Offshore accounts have been used by thousands of people from different parts of the world because of their importance in facilitating international business transactions and providing financial security for both corporate and personal investments.
Unfortunately in recent times, offshore accounts were exploited for laundering money gained from illicit financial activities. However, there are many people who open offshore accounts simply for the need of finding a way to save their money or protect their assets if they live in countries that are economically unstable. Saving one’s finances in an offshore account in a country which is developed or experiencing development affords the security of knowing that a person’s assets are protected from being seized at any moment and can increase its value over a length of time.
On the other side of the coin, businesses can equally share the benefits of offshore bank accounts. From a full range of corporate accounts by offshore banks in catering for business transactions that extend beyond the local level, offshore corporate and investment accounts do nothing more than facilitate international transactions. Offshore accounts gain from interest rates that are generally higher than those offered by onshore banks and help increase the value of the assets kept in the account. One of the main components of offshore accounts is internet banking, which gives full access to accounts on a 24 hour basis. Other modernized offshore banking facilities that enable offshore account owners to maintain contact with their offshore bank include mobile, telephone and personal intranet services which are used for giving instructions to the offshore bank and receiving regular updates on an account.
Offshore accounts are held in banks in the most remote parts of the world, most of which are subsidiaries of banking giants located in Europe and the US. Offshore bank accounts account for trillions of dollars that are kept in offshore banks in the Cayman Islands, Turks and Caicos, Austria, British Virgin Islands, Hong Kong, Switzerland, Latvia; and the list goes on. The popularity of some of these tax havens have even caused offshore accounts to be identified based on the where they are kept. Consequently, the brandings “Swiss account” and “Cayman account” have become widely used, often giving the impression that all offshore accounts are held in Switzerland and the Cayman Islands; which is not exactly the case.
While jurisdictions such as Switzerland and Cyprus have been historically known for their offshore activities and have gained respect in this regard, many other countries, as mentioned earlier, developed throughout the years as stable offshore financial centers. Some of these offshore centers include Latin American and Caribbean countries such as Panama, Belize, Bermuda and St. Vincent, as well as the British Dependencies of Jersey, Guernsey and Isle of Man, which despite having made signatories to the EU Savings Tax Directive in 2005, due to their political affiliation with the Crown, continue to provide first class offshore accounts and services.
Today, many offshore financial centers that offer offshore bank accounts can boast of stable and regulated offshore industries which are attributed to increased anti money laundering laws, revised offshore banking and services Acts, the formation of Financial Services Commissions as the regulatory authorities for ensuring that local, regional and international offshore laws and standards are adhered to.
Offshore accounts continue to play an important part in the transactions of people and offshore companies the world over. Corporate and current accounts serve as a medium for receiving and making payments, merchant accounts assist businesses by providing an offshore account that can be used for processing online payments, offshore investment accounts are used for trading stocks, bonds and futures, offshore checking accounts can be used for making payments without the use of cash or having to make withdrawals with bank cards, while offshore deposit accounts are useful for depositing funds temporarily, during which time a certain amount of interest is obtained.
The development of the offshore industry has also led to the creation of customized services that are offered alongside offshore accounts. Services such as investment management, trust formation services and insurance schemes are all geared towards enabling people and corporate entities to maximize their investments in an effective way that helps with securing a successful future. Such services assist in optimizing asset protection in order to see to it that provisions are made for unforeseen incidents and the necessary steps are taken for proper succession and tax planning.
Given the diversity of offshore banks and the standards that they set for opening accounts, the opening balances of offshore accounts may range from as much as several thousands of dollars to below one thousand. The banking laws regulating offshore accounts require offshore banks to meet basic offshore account opening standards such as bank references, verification of permanent address, authenticated passport copies of any new customer and certified copies of the memorandum of Articles, Certificate of Incorporation including a board resolution in the case where a company account is requested. These constitute the Know Your Client or KYC rules that must be respected and complied to by all offshore banks before an offshore account can be granted.
Although there are several offshore service providers offering offshore accounts in various offshore banks throughout the world, there are many easy online steps that can be followed for securing an offshore account. In all instances, however, ensuring that the service is being provided by a source that is efficient and legal should be priority.
The convenience and low costs that are currently involved in holding an offshore account have increased the accessibility of offshore banking, making it a convenient, accessible and valuable vehicle for financial activities.