First of all let’s define what an offshore bank is. Broadly speaking the term “offshore banking” refers to all banking institutions available in jurisdictions other than the depositor’s home country, but a widespread common understanding of that is a banking institution located in a tax-haven jurisdiction.
Offshore banks operate on the same principles as any other bank in your home jurisdiction but frequently offer extra benefits.
Advantages of Offshore Bank Accounts
Most offshore bank account jurisdictions are politically and economically stable and have prudent, sound and reliable banking regulations, thus providing a depositor or investor with a number of benefits including but not limited to:
- substantial asset protection against pending lawsuits, extraordinary home tax burdens and results of ramifications of a local unstable government;
- increased privacy and confidentiality of banking; financial institutions in private jurisdictions do not report customer account information to any foreign governments, they leave it on the customer’s disposal;
- relaxation of restrictions with respect to the types of accounts available to depositors;
- banking in multiple currencies at reduced rates;
- substantial decrease in tax liability;
- lower bank fees and charges amounting to lower operational business costs;
- convenient internet-banking providing an instant access to account information and complete remote control allowing one to manage international transactions easily.
It is important to select a proper jurisdiction and a bank institution, which will be different for each particular scenario.
Which Offshore Bank Account is the Best One?
The answer comes down to many factors but finally you are the only one to decide since only you know what you need. Basic recommendations would be:
- to make sure first you are comfortable with the jurisdiction of the bank and that banks are well regulated in that jurisdiction;
- to outline the bank’s business goals and decide on if they correspond with yours, whether it’s an investment bank interested in you just depositing funds or it will serve your day-to-day business transactions in full;
- to ensure the bank is financially stable, if it has a well respected parent company and sufficient funds, or if you can count on any other protection against the bank going bankrupt;
- to examine bank products being offered and pick up the account with options that meet your criteria.
You may always ask for a solution from the bank manager but be prepared that his advice will be around that particular bank offers only.
If you need an independent advice speak to an international adviser on offshore services.