“I have no idea about offshore bank accounts.
ARE THEY A GOOD THING?”
Are offshore bank accounts worth having?
Kirk McArdle, independent financial consultant, on International Offshore Bank Accounts:
When I talk to potential clients about where they bank, most seem to think that the accounts that they use in their home country are all they require. But are they? Let’s take a look at the positives about bank accounts in an offshore country.
Since your money is outside your own country, it becomes invisible to information brokers and the prying eyes of most authorities. Even in countries lacking a formal bank secrecy law, financial privacy is generally respected to a far greater degree.
Being able to hold multiple currencies:
If you’re being paid in a currency that is not your home currency, you have the ability to have multiple currencies in a single account. There are also the advantages of being able to move or transfer money between from one currency to another and thus hedge against the others you hold.
If authorities perform a domestic asset search to determine if you have recoverable possessions, your international assets won’t show up. It’s also more difficult for the government in the country you live in to seize any resources you have offshore.
Tax, what tax:
With offshore bank accounts generally located within tax-free jurisdictions, there is no tax to pay on the money within the account. The downside of this is that there is typically no (or virtually zero) interest figures on your money either! Consider, though, that you won’t get much in interest rates in the USA, USA, UK or Eurozone either…
Global banking institutions:
Instead of just having access to local banks in your home country, you can access some of the worlds leading financial institutes. HSBC, Standard Chartered, Standard Bank, BNP Paribas… to name just a few, can offer offshore accounts in secure, highly regulated jurisdictions.
You can still use and run your offshore accounts after you move back to your home country, but be aware that money transfers either out to or in from offshore accounts will show up to the authorities. Best advice is to let the authorities know about the account(s) and declare the assets.
And with positives there is always the flip side to consider.
Where to open the account:
You have to choose your offshore jurisdiction carefully. Whilst you may well be aware of how the banking industry operates in your own home country and how it is regulated, the rules and regulations abroad differ massively. Also, some offshore havens are less stable than others.
It’s also important to look at the terms and conditions of an offshore bank account. Will you be charged higher fees if you fail to maintain a minimum balance? What are the fees and charges for the account and the services you may wish to utilise?
You cannot physically see anyone!:
It can be more difficult to resolve any issues that may arise with your account if you hold it offshore because you cannot physically visit your branch and speak to someone in person. Rest assured, though, that most offshore banking providers utilise telephone and internet banking services that are exceptional compared to local banks in your home country.
So, are offshore bank accounts easy to open?
Yes, very much so. The larger banks will offer online applications and all have downloadable forms to complete and send to their head offices. You will be required to prove who you are and where you live, but these checks are standard across the banking industry as a whole.
If you feel an offshore account may be a good option for you, please contact me so I can assist you with the ideal set-up for your particular situation.
At Austen Morris Associates we specialize in helping individuals reach their personal financial targets, and there is no one investment that fits everyone. That’s why we like to sit down and talk to our potential clients about their own private situation and to see if we can be of benefit.
If you would like an introduction to Austen Morris Associates and to find out how we can help with asset planning, then please do contact me on +27 11 514 0745 or at email@example.com