Offshore banking is neither illegal nor immoral. Yet, it has become a toxic term, vilified in the press due to association with tax evasion, money laundering and organised crime. Moreover, in 2016, top economists from around the globe put their names to a letter that called for an end to “tax havens”.
But this begs the question – what do people really know about offshore banking?
What is offshore banking?
Simply put, offshore banking is banking done in a country other than the one you reside in. It doesn’t mean hiding your money, it doesn’t mean tax evasion, and it doesn’t mean fraud. It’s perfectly legal and comes with a long list of advantages, depending on your financial situation.
What is a tax haven, and is it legal?
One of the many advantages that offshore banking offers, is that certain jurisdictions provide minimal tax liability for foreign individuals. These jurisdictions are also known as “tax havens”, and popular examples include The British Virgin Islands, Panama and The Bahamas. This is where offshore baking and tax evasion become synonymous with each other.
However, if you are an expat, or you hold a passport of the country that hosts your offshore bank account, and all taxable income is properly declared, the use of your offshore bank account is perfectly legal. Also, if you own property or run a business in a tax haven, and you’re transparent with your income, then your actions are entirely in line with the law.
What are the benefits of offshore banking?
There are more reasons to hold an offshore bank account other than tax benefits. For example, most offshore accounts allow for multi-currency banking. If you have international financial obligations, transferring between currencies is fast, convenient and usually at a more competitive rate than regular banking services. Furthermore, the beauty of modern banking is that you can manage and access your account from anywhere in the world with ease.
Offshore bank accounts are also considered a secure solution for managing your money well. They offer asset protection against financial threats, such as divorce lawyers or creditors, and some jurisdictions also offer financial privacy and confidentially agreements. This ensures that your personal or company information will not be passed onto third parties, which is vital if you want to invest in a second business without your competitors finding out.
What is the future of offshore banking?
While banking offshore isn’t for everyone, many offshore banks are changing their offering to compete and make banking overseas even more accessible. From branchless banking with better interest rates to accepting crypto as a form of currency, offshore banking is no longer only for the super-rich.
Happy to help
At Turner Little, we work closely with offshore banks to provide you with a quality service tailored to your needs. We will assist you with your enquiries, no matter how complex, and help you set up an account with internet banking, card facilities and the ability to transact internationally.
Get in touch with a member of our trusted team today and see how offshore banking could work for you.