Creating a bank account outside of your own country is one way of protecting your money and allowing it to grow in a more secure and centralized manner. The process is called offshore banking. Businessmen, travellers, high-profiled individuals and others use this way of banking for easy access of transactions, investments, purchasing, etc., wherever in the world they may be. Foreign banks have different services and different ways of managing, thus your money is processed depending on the offers of those foreign banks.
An example on how you can use your account offshore is if you are a U.S. citizen and you wish to buy a vacation home located somewhere in Asia, like Hong Kong. In order for you to be able to pay for the monthly or annual expenses for this home in a hassle-free way, you can opening an bank account in Hong Kong and use this to manage your finances from your home. You can also link this account to your local bank account for easy banking arrangements of both accounts.
The money you placed outside your country will be processed depending on the laws, management and other rules and regulation of that bank. Some of the financial services that offshore banks offer are fund management, foreign exchange, deposit taking, credit, corporate administration, management and custody of investment, trustee services and wireless or electronic transfer of funds. These services are not all provided by the banks. You can process your account to the bank as either a private banking or retail service. A retail service usually undifferentiated and has a low cost. If it is private banking, services are more of a personal basis meaning if you have a huge amount of money, you can invest your money and keep your profile anonymous.
Advantages of Offshore Banking
Offshore banking is especially advantageous for people who live in countries which constantly face economic crisis. If you believe the due to the economic situation of your country, your money is not save there, why not deposit it in country with stable economic conditions. Depositing your money in an offshore bank will give you the peace of mind because it’ll no longer be affected by the economic crisis in your country In our world today, we are provided with technologies that allow us to communicate globally, thus creating and accessing an account offshore is not a problem at all. You can contact a reliable offshore banking company to set up your offshore bank account in no time. You can Access your offshore account any time online or by the phone. Another great advantage of offshore banking is that you can deposit your money in any currency you like. This will reduce the risk of fluctuations in currency in your own country. Deposing money in offshore bank account is completely secure. Every offshore bank obeys the bank secrecy law which forbids the bank to reveal any information about the bank holder.
There will also be services from these offshore banks that your local bank will not be offering. An example would be investment opportunities that are not available to other countries or to your country. These banks may also offer loans that are at high rate or low rate. Another advantage also is if a bank is linked to foundations, trusts or other offshore companies, you may get certain tax advantages in your account.
Disadvantages of Offshore Banking
Although you can say that your offshore bank account is secured, it will somehow depend on the status of the bank and probably with the country. Sometimes, it may experience a banking crisis that will put your account in crisis, also. Private banking outside the country is easy to access for those who have higher incomes. The costs in establishing this private account and maintaining it will depend, on the country’s currency rate. However, for retail banking, savings account can be accessed by anyone. This account should be maintained with fees scaled equivalently the same for onshore banks. Offshore banking has been plugged as the solution in protecting customer’s assets and other financial needs but, often, it is just more of an overstatement.
When you are looking to open an offshore bank account, make sure that you research the bank thoroughly and be assured that opening this account is financially beneficial to you and that the bank is located in a safe jurisdiction. Make sure that the bank has good track record for handling offshore customers and it belongs to a reputed parent company. An offshore account opening service provider can be a great help in this regard.