For many experienced industry leaders, setting up offshore companies is the norm. By doing so, such leaders are able to develop better platforms for the provision of services, for the protection of investments and for the development of more versatile business portfolios. When setting up an offshore company, it is also logical to set up offshore business accounts. However the set up of offshore business accounts is not limited to offshore companies, and many onshore companies also do this as part of the development of their business portfolios.
The value of offshore banking
If you conduct business internationally, you will require quick and efficient banking support wherever in the world your company is registered. Offshore banking services are particularly valuable to organizations that work internationally where the customer and supplier base is international and payments are made and received in multiple denominations. By setting up an offshore bank account, organizations like these are able to better structure their finances, and ensure that there is ease of movement of funds in order to fulfill its business obligations.
You have just landed a job in a foreign country and in a few weeks time, you and your family members have to relocate to the new workstation. Under the new environment, it is probable that you won’t have gathered enough information regarding the merits of off-shoring your finances. After all, most governments discourage their citizens who work onshore from investing in foreign countries. Rather, they encourage them to invest inwards.
There are numerous reasons for this. For one, the government encourages its citizens to honor their reporting responsibilities, especially when it comes to taxes. The reason for this is simple; they want to keep an eye on their citizen’s money and assets where they could easily be monitored, hence preferring them being onshore where it is easy to do so. Nevertheless, when you are posted abroad, this monitoring becomes impossible as you are out of your government’s direct jurisdiction. This being the case, you can easily be able to invest in the country you are in, or in any other country you may deem appropriate to invest in, thus the importance of understanding the offshore investing procedures of diverse foreign countries.
When you hear someone say “Bahamas” the first thing that comes to mind is beautiful beaches and the roar of the ocean. While Bahamas is one of the key holiday destinations for people who are intent on soaking up some sun, there is more to the Bahamas than this.
Financial service in Bahamas
Bahamas has a very well developed and mature financial services structure and key in this is the provision of offshore banking and financial services. While there is a plethora of commercial banks in the Bahamas, the focus is on all aspects of financial services including insurance, mutual funds and credit unions as well. Much of the financial services provided and developed in order to turn Bahamas into a financial services hub are regulated by the Central Bank of The Bahamas. The focus is on the development of strong structures of economic management specifically targeted at individuals and organizations interested in offshore financial services.
If you are an expatriate, chances are you would have set up a local bank account in your current country of residence, and that you conduct your current financial transactions from this bank account. In most countries, banking services now include internet banking which has become the best means of accessing your account, paying your bills, making investments and gaining access to a host of other financial services from the comfort of your home.
Tips about internet banking security
If internet banking is new to you, there are some very important tips that you may find useful to also ensure that everything you do via internet banking is protected, as that protection starts with you. When you sign up for internet banking, always ensure that this is done securely from the time the account is created and the internet banking access provided. In order to keep your financial information secure, it is suggested that you regularly change your password and always ensure that you use an alphanumeric password which is harder to crack. Also beware when accessing your internet banking facilities in a public place such as internet cafés in order to ensure that your keying in of details is not tracked or recorded.
There are many little island nations that have established financial services and international offshore banking platforms. These cater not only to corporations but also to private individuals who are interested in banking offshore. One of the key benefits of using such banking facilities is that the tax structures are great and there is easy flow of foreign currencies.
Bahamas as an offshore banking destination
Bahamas has acquired a good reputation for providing offshore banking services. Although not a new player in this industry, the Bahamian government has spent the last decade restructuring its banking and financial services sector to be friendlier and more compliant with international best practices and regulations.
As a consequence, today their banks work in compliance with international banking law. For investors and offshore banking customers, whether corporations or individuals, this has provided a much-needed confidence boost. Bahamas offshore banking boasts easy accessibility to funds and responsiveness to their customers’ needs and requirements. In addition, there are great tax policies in the Bahamas. This means that it is possible to avoid taxes on cash assets, and income is accorded tax-free status. Indeed, the banking structure specifically provides tax shelters for its account holders. In order to remain competitive with other countries that offer similar offshore financial services, the service charges imposed by the banks are lower and the interest rates offered are higher.
Is going offshore the best investment plan to help protect an investor’s assets from the creditors or litigants? The answer may seem easy, but it is not. This is because it actually depends on specific case circumstances. However, to get a clear understanding of this matter, you need to consult a qualified and an experienced offshore asset protection specialist. What do you need to consider before making a decision as to whether to move your assets offshore? Below are some key factors to help you decide.
- The type of your asset: Offshore plans are mostly suitable for protecting your liquid assets. For example, if you want to protect your bonds, jewelry, stocks, short investments and so forth, going offshore is generally the best idea.
- The assets net worth: If your liquid assets are worth more than a million dollars, it is better to transfer them to an offshore company or entity for their security or protection.
- The legal hassle and the risk factor: Any high risk business or profession attracts or is susceptible to lawsuits. So if your business or profession falls under this category, then it is advisable to opt for an offshore option as it will offer you better protection as compared to a domestic one.
- The amount of money to spend: Offshore investing requires some more complex strategies so as to succeed.
- The time for creating an offshore planning strategy: A domestic investment option is only good if there are no claims against the investor, especially so at the planning time. However, it won’t hold ground if you are already a party to a suit.
One common question is: is it really possible for people who invest offshore to save on tax? Otherwise, why else do the politicians, celebrities, and pop stars have offshore investing structures in place so as to protect their assets? The facts are that these people are basically protecting their assets from litigations. They are looking after their finances and ensuring that they don’t overpay their tax obligation. Actually, you are under no obligation whatsoever to overpay your tax bill. Now before getting into how you can save on tax by going offshore, there are a few important factors to bear in mind.
First of all, going offshore is a hundred percent legal, mainly due to the fact that people nowadays live in a global village society. However, what really mystifies a lot of people is their conscientiousness when it comes to reporting their offshore activities. Whilst it is 100% legal and legitimate to go offshore, it is illegal to go offshore for criminal activities, or going offshore and failing to report what you are doing, especially where there exists a need for legal reporting. When in doubt, assume that a legal reporting requirement mandates you to take action and report your offshore activities for tax purposes. Always seek expert advice when it comes to offshore investments, because what you do with your security, finances, their security and the freedom of selection is quite critical for your offshore investments success.
There is much to be said about being able to live the expatriate life. Spending years abroad providing expertise in your industry, being provided with perks that only expatriates can understand… this is clearly the life that most can become accustomed to. If you are a new expatriate and have just settled into your new home and your new work environment, as you work to understand local cultures and norms as well as enjoy local delights and explore secret treasures that you would not be able to see even as a tourist, it is time to get back to ground level for a little while, to talk about banking.
Banking on being an expatriate
One of the best inventions since the banks themsel
ves is online banking. This provides a platform that allows us all access to our funds without having to queue, park or travel further than our computer screens. For expatriates, this is advantageous as you are able to access funds from anywhere in the world at your finger tips and there is no need to write checks for mortgage and bill payments well in advance in order to ensure that you avoid whatever penalties may be imposed for late payment.
When it comes to offshore investing or offshore banking, most people are totally in dark regarding the legitimacy and the legality of it all. Going offshore is a hundred percent legal, legitimate and a lot of people from politicians to business people to pop stars and the like opt for it. It is especially beneficial to expatriates, whose investment options are limited by them being foreigners. However, to make it legal, individuals have the legal obligation to report their offshore activities to the relevant government agencies, such as tax authorities.
Basically, it is illegal to evade your tax obligations, lauder money or engage in other criminal activities masquerading as an offshore investor. Offshore investors need to accept and understand that they must report their offshore activities to the relevant government bodies when required to do so or where offshore legal reporting is mandatory. To reduce the reporting needs, offshore trusts, offshore companies and other legal offshore entities are mostly structured in such a way that there are few, if any reporting requirements, though it is dependant on unique personal circumstances.
Going offshore with a company, having concealed bank accounts in foreign countries and the like were once the domain of the affluent in the society. Imagine a Swiss bank account, having a marvelous residence in Monaco, and the Ronny Biggs in Brazil – these are items that only a few super rich members of the society could afford. However, times have really changed and through the internet, accessibility to tax reduction assistance and methods (for instance going offshore) has not only become possible, but has also become a reality to all types of average investors.
So why going offshore? Currently, information is king and many governments the world over are using the terrorism threat to spy into the private affairs of their citizens. A respite from all this had to be found; and there’s no better than going offshore. But what really is an offshore company or an offshore corporation? Well, it is a completely separate legal entity that may carry out business activities, own assets and other properties, pay debts, takes care of its liabilities and which can also be singularly be sued.