Having an offshore account conjures up many images in people's minds. Anything from the exotic - to the faintly criminal! One envisages wealthy people stashing their money in private banks, and lots of folks going around wearing sunglasses! But put simply, "offshore" means a place other than your place of residence. In other words, doing "business" somewhere else.
If you are in the UK, then you could treat the USA as offshore - and gain special tax and privacy advantages in doing so. If you are in the USA, you could open a non-resident bank account as far away as New Zealand - and it would be offshore. It would also be very safe.
And this is one of the first myths to dispel about having an offshore account. Many fear that banks may not be so safe away from home. Nothing could be further from the truth. In fact, most offshore banks (and there are some BIG ones!) would be considered a lot safer than your own domestic banks. It is also a fact that most of the assets of very wealthy people are kept in offshore accounts - and with good reason. Being offshore provides security and privacy for one's financial affairs.
Of course the most popular offshore centres are those which do not tax you - hence the popularity of setting up bank accounts, offshore corporations (IBCs) and offshore trusts. Some tax havens (as they are called) offer low or no taxes to both their own citizens and those, from other countries, who use their services. Others only offer tax benefits to those who don't actually live there. But the point is, these tax havens have set themselves up exclusively to provide sound financial services to those who want to protect their assets. It is the basis of their economies and they do it well.
So what are the main advantages of having an offshore account? The obvious one is tax minimisation - doing business where tax is legally not payable. Another is privacy. Most offshore locations have laws in place guaranteeing your financial privacy.
Another advantage of an offshore account is the access it provides to profitable offshore funds. It is often a revelation to US citizens that their government prohibits them from investing in some of the world's top performing funds. As a US resident you are forbidden to profit from such investments. They are not even allowed to be advertised. Well, getting yourself "offshore" can get you access - legally.
Another advantage of an offshore account, when tied in with an offshore trust or company, is the protection of your assets and the administering of your estate. Many countries are dangerous places for litigation, and adept at fleecing people - after they have died.
And of course, an offshore account is an indispensable tool for those conducting international business - whether offline or online. If you are keen on working on the net and earning income from the many business opportunities available - then an offshore account combined with a merchant account offers a powerful tool for the online entrepreneur. All offshore accounts provide popular credit and debit cards - making it easy to readily access your funds, no matter where in the world you are.
Yes, an offshore account is your starting point on the road to freedom, privacy and new possibilities.
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David MacGregor runs an information service designed for those who seek more practical and financial freedom.