We frequently hear about offshore bank accounts in the news or in the movies because those trying to hide money for criminal reasons usually utilize these accounts so that they are not caught up in their shenanigans. However, that is not all an offshore bank account is about. In fact, having an offshore bank account means saving tax dollars and some may have other reasons behind it. Just because someone has a bank account outside of the country doesn’t mean they are a robber or a member of the mob.
Nevertheless, there are some legal implications and some things that must be kept in mind. One of those things is the fact that it is not legal for a United States citizen to open an offshore bank account. Sure, you may be protecting your money from creditors or from high taxes, but you could get yourself into trouble. This is how some become convicted of tax evasion, but it is very possible that the long arm of the law will not reach your offshore account.
Another risk is the fact that your money doesn’t have the protection of the government. Your money is subject to the laws of the country that it is in. This means that a coup or some accounting scheme could occur that would cause you to lose all of your money. That is when you must ask yourself which country you want to open your offshore account in. Should you choose Switzerland, Bermuda, the Bahamas, or the Caymans? This can certainly be a difficult decision.
Best countries
First of all, you don’t have to be wealthy to have an offshore bank account. Second of all, you do not have to be present to open it and you do not have to visit the bank at any time during the life of the account. For example:
If you open an account in Switzerland, you can do it via e-mail or in person if you are in the country. Swiss bank accounts are quite secret and that is why so many choose them. They operate much like American banks and keep certain private matters such as divorce private. Switzerland does not change their laws under American pressure like some other countries do.
Opening an offshore account in Bermuda doesn’t require you to be present at the bank. The account can actually be opened by mail, along with proof of identity. Many of their banks are known for serving clients all over the world and this has made offshore banking in Bermuda quite popular.
The Bahamas are also known for their secrecy due to their privacy laws. This makes offshore banking in the Bahamas a huge business. They are also compliant with international laws with attractive incentives for their bankers.
The Caymans are also one of the best because of the similarity to a U.S. bank account. Then there is the possibility of keeping your identity a secret. The Caymans do not encourage tax evasion, but they do not report deposits in the accounts or interest gained from those deposits.
Being safe
Offshore banks do not report your income to the IRS like U.S. banks do, so they use an honor system. This means that it is up to you to report your income, but changing laws and other factors can cause issues if you do not comply with the laws of your own country. However, offshore accounts keep matters private and keep others from learning of your affairs. That is why such accounts are so popular amongst people all over the world.
World’s largest and most established independent investment firm that operates solely in tax-favourable jurisdictions including Bermuda, Grand Cayman, the Bahamas and London, UK. Offers offshore financial services such as offshore account openings. Wondering if you can apply for a QROPS, its seasoned market professionals will be glad to answer any questions related to offshore investments.
Your discussion was describing bank accounts and it got me to thinking about forex broker accounts in foreign countries. Do the same pros and cons apply? I’m guessing that their might be additional concerns that apply to brokerage accounts.
For example: I live in the US and I might feel that a bank crisis is looming. <wink wink> If I wanted to protect some of my assets by opening an account with a broker in Toronto or London, what would be the primary concerns?
be careful “hiding assets” is ILLEGAL!!! you could goto jail… im saying this coz i dnt want to see anybody get into trouble.
If you must do that sort of thing please at least form an international corporation and hire a lawyer and do things legally. It is very possible to dramatically lower your tax bracket legally.
Just ask Al Capone (i gotta ouija hehehhehe lol) tax evasion doesnt pay!!!
Personally I don’t feel safe opening even a forex account with a few thousand dollars outside of Canada or the US. That was one of my main criteria when selecting a broker. I don’t even trust opening an account in the UK, let alone the bahamas ;).
Unless your business is in illegal trafficing. Or you are under a international warrant it is illegal for Malta to release any banking information to foreign governments. They only tax you on income made in Malta. Down side 5k minimum account balance, it cost alot to wire money. Up side the give you a debit card thats good any where. How I know this irrelevent.
While opening up an off-shores bank account is easy, hiding the assets is difficult. All is well when your money stays in the bank, but you don’t hide money to keep it hidden, you’re going to want to spend it. That new boat you just bought with all of your tax savings… that gets registered to you, the down payment on the house mortgage… that’s in your name. When the IRS sees that you can afford a house/boat whatever have you, and see that you report little to no income [well let’s just say] it’s safe to assume that your lifestyle exceeds your income… Audit anyone? Thus why, with an off-shore bank account comes, off-shore trusts/foundations/corporations. You run the trust/foundation/corp and the entity that you operate owns the assets. It’s not illegal to pay yourself an annual salary of $1 per year, just ask the co-owners of Google. And since all money the trust/corporation makes is over-seas, you don’t have to worry about how you’ll justify writing off your gas expense for that big yacht
P.S. Consult a lawyer who has experience in off-shore trusts, the tax savings will more than cover attorney fees.
In my case, I have an offshore account at Blue Orange with a Hong Kong company and it has been blocked for security (AML). Do you know what I can do? Thank you very much.
If you are looking to open offshore bank account in some jurisdiction where you are not permanent resident, then you really need to consider few things like: reliability and stability of the jurisdiction, consider well capitalized banks, also your investment size is important.
I am big fan of Singapore because Singapore still one of the safe and best place to open an offshore bank account.
