Keeping your money in banks outside the country was once perceived as dubious. Usually, as seen on television or news, the ones who normally keep their money overseas are businessmen doing illegal transactions. However, opening an offshore trust account is completely legal.
There are a lot of reasons why it’s beneficial to keep your money overseas. Also, if you have a business and you’re planning to expand globally, having bank accounts in other countries will surely give you an edge.
What Is Offshore Banking?
Offshore banking refers to the act of opening a bank account outside your home country. Another way of referring to it is using international banks. Doing offshore banking seems to be daunting, knowing mostly rich people only do it. It gives people the notion of providing a huge amount of money to open an account overseas.
However, even normal people are welcome to do it. One of the examples is American citizens who open bank accounts in Canada.
Moreover, it’s legal to have an offshore bank if you are practicing the following:
- Staying in a foreign country for years or months
- Investing in a foreign country
- Doing business overseas
- Having required overseas documents
Reasons To Open An Offshore Account For Your Business
Having a foreign trust account could bring more benefit to your business than harm. Here are some reasons why it’s best to do offshore banking:
1. Financial Safety And Privacy
People are cautious in keeping their details private. Some even don’t want their basic information known by the public. A lot of influential people take their privacy seriously since their reputation would be at stake, especially when it comes to finances.
While offshore banking has been used by some people illegally, this should not be generalized. A lot of people are using it merely because they have a business in a foreign country or they have an investment.
Your safety could be put at risk if banks in your home country don’t put a high premium on their client’s privacy. For instance, there are banks whose customers’ details could easily be infiltrated, leaving customers being flocked with spam messages.
Opening an offshore trust account ensures protection from potential threats in your country, and it isn’t that hard to create one. You must research first the banks that can provide the service and read their requirements. You could also hire companies that will transfer your business trust account to an offshore account like the Titanium Trust and other reputable institutions.
You can easily keep your business trust account private and secure from creditors in case of lawsuits. Your business finances will then be safe from being examined by such.
2. Lower Your Political Risk
The government has become one of the potential risks to your savings. When the government doesn’t know how to handle finances well, people suffer. Some destructive measures are seen in several countries that the government isn’t functioning responsibly. Some of the problems are bank deposit taxes, retirement savings nationalization, and capital control.
While these may not be happening in your country, putting your money in international banks provides safety to your finances and will help you secure your finances from politicians who are taking advantage of their power.
Having offshore banks will keep you from having your assets and finances taken away. When you open an account overseas, it gives you a sense of security as you can access it anytime without worrying about authorities from your country.
International banks also provide exceptional service to their clients as they assign you a customer representative or relationship manager to attend to your needs any time of the day.
Likewise, you can access your account all year round. Thus, you don’t have to worry about it even if you’re not visiting the physical bank. Having international clients that are wealthy and influential, offshore companies make sure their services are exceptional.
Offshore banks make sure you’re provided with the strongest financial protection as they follow anti-money-laundering protocols, especially on an international platform.
4. Tax Relief
There’s a possibility of being taxed enormously when you open an account in your country, depending on how much your transactions are. On the other hand, opening an account overseas offers a more favorable tax arrangement.
Being a foreign client, tax is charged partially only. You could have more investment freedom as the rules in your country don’t necessarily apply to them. This will provide added value for your money. You can save more in an offshore trust account and use it as an investment for other businesses.
5. Invest In Overseas Or International Markets
Saving you from potential crises or setbacks with your investment is also one of the advantages of using an international bank. When your home country declares a recession, your business funds won’t be thoroughly affected if you have an offshore bank as it is beyond your country’s sovereignty.
These international banks have portfolios spread across the region, and they make sure every investment is balanced. This becomes an advantage when one area suffers from financial instability. However, there are still other markets for your investments that may not be directly affected, enabling you to still operate your business even when your home country is in an economic crisis. For established offshore institutions, their transactions are usually stable.
Keeping an offshore trust account for your business can be one way to manage your business finances better as it has certainly a lot of advantages. While it may seem intimidating to open an offshore bank account, having your hard-earned money safe from being taken away or stolen will put you at ease.
Likewise, the money you put as an investment in offshore banks will provide you a greater return of income. This will add to your finances aside from getting an income in your business. Also, it provides you further opportunities when it comes to your transactions. Expanding your business’s reach through opening an offshore trust account is a great way to start investing internationally.
Danis Woods in Businessman, investment banker and stock exchange traders. On the same time he loves writing financial blogs to shed lights on different aspects that new and existing businessman are not aware of.