Offshore Account - is it Legal?

An offshore account is as perfectly legal as any other account held in any domestic financial establishment. Wondering whether or not offshore accounts are legal should be clarified by the basic fact that offshore banks, in which offshore accounts are held, are legally sound and internationally regulated financial institutions.

Clawing back on illicit financial activities was boldly undertaken and combated by international organizations such as the Paris based Organisation for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF), which comprise of several countries. Both these organizations, among others, were actively involved in taking measures against jurisdictions that were considered uncooperative in implementing international offshore policies and rules. This encouraged the formation of regulatory agencies such as Financial Services Commissions (FSC) and the enactment of several anti-money laundering laws and anti-financial terrorist measures that provided a juridical and standardized framework for offshore industries all over the world.

These actions further enhanced the quality of offshore services provided by offshore financial centers, while strengthening offshore banking institutions, which also established and implemented a series of policies involving client identification and the documentation and declaration of source of funds from offshore bank account holders. Additionally, offshore banks can only exist in a jurisdiction where laws for offshore banking have been passed. Any financial institution that gets involved in providing offshore services without the existence of such laws in a given country or without being granted the license that legally enables it to offer financial services, will be guilty of committing a serious offence against the law. Offshore laws require offshore companies, similar to Seychelles company, to engage only in legal commercial activities since offshore accounts attempted to be held in the name of an offshore entity with an unacceptable source funds is liable to face severe legal penalties.

Offshore banking continues to play a vital role in international business by facilitating both local and foreign investors, expatriates, persons who travel frequently or are involved in trading, shipping and the manufacture of goods which implicate dealing with customers, trading partners and doing transactions on an international level. Offshore accounts are thus a legal means of doing such business with the use of an offshore financial institution that is capable of accommodation and facilitating demanding commercial transactions and activities.

Holding an offshore account is surely a safe and legal way of saving and investing one’s assets. Offshore banks would not continue to openly exist if the services provided were illegal, and in reality, they are not. Offshore laws may vary from one jurisdiction to another, but legal offshore banking and offshore account opening procedures are standard throughout and must be maintained by all offshore financial centers.


Back to top