcane farmer in a third world country in the Mediterranean; would you trust your local currency to your state run bank? Also consider the ability of lower cost banks in other regions being able to offer better rates than available at your local bank, is it worth the risk? This is going to depend on you doing your homework. One downside is the typical offshore bank is remote, so access to information can be difficult. However, in an ever increasing telecommunications world this is becoming less of a problem. Another disadvantage is that offshore banking is usually reserved for higher incomes but this is also changing as these institutions begin to compete for depository currencies to boost their own local economies. In order to increase their relevancy, most offshore banks offer the same roster of services one might find at their local branch: Deposits Credit Wire Transfers Letters of Credit Fund Management Trust Services Private Banking Wealth Management Corporate Admin Since Most banks tend to lean towards private or retail banking, some or all of these services may not be available at your chosen bank. You will want to seek out a bank that can provide most of these services as they will no doubt intermingle. You can legally find the best tax advantages for you, your family, and your company if you set it up right from the beginning.