by alex drennan
Article by Offshorebanking
A bank account retained by an individual or business under a jurisdiction which they are not resident of, is called an offshore bank account. If the above line is simplified, it means that a US citizen can open a bank account in countries like Hong Kong, Switzerland, etc. This bank account would be considered as an offshore bank account. Offshore accounts have minimal legal regulations and they protect you against financial instability.
These accounts are commonly available in multiple currencies. This flexibility makes it very useful for those who work in various countries or travel a lot. If you travel frequently to some countries, then having an offshore bank account in those countries will be beneficial for you. This simply means that you can access your money any time you need. You never know when a business idea knocks your brain waves and you need to access your funds quickly to make it work.
It provides numerous benefits; but the most important one is the fact that it is tax-efficient. Many businesses use offshore bank accounts because depositing their money within another economy can give them tax advantages. Countries usually provide non-residents few special benefits which can be accessed by opening a bank account there. The reason behind such flexibility would be to attract more and more foreign investments. If you reside in one country and have funds in a bank account that exists in another country, it is most likely that withdrawals from that bank account will be lesser; the money kept in the bank would bear good profit not only for the account holder but for the bank and local economy as well.
It has been seen that people prefer to bank offshore in smaller jurisdictions like Panama, Belize and the Seychelles. These far located islands have secrecy laws and offer better interest rates compared to other developed countries. Developed countries usually have strict laws and offshore banking is less preferred in such places as banks there constantly cut off the interest rate offered to the customer in order to consume profit margin anticipated by their shareholders.
About the Author
Richard Collins is a Manager at OBI which offers its clientele a full suite of offshore banking services delivered with the kind of personal attention that offshore banking demands. The company has in-depth knowledge of off shore banking and experience with over 30 offshore jurisdictions, which they utilize to create a custom-made financial plan for your assets.