What Is An Offshore Bank Account?
An offshore bank account is a bank account that is open outside the country of residency. It is a simple non-resident bank account. Although this is quite simple to understand the term “offshore” is often connected to something shady and mysterious. But it is nothing like that.
Is it legal to have an offshore bank account?
Absolutely! Although there have been many affairs with foreign accounts offshore and money laundering, one can simply hold a non-resident bank account for completely legitimate reasons.
Why open a non-resident bank account at all?
There are many reasons but let’s take a look at the most common ones:
Privacy. Some banks by default have strong banking secrecy, which is completely different from tax evasion. Some of those countries are Hong Kong, USA, Luxembourg, Lichtenstein, Monaco, Panama and others… But banking secrecy is not the only reason to seek privacy… An offshore bank account is a good tool to protect yourself from the eyes of the curious ones (not tax authorities!)
Diversification. God forbid, but it can happen that you suddenly find yourself living in a country with the strong inflation or unstable currency. In the 90s that is exactly what happened to the well known and famous Yugoslavia that had the most expensive passport in the world just a decade before! IN the morning you could buy groceries with the money and the very next day that same money was worth peanuts, due to inflation. So a healthy scepticism towards good times and good time planning are essential to protect your assets. Having several bank accounts in different jurisdictions does bring one, if not total, then a partial peace of mind. It is also a means to seek for financial and economic stability.
Asset protection. GOod asset protection can be achieved only with good structuring. A legal way to do this is to properly diversify your assets by protecting from economical and political instability. Just having an offshore bank account is not a tool to protect their assets as taxes are primarily related to your country if residency and local laws.
How can one open an offshore bank account?
First and most important, you need to understand why you need such a bank account and understand how you can benefit from it. Not all banks offer non-resident banking in reality. As a matter of fact, very few do.
The good thing is that those banks that can open non-resident accounts will very often do this remotely. This is particularly important in the time of restricted travel.
It is great to figure out a list of banks and understand what service they can offer to you or your company. You need to plan ahead and notify the future bank how you plan to use the account. Banks love all the information presented to the ahead, documents and forms filled out properly and overall applications with the “cherry on top”. This is something that Findove knows well.
BUt first things come first and those are the needs of a future client. So ask yourself: What does this bank have that I cannot get with my home bank? Do they have online banking? Do I need debit cards? What currencies can they provide? Do they support transactions from this or that jurisdiction? With all that being said and clarified the time is to prepare the documents and application.
Offshore banks require certain documents, your personal information, such as your name, date of birth, address, citizenship, and occupation. After the set of documents is ready, you can apply with the bank and hope for the best.
As always, it is best to make the right strategy and choose wisely, not just apply it randomly. Keep your risks low and your banking standards high. It is not an easy task but it is possible!