Many who are not accustomed with offshore banking find it to be an alien and exotic concept. There are many misconceptions and negative connotations, mostly due to the shocking headlines about using offshore banking for money laundering and tax evasion. What many don’t realise is that having an offshore bank account is quite normal, legal and safe, and offers numerous practical advantages. Here we will take a closer look at what exactly offshore banking is, and why it is so vital to have one.

So what exactly is offshore banking? Offshore banking is simply a term used to refer to the use of banking services in a foreign jurisdiction outside of the country where one resides. So any individual who owns a bank account in a foreign country outside of their country of residence is engaging in offshore banking.

In the past, there were typically only a small number of jurisdictions which offered offshore banking services, and many still associate offshore banking with these few countries to this day. However, nowadays, one can open an offshore bank account almost anywhere That being said, there are still certain jurisdictions which are more renowned for their use and which offer greater benefits compared to others. The choice of where to open an offshore account is very important, and will vary according to individual needs and circumstances.

Why go offshore

The primary reason for opening an offshore bank account is the great additional security it provides. Keeping some of your wealth aside in an offshore jurisdiction will protect it against many of the threats which may arise in your home country; such as economic and banking collapse, freezing of assets, lawsuits, etc. Many foreign jurisdictions have banking systems which are much safer, more lucrative, offer greater privacy, and a variety of other advantages.

Ordinarily, when it comes to investing, there is usually a clear payoff between risk and returns. Higher returns normally mean higher risk in the economic world. Offshore banking is one of the few areas where one can expect both higher returns and lower risk. It is the ultimate win-win situation, which every smart and savvy investor should seriously consider.


Offshore investment account

An offshore investment account operates similarly to a private offshore bank account in principle, but it gives one greater access to investment and trading options. Through the account, one is able to trade on stocks and financial derivatives and engage in various types of transactions between different accounts. It allows high volumes of deposits and withdrawals, and so is ideal for those who wish to actively invest and trade offshore. Generally, it is best to form an offshore company with which to open an offshore investment account, so as to protect the individual and take advantage of tax advantages provided to companies. In many jurisdictions, it is also easier to open an account in the name of a company compared to a private individual account. Banks are much stricter about accepting individuals, and one usually needs to be a very high value investor. Using an offshore company to open an investment account also leads to greater privacy and autonomy, and so many will find this to be the preferred option.

Problems with traditional banking

Many may wonder, “what is the real problem with just keeping all my money in my own country?”. Those who are unfamiliar with offshore banking may even find the prospect of putting some of their wealth in a foreign country to be frightening, and there may be fears about the risks it would entail. In actual fact, the opposite is true.

Keeping all your money in your own country is extremely risky. Many banking systems, especially those in the West, are really quite terrible to put it bluntly. They are usually very unstable, have very low liquidity and interest rates, high taxation, and offer very little privacy. Banks in favourable offshore environments on the other hand offer much greater stability, returns and privacy.

Contact us For more information and see if a offshore bank account is right for you.
Keeping all your wealth in your own country is akin to “keeping all your eggs in one basket”. If anything should go wrong, as things often do, the results would be catastrophic. Owning an offshore bank account is merely a way to dilute your risk, have a sound back-up plan, as well as take advantage of the many other benefits on offer.