Offshore Banking | Offshore Banking Services | Tax Havens

For a depositor, offshore banking¬†normally means services of a bank from a country other than their country of residence. If you have invested or deposited funds to a bank outside the country (referred as “Offshore Bank”), where you live, you are engaged in offshore banking. On the other hand, any bank in your country of residence is often referred as a domestic bank.
There are two main myths about offshore banking. First, that it is associated with criminal activities, and money laundering and second, that these services are only for high-income individuals.

What are the benefits of offshore banking?
Offshore services provide a wide range of benefits and open up distinct opportunities. An offshore account is a powerful tool for keeping money secure and to enjoy tax advantages. Often offshore banks provide services that are not available to domestic account holders. The most important of them is undoubtedly the bank secrecy and exemption from capital gains tax. Additionally, income generated in form of interest on deposits is not taxed by the income tax and customers get a possibility to invest globally.
The offshore banking is strictly private. The confidentiality of all operations conducted through the account is usually protected by the local legislation. The account is protected from creditors, from the tax authorities, and from other interested parties. It is to some extent a defense tool.

Why go offshore?
Offshore banking centers open a wide range of opportunities for its users: access to innovative banking products, anonymity, safety, politically and economically safe environment.

Can I avoid taxes with offshore banking?
Most offshore banking centers are at the same time tax havens (low or no tax jurisdictions). Some offshore jurisdictions exempt all incomes from all taxes, while others exempt only those incomes that were generated by sources outside the jurisdiction. Although offshore banking centers do not tax your income, your home country may be taxing foreign-generated income. So you must check your country’s legislation: if your countries authorities do not tax income generated from foreign sources, then your offshore incomes shall not be taxed, but if they do (like the US does), you should report them, otherwise, it will be considered as tax evasion.

Is offshore banking legal?
The answer to this question is quite simple: it is legal; nobody is arrested for having an offshore bank account. The opening offshore bank account is absolutely legal service provided by a financial institution that is licensed in full compliance with the legislation of a tax haven.
What can be illegal is when a person holds an offshore bank account, receives an income and does not report this income in his home country if the country’s legislation requires that. In other words using offshore banking is legal, but using offshore banking for illegal operations, such as tax evasion is illegal.

Is offshore banking safe and secure?
Offshore jurisdictions are politically stable countries with strong economies and developed financial sector. The financial sector is tightly regulated to eliminate the risk of bank failures and ensure a good image of a jurisdiction making offshore banking highly secure.

Is my information kept anonymous and confidential?
Most financial institutions in offshore banking centers provide anonymity to their clients. Generally, bank secrecy is ensured by a country’s legislation. The degree of bank secrecy varies from one jurisdiction to another; therefore if you are interested primarily in bank secrecy, you should check the legislation first to be sure to what extent your personal information is protected.

Which one is the best tax haven? What country is the best option?
It is difficult to answer this question. The simple answer is: “it depends”. It depends on what exactly you are looking for. If it is bank secrecy, then Panama may be a good choice. If you are resident of UK and want to go offshore, then you may want to choose services provided by Channel Islands (Jersey, Guernsey, and the Isle of Man). The answer varies according to your priorities. We provide here description for major tax havens, so it is up to you which one to choose.

Which banks provide offshore bank accounts?
Offshore bank accounts are provided by both local banks operating at offshore banking centers and also by reputable international banking institutions, such as HSBC and Barclays. Actually, you can open a Lloyds TSB Offshore Bank Account In Sterling, US dollars or Euros in minutes.
Is offshore banking really linked with criminal affairs and criminal financing?
Despite the fact that offshore banking provides bank secrecy, high degrees of privacy and confidentiality, this sector is strictly regulated and supervised business and this leaves very small space for criminal affairs. Opening an offshore bank account is not as simple as it may seem at the first sight. There are a few organizations like Financial Action Task Force (FATF), Basel Committee and the Offshore Group of Banking Supervisors (OGBS) that impose strict regulations on offshore banking sector of a tax haven. Tax havens that do not comply with the regulations imposed by these organizations risk to see themselves in a blacklist. This makes it almost impossible to transfer funds banking institutions from a jurisdiction that is in the blacklist. Such approach makes tax haven authorities interested in to reduce or completely eliminate illegal transaction and makes very hard for criminals to engage in money laundering. So it is very important that the bank your choice has a good reputation and is incorporated in a tax haven that has a good reputation.