The choice of whether to bank offshore or not is one that should be approached with caution, and discussed in great detail with both your financial advisor and legal representative. Many of us dismiss offshore banking out of hand.
It’s true that there is a significant amount of negative publicity surrounding offshore banking with cases of money laundering, hiding assets for divorce purposes, fraud or other types of tax evasion being synonymous with offshore banking. There are, however, some distinct benefits to choosing to bank aboard.
The Benefits of holding Offshore Accounts with Good Interest Rates
The vast majority of offshore accounts offer services, virtually identical to domestic banks. In addition to acting as regular savings accounts, offshore accounts provide you with the option of using the bank in the same manner as a regular savings account.
Offshore banking additionally offers you the option of holding a debit card to access funds. A number of banks will sell you mortgages and loans, in addition to affording you the opportunity to apply for a loan or mortgage.
Offshore loans aren’t regulated in the same way that domestic banks are. Mortgage interest rates are typically much more competitive than domestic banks. Those that hold offshore accounts have the opportunity to make their monthly mortgage payments in a relatively stress-free manner.
Higher interest rates on deposits which generally allow you to get the most from your savings are open to those that bank offshore. Banks compete for consumers business. The revenue brought in by consumers is essential. It’s worth considering that the business costs of offshore banking tend to be significantly lower than those of domestic banks.
Offshore accounts aren’t regulated by the government in the same way that domestic banks are. For this reason offshore accounts are able to offer a wider variety of investment alternatives to both their corporate and personal banking customers.
The Disadvantages of Offshore Banking
It has to be said that despite the benefits of offshore banking there are a number of disadvantages. Historically, offshore banking has been synonymous with illegal money laundering and tax evasion activities. Any offshore bank may be somewhat unscrupulous.
The terms and conditions of offshore banking will be different to domestic banks. For this reason it’s always imperative for corporations and individuals to read the fine print. Always consider the account fees and charges on the services that you wish to use.
If you bank offshore it’s always difficult to resolve any issues. You simply cannot physically walk into a branch and discuss any queries that you may have.
Offshore banking offers fewer flexible account options than domestic banking. Offshore banking accounts are subject to their own regulations. It’s important that anyone considering banking offshore understands how the banking industry operates in that country.
Any decision to bank offshore needs to be carefully considered. Whether you’re considering moving your corporate holdings abroad or if you wish to take advantage of the benefits of personal banking in a different part of the world, it’s wise to carefully consider the decision.