Offshore banking: what are its advantages?
For quite some time, offshore banking has been considerably gaining in popularity. While it was previously seen as something reserved for skilled financial experts, big corporations or the super wealthy, it is becoming more and more accessible than ever. Have a look at some of its advantages. Tax incentives One of the most significant factors motivating investors to bank offshore is the tax benefits. In countries like Mauritius, tax rates are extremely advantageous to investors. Offshore banking is a resourceful way to generate wealth. Thus, the countries devise incentives so that both parties can benefit from this venture. For instance, as long as investors do not participate in local trade or make their money within the country, their assets are not subject to local tax laws. This implies a decrease in income tax, capital gains tax or property tax, among others. Better asset protection Thanks to offshore banking, investors have a lot of ways to better protect their assets. You can either simply store your liquid assets offshore in a traditional checking or savings account or you can take things further, branch out and explore additional structures for asset protection. For instance, you can set up different types of trusts in Mauritius. This will allow you to preserve and protect existing assets and enjoy tax benefits without losing control over how they are managed. Moreover, many offshore banks and banking countries aim to protect the assets of investors and they have a legal system that is beneficial to foreign investors to do so. Privacy and anonymity It goes without saying that offshore banking will provide you with greater privacy. Investors might not wish to have their financial decisions made public for several reasons. Thus, when they bank in international waters, they can benefit from greater financial privacy, confidentiality and even anonymity if they wish to. This does not mean that you are opening a bank account in secret. Instead the offshore company you patronise will take the responsibility of confirming your identity and your place of residence. This will allow them to authenticate your standing to legally required entities while also protecting your identity. This type of protection will allow you to buy more stocks in a single company or simply keep your financial dealings private. This involves activities ranging from setting up an offshore savings account to establishing a large trust for future generations of beneficiaries. Decreased vulnerability and increased diversification Banking, wherever you choose to do so, involves inherent risks. Domestically, there are political and economic factors to take into consideration and these extend to offshore banking as well. However, offshore banking can decrease your vulnerability to these risks because it increases your diversification. Everyone in the financial sector is aware of the importance of diversification. By choosing to process all your financial transactions on domestic land, you are making yourself more vulnerable. Offshore banking ensures geographic diversity. You are spreading your wealth around, creating a financial safety net, and reducing your vulnerability in a significant way.
Offshore banking: all you need to know to open an account!
The offshore banking sector is constantly evolving. While it used to be a luxury for the extremely wealthy a few years back, that is no longer the case. In fact, academic research has proven that the demand for offshore baking is on the rise by many and this will continue to be the case for quite some time. Why do people open these accounts? Investors opt for offshore banking because of many reasons. The main one is asset diversification. However, there are several features such as privacy and risks that must be considered. Everything you need to know about offshore banking will be explored below. Basic requirements to open an offshore bank account There are some basic requirements to fulfil before opening an account. First of all, it has become increasingly important to present your own proof of address so that financial institutions are able to confirm your domicile. This is important because they need to comply with tax obligations or to deal with issues such as OECD compliance and much more. This requirement is met by producing a utility bill that is not older than 90 days and this document must be submitted along with the usual information, such as your name, date of birth, citizenship, passport and job details, that you must provide. To make things easier, in countries like Mauritius, your physical presence is not even required to open an offshore bank account. Our agency is going to help you complete all the procedures. If you want to learn more about this, you can get in touch with one of our agents. Benefits of opening an offshore bank account There are several advantages to opening an offshore bank account. Besides from benefits that are country-specific, Luigi Wewege has advanced a few general ones, that are also very important to consider, in his recent 2020 interview. He said that they generally include “peace of mind… against political upheaval, increased personal freedom, living in the digital banking revolution, currency diversification, higher interest rates on deposits, easy access to medical care abroad…” and others. As such, you must ask yourself whether you will be able to achieve those benefits by opening an offshore bank account and make a decision after this evaluation. Where to open an offshore bank account? Deciding in which country to open an offshore bank account is very important. There are several criteria that you must consider before picking up the appropriate location. For example, you must consider The tax rate: is it a beneficial one? Banking privacy: will you be able to enjoy the privacy that is required to protect your financial assets and to keep your transactions secure? Interest rates, Treaties between the country you want to establish your offshore banking account and your country of residence and Personal circumstances. Additionally, you must also choose a country that is suitably located and prepared against global tensions. These involve volatility because of issues such as flashpoints in The Middle East and Asia, Brexit or even the US/ China Trade War.
