Offshore Bank Accounts
An Offshore Bank Account is a banking account opened in another country or jurisdiction other than the one in which the particular person is a legal resident. It is mainly used by wealthy businessmen doing businesses overseas and by those who wish to conduct the financial transactions and other details in a private and confidential manner. As it is observed, the most preferred offshore banking location is Switzerland.
Creating an offshore bank account is quite an easy task as far as one meets the basic criteria or documental requirements put forward by the bank. It can be done even through a courier-post meaning that the prospective account holder's physical presence is not required in most cases, if the person chooses so. To make matters still easier, there are professional companies that help set up offshore bank account for businesses in different countries according to their offshore company formation and expansion plans.
The biggest advantage of offshore bank accounts is that it offers privacy and security. Also, since the accounts are accessible via Internet banking, the customer won't feel any difference as well. Further, the offshore bank account holders are extended every other banking facility by the bank, like in the case of a local customer, such as loans, credit card, and accessibility to the account through email, fax, telephone, and ATM.
Another factor that draws businesses to offshore banking is the tax benefits it offers. But, here it should be kept in mind that depositing large sums of money in offshore bank accounts does not exempt one from taxation laws of the country of residence. In fact, tax laws in most countries mandates that every offshore account holder may report their account and transaction details to the concerned authorities promptly, and failing to do so could invite charges that amount to purposeful tax evasion/illegal wealth accumulation.
Yet another positive of having an offshore bank account is the higher interest rates that are offered by many of the offshore banks, especially those in Switzerland. Further, if the offshore bank is located in a low tax jurisdiction, the accrued interests per month would only increase to the positive side even after deductions owning to taxation.
Having said these much about offshore bank accounts and its advantages, it should also be understood that it is not just meant for everybody, every common man on the streets. Offshore bank accounts work only for businessmen doing businesses or investments in that country or those who are super wealthy, who want to secure a large chunk of their money in safe deposits, and also to derive substantial tax benefits. For somebody who earns a few thousands of dollars a month can't draw any significant benefit by depositing their money in an offshore account. Also, the minimum money required for the initial deposit in order to start an offshore account is a tad higher that that of local banks.
More info on the intricacies and requirements for opening an offshore bank account could be obtained from consultancies working on offshore company formation and investments.