It is clear that ‘international’ banks are not going to help anyone avoid tax and so why are so many people worried about having an offshore account?
FACT: There is nothing illegal about having an offshore bank account…. it is illegal, however, not to declare your income to the jurisdiction in which you are resident and therefore your residency is the most important aspect to understand.
But why use one anyway?
- Offshore banks offer you multi currency accounts (USD, Euro, GBP and AUD); this allows your global banking to be consolidated with one bank if needed whilst in yachting.
- All accounts come with debit cards on each account and for very little cost, meaning you can access your different currencies easily when in different places around the world.
- Their online banking tends to be excellent with all accounts shown together.
- You can often also access innovative savings and investment products directly from them.
- Security – many offshore banks are subsidiaries of very big international banks and so are secure; in addition they don’t tend to lend and so are ‘deposit rich’ meaning they should be less likely to be affected by events like those we saw in 2008.
- Protection – if you use a strong, well regulated jurisdiction there will be local banking compensation and protection laws to underwrite a certain balance of your money.
Not many local or national onshore banks can offer these sorts of services without significant costs or inefficiencies, such as moving different currencies ‘through’ the base account currency first.