With offshore banking, there is no ‘one size fits all’. Deciding your accounts depends on your specific needs and circumstances.
Why Bank Overseas?
An offshore, or overseas, bank account is one that you have in a country you don’t reside in.
They allow you to make and receive payments, hold money and set up savings and investment accounts in multiple currencies.
Banking in an offshore jurisdiction opens you up to global opportunities and advantage. Having a plan B is important in times of uncertainty and having a foreign account outside of the country, especially the United States, where you live is the first step to ensure your future financial longevity.
Personal Offshore Account
Opening a private offshore account in your own personal name with personal documentation and requirements and will generally have strict requirements for accepting a foreign individual as opposed to a company.
You’ll need documentation, references as well as a sizable initial deposit to qualify for one. Factors that will determine the best place to open an offshore bank account would be:
- What is your initial deposit?
- What type of account do you need?
- Where do you live and what passport do you hold?
- What type of financial services do you require?
- What is the purpose of the account?
- What are your tax obligations?
Carefully arranged personal offshore bank accounts (or even just one account) are able to protect your private savings against devastating risks.
Opening an account in the name of an offshore company separates and dis-identifies you personally from the account. This means that your assets will be much safer and less open to unwanted attention.
In many jurisdictions, companies enjoy tax holidays and rebates. It also gives you access to certain investment options available to companies.
Places like Singapore and Panama for instance, generally require an in-person visit, local company management and a sizeable initial deposit to get started.
Offshore Investment Account
Investment accounts offer a greater access to a wide range of investment and trading options.
They usually have a complex structure needing large opening deposits of at least USD 500,000 or more, the formation of an offshore trust and a reliable investment manager or broker. Such accounts are ideal for high-value investors who want maximum returns and protection for their wealth and do not plan on having many transactions.
Transactional accounts, on the other hand, are better for those who need to set up a smaller fund with a simpler structure and especially easier for those who want to access to their funds, make regular transactions, and who are just looking to initiate their offshore plan with a small and simple account.
What do you need to consider?
While offshore accounts could provide a tax-efficient way to save and invest, you need to understand the tax treaties of both the local and offshore countries.
Some offshore accounts may have a monthly fee, maintenance charges, currencies conversion costs, or may charge for international transfers. Others don’t. Figure out what works for you.
Its also important for you to read through fine print and the terms and conditions before opening an offshore account.
The amount you’ll need to deposit, or earn, to open an offshore account will vary. So will the minimum personal documentation requirements.
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