Offshores are still perceived by many people as something illegal. Unfortunately, they were really used historically to engage in dubious practices, like money laundering or aggressive tax optimization. And though they are no longer used for these purposes and comply with all international requirements, the reputation is not very easy to get rid of. However, you should know that offshore banks are just as legal nowadays as any well-reputed banking institution in Switzerland, and it would be unwise to miss the excellent opportunities they provide. In this post, we will pay special attention to the legality of offshore banks.
If you want to know more about offshore banking and safe ways to hold funds offshore, welcome to our portal called International Wealth. We write about everything related to money, such as international business and banking, asset protection, investment in real estate and citizenship, and more. You can also get in touch with our expert to discuss your offshore plans and find the most suitable jurisdiction for your needs – we will analyze your situation and offer the best options available free of charge. And if you want us to take all the administrative steps and open an account for you, we can do so at a reasonable fee.
Is Keeping Money in Offshore Banks Legal?
Let’s make it clear from the start: an offshore account is an instrument that is perfectly legal. However, any instrument can be used for the wrong purposes, and an offshore bank account is no exception. If you are going to hide your money or evade taxes, these activities are illegal, and we understand that quite well. However, while the activities may be illegal, the offshore bank account is not! All you need to do is to use it for legal activities.
If you are a customer who intends to engage in absolutely lawful activities, there are a multitude of them: you can fund your educational projects, manage daily expenses, obtain income from foreign sources, conveniently make your travel expenses, or just protect your wealth.
In principle, you can say foreign account instead of offshore account, and it may be a good way to preserve your reputation if you bring up this topic in a conversation.
Offshore banks were used in the past to obtain almost complete anonymity and protect funds from all authorities. However, it is no longer impossible as present-day offshore banks have to meet stringent transparency and reporting requirements or face the threat of losing their license.
It means that you need to check the implications of having an offshore account in your country of residence: some jurisdictions demand that you declare possession of an offshore account and bear relevant tax liabilities.
Why Open an Offshore Account?
Nowadays, people cannot hide their money in offshore banks so that no one would find out. Still, there are many individuals who open accounts with offshore banks. Why do they do that? Let’s look at the main reasons:
- You can effectively manage your wealth (bonds, stock, funds, any other assets).
- You can diversify risks. That’s the basics connected with keeping your eggs in different baskets: if you have accounts in more than one country, you will be able to minimize the influence of social, political, and economic turmoil and thus protect your assets.
- Aggressive tax optimization schemes popular several decades ago are no longer possible. Nevertheless, offshore banks still provide absolutely legal ways to optimize your taxes.
- You can have convenient access to your funds to pay the bills abroad and make travel expenses in a seamless way.
- You can set and achieve various financial objectives using your offshore bank account.
- Finally, if you have a business, you will have an easy way to settle invoices and complete transactions with customers from across the globe.
Sounds interesting? If you have any questions at this stage, feel free to get in touch with our expert by following the above link to find out the answer.
Steps Required to Open an Account
First of all, you will need to select a bank that will match your status, work with residents of the country you come from, and provide the services you need at fees that you accept as reasonable. What is more, it should be a bank that is ready to onboard you! Present-day banks may be very picky and prone to subjecting non-resident customers to multiple checks. Fortunately, we will help you jump through all these administrative hoops without much hassle.
Next, you need to get in touch with the bank (personally or via intermediaries) to find out the terms on which it agrees to provide services to you. It is very important to grasp the bank’s inclinations (and these may be implicit!) – and our specialists can do that for you!
The next important step is to collect the required package of documents. Our experts will give you recommendations on how to do it in the best way and double-check the documents as errors in them are the most frequent reason why applicants may be turned down.
Sometimes, the bank may require you to make a deposit that may range from several hundred dollars to a million.
The next step is to complete the account opening procedure. Some banks may require your personal visit, while others allow doing all steps online. In some cases, you can open an account online via an intermediary – otherwise, you will have to personally visit the bank.
Let’s look at the procedure in short:
- Prepare the documents you will need to submit (passport copy, residence permit, filled-out bank forms, proof of the legal origin of funds, and professional recommendations in some cases)
- If necessary, have the documents translated into another language
- Make the deposit required by the bank (if any)
- Complete the required checks (KYC and AML)
Your account has been successfully opened? Keep in mind that the bank will meticulously consider your first transactions to see whether you are a reliable customer worth dealing with. Stay in touch and provide the required explanations (it is better to do so within 24 hours).
Click on the link above to talk to an expert and discuss an offshore account opening!