A Definitive Guide to Setting up An Offshore Bank Account
- November 9, 2019
- Posted by: asal
- Category: Tax Resolution
In a nutshell, offshore banking is depositing and withdrawing money in a bank located from overseas. Apparently, there are a lot of questions revolving the legality of offshore banking and why would someone decide to do it. So, if you’re someone planning to explore having an international account, make sure to read on to see if mystics are true. But, before that, here’s to answer some of your questions on opening an offshore bank account.
Am I Eligible To Open An Offshore Bank Account?
You have to take note that offshore banking is available for companies, corporations, and individuals. This only means that anyone can set up this kind of account. Of course, it includes you. Contrary to common belief, you don’t have to be a high net worth individual or an elite to be eligible for an offshore account.
However, the requirements for opening one won’t always be the same as to open a local bank account in your country. Apart from identity proofs, foreign banks may also need anti-money laundering documents. They are doing this because they wanted to make sure that the person won’t use the account in stashing away money from illegal activities.
Is It Legal Having An Offshore Bank Account?
Opening and owning an offshore bank account is 100% legal. It is in contrast with the common notion that offshore accounts link to tax evasions and illegal activities. However, setting up one requires you to abide regulations of your home country and the country of your foreign bank. As long as you adhere to each of the land’s laws, your offshore account is good to go. In fact, there are trillions of dollars that are on offshore jurisdictions and they still remain an integral asset of a country’s finance.
The table turns if you happen to neglect to declare your incomes and savings in that specific offshore account. This is where illegal offshore “hiding” comes to play. Apparently, tax declaration is a necessary step included in a law called the Foreign Account Tax Compliance Act (FATCA). It requires American residents to report the offshore account to the Internal Revenue Service. Refusing would leave you to carry a burden of 30% withholding tax from the said government agency. Nonetheless, if you get the legal hype of this type of banking, you can reap the benefits of putting up one.
Are There Costs Involved in Opening Offshore Account?
Before you unwarily select a country to set up your offshore account, you should be aware of the costs required in doing so. Obviously, there are fees but that would depend on the country and the offshore bank you would choose. Some banks would charge higher fees considering that you are not a native of that country. But, generally, most of the banks would require reasonable fees that make opening an account easy and convenient.
Do I Need An Offshore Bank Account?
Financial instability and swindles can discourage you from opening offshore accounts. However, you may just overlook it, but there are various reasons why an offshore bank account can be beneficial.
For instance, the country where you are currently residing may experience a financial downfall. An offshore account can save your money from sovereign and currency risk. These accounts are free from federal or local government control and even to your creditor. Which is why you can assure of your asset’s protection and a lesser chance of a frozen or seized accounts.
In much simpler situations, traveling or living overseas with an offshore bank account can get you a peace of mind. Flexibility, as well as accessibility, could be the greatest edges of having an offshore bank account. Wherever you are in the world, you can monitor and get hold of your offshore accounts. Apart from that, it equates an insurance policy that can safeguard your money from the unsound banking system. An offshore bank account can serve as your shield to giddy lawsuits and guarantees your family’s medical care abroad.
If you wanted to explore diversifying your assets, having an offshore account could be a first great step. You can have the power to buy dollars, sell euros and play with other currencies. For companies, offshore banking is also advantageous for acquiring high returns. Owning such accounts abroad can also open doors for opportunities and even foreign investments. Surprisingly, some banks could have 5 to 10 times higher interest rates than your current bank.
You can add tax efficiency as the benefits of having an offshore account. Some foreign banks can be tax havens, meaning they have lower tax rates or none at all. That said, you should not have any second thoughts opening an offshore account today.
What Are The Steps To Successful Opening of Offshore Account?
Offshore banking isn’t just for huge corporations and high-maintenance financial institutions. But this would remain a myth since small businesses and even individuals can already set up their offshore bank accounts. Also, one won’t need to worry because the process of opening offshore accounts is common to all banks. With changing bank policies, you may stick to these steps for a successful offshore account opening. These ways can adapt to different bank policy changes.
Do your background research.
With the money involved in offshore banking, you need to take precautions to avoid further problems. To do so, you have to do research on the best offshore banks with the right offshore jurisdictions. You can either read articles or participate in some forums. Put in mind that all banks are not established equal. Be aware that some might be financially sound while others are not. Make a list of which banks could serve you best.
Contact the banks and decide which to select
After compiling a list of potential banks, it is now time to contact them. Ask questions regarding their standards, rules or requirements. Upon knowing details about them, you can decide the most ideal bank to secure your assets.
Make your request
You can visit your chosen bank to request opening an account. However, banks of today provide online forms or email addresses to submit your request. Either of these ways, it is a need to craft one so the bank can process it immediately.
Wait for the bank’s approval
Once the bank receives your application, they would check and review it. For a bank that accommodates online transactions, you would need to send a minimum fund if they approved the request. The reviewing process usually takes 5 working days. One thing is for sure, they will notify you for an approved request. They would send your bank details, as well as your back card so you can activate it and begin your transactions.
But, take note that if none of these steps is clear to you, you might need help of financial and tax professionals.
Some More Tips in Opening Offshore Bank Account
While you could open an offshore bank account yourself, it is a complicated undertaking. You need to be extremely careful as the country and the banks themselves demand bunches of requirements and regulations. While they can entertain you, there is no assurance that they can provide the best offshore bank account you’ll need.
Some banks would only call for a few identification cards and you can open an account. With the rise of digital operations, you can set up an account in a snap, and without the need to leave your doorsteps. Yet, with the effortless process comes a great question on efficiency or protection of whichever bank you’ll pick.
While the internet provides you excellent options, you cannot guarantee if top-listed banks would fit your needs. Not to mention, there are massive tax implications you should be aware of. Apart from that, a lack of knowledge of tax laws can get you in serious legal trouble.
Get Excellent Help with Offshore Bank Accounts!
Perhaps, opening an offshore account is just the tip of an iceberg. Underneath, you are to deal with vast researches and consultations to say you’re doing offshore banking the right, legal way. Fortunately, tax and financial experts can help make the job easier and less stressful. Getting sound advice from professionals could aid you to avoid red flags and IRS confrontations.
If it’s your first time opening an offshore bank account you would need specific guidance on selecting the best bank. Good thing, in this whole complicated process, there’s Platinum Tax Defenders who are always available to help you! Feel free to reach us and let’s work together to successful offshore banking!