Offshore Online Banking Guide For Everybody

At this time my article describes Offshore Online Banking. In this article I also want to cover on some of the legal and regulatory compliance implications with banks offshore banking. However, do not interpret that information I provide on this site into an online banking legal guidelines. I share this information based on my own personal experience. It would be wise to consult the professional lawyer or CPA (accountant) before you get involved with offshore banking.

Foreword - What is Offshore Online Banking

Simply, offshore bank is a financial institution outside of the shores of your country. If you are British, the United States is yout offshore bank, if you are domiciled in the United States. Bank of Singapore also is an offshore bank for you too. So, the idea of offshore bank is relative.

An individual banks, in this case I mean you, can choose Online Banking Offshore accounts in jurisdictions that are generally advantageous in terms of tax (often referred to as tax havens by the media), as well as in terms of its legality. In addition to choosing the jurisdiction with no small income tax, for most people, the privacy and confidentiality of banking activities into two large main consideration.

Access to your funds is the most important, it goes without saying and the protection from corruption and stability in terms of certainty.

Below is short list of the services offered by banks abroad. Not Mean that list Offshore Online Banking facility is complete, this list is a list of some Offshore Online Banking most commonly offered to businesses and individuals.
  1. Remote Deposits of funds
  2. Direct Deposits of funds
  3. ACH / Wire Transfers / EFT - Electronic Fund Transfers
  4. Consumer and Commercial Lending
  5. All Basic Credit Activities
  6. Access to Capital - Offshore Debit Cards
  7. Forex - Currency Exchange
  8. Wealth Management
  9. Offshore Trading Account
  10. Offshore Brokerage Account
  11. Administrative Services
  12. Trustee Services
Offshore Online Banking usually tend to focus more on consumer or commercial bank. On consumers, banks differentiating between retail consumers (average individual) or called private banking (intended for consumers or high-income individuals)

This happens because of the concentration level of each different that involve different cost structure from the perspective of the banks, when you are selecting Offshore Online Banking. It will clarify what types of consumers are you and what kind of Offshore Online Banking you need. With this explanation you certainly will not be disappointed with the choice you make.

List of Common Offshore Banks

As we know there is no doubt that the two Offshore Online Banking Swiss and the Caymans Islands. Only by citing a journal or pop in business based Hollyworrd flick. Mentions the possibility of the Swiss bank account somewhere.

It is there because as in 2012, these two jurisdictions deal with the most number of total deposits among Offshore Online Banking. In some other jurisdictions that offer Offshore Online Banking are as follows:
  1. Singapore
  2. Malaysia
  3. Panama
  4. Cook Islands
  5. Dominica
  6. Saint Kitts and Nevis
  7. Antigua
  8. Malaysia
  9. Anguilla
  10. New Zealand
  11. Luxembourg
  12. Bahamas
  13. Barbados
  14. Bermuda
  15. British Virgin Islands
  16. Cyprus
  17. Cook Islands
  18. Channel Islands
  19. Monaco
  20. Mauritius
  21. Hong Kong
  22. Malta
  23. Macau
  24. Regulating Offshore Online Banking
With the complexity the coming increase in regulation. Regulatory activity around Offshore Online Banking has steadily increased over the years, but according to many supporters still not enough. This means much more is in the pipelines. Regulation have increased significantly after the tragedy on 11 september 2011.

Financial regulatory guidelines are issued and monitored by global bodies such as the International Monetary Fund or the IMF, where the IMF requires financial institutions around the world to sustain the operating level or certain working standards, particularly in the liquidity and capital adequacy. These performance indicators reported by banks on a quarterly basis to appointed regulator (such as Feed or FDIC in the United States).

List this regulation is there are no limits and quite comprehensive to say the least. Some notables such as the regulation of the Anti Money Laundering (AML) and the Bank Secrecy Act (BSA). Measures such as these require cooperation between financial institutions and tub to immediately report any suspicious activity that resembles laundering money to local governments although melangkan out of the jurisdiction of the BSA.

Another example is the sharing of information between the requirements of a particular group of countries with regard to capital flows and taxation was initiated by members of the European Union. On the other side of the pond, the weight of the United States, the Internal Revenue Service (IRS) requires financial institutions to report the names of companies and individuals who benefited from interest income generated from deposits in institutions based in the US.

The most important thing for me recently enacted legislation is the US Patriot Act, which allows the US government to seize all assets of a financial institution if it suspects that the institution holds assets belonging to potential criminals. Several other countries have since followed.

I personally feel this legislation strengthen the global banking infrastructure. But then again I am only one person. There are others who feel in all sorts of ways offshore online banking.

Interesting Fact: Did you know that only until the 1990s, individuals were allowed to make a bank outside their own country. This practice was stopped and now only large institutions are allowed to do so.

Connotations and Implications of Offshore Online Banking

 It is not illegal to conduct offshore online banking, but activities such as growing niche to bring with them a certain set of connotations and legal implications that you should be aware of and adhere to. There can be heavy fines, penalties and legal consequences if you fail to comply with legal and regulatory requirements.

Why should you think? Because offshore banking has historically been used and abused by people who review intended to Evade taxes, as well as those who used illegal funds for the cause of the review. For example, organized crime networks of offshore heavy use online banking to launder money.

But like I said, do online banking offshore is not illegal. Everyone doing online banking offshore is required by most countries (Depending on their residency) to reveal the activities and results, such as interest income, for example.

Especially in the United States for example, the taxable income of the US population on a global basis. This means that even the interest earned abroad is taxed by the US authorities. Now Although financial institutions are not required to disclose this information to the countries of destination because of bank secrecy guidelines, individuals are required to disclose this information.

Similarly, one can avoid the tax law in certain situations. For example, residents of Country X who live and work in the United Arab Emirates (UAE) may not have to pay taxes if State X is not global individual income tax.

Because there is no tax on income earned in many Arab countries, interest income earned from deposits in UAE bank account is not taxed. Furthermore, the income is not taxed as well in State X. This is a common reason why so many wealthy people to change residency and citizenship status, one that resonates most with a review of their financial goals and objectives.

It is a dynamic that is very interesting and there is tons of opportunity to develop strategies that you can imagine.

Dollar Concentration in Offshore Online Banking


Although offshore online banking is not the subject of investigation by the average individual, the amount involved (the concentration of wealth and financial activities) are quite significant. You may find a lot of this is just interesting.

For example, specialized banking economists and analysts point out that half of global capital (money) flowing through one of the many offshore banks out there. Called Tax Havens (think Switzerland) has more than a quarter of global wealth (think high-income individuals and large companies). Havens also holds more than 30% of the profits generated by companies based in the United States.

And it's not that. More than 6 trillion US dollars held by high-income individuals are also reported to be held in offshore bank accounts in one form or another.

Illegal Monies in Offshore Bank Accounts

Opportunist has identified weaknesses in the offshore banking system and thus has taken advantage of the system to launder money generated through illegal means and used for illegal purposes. According to the IMF, this amount is as large as 1.5 trillion US dollars every year. To put things in perspective for you, this is about 5% of the world's total Gross Domestic Product (GDP).

In addition to illegal money, there is also money that has been tax evasion and money earned through fraud, bribery and corruption. All in all, a super large amounts. And as I mentioned above, two jurisdictions with the largest concentration of this sum is the Cayman Islands and Switzerland (per 2012).

Offshore Internet Banking for Corporations of All Sizes

I've said before banking online, but offshore is not just for large companies, but companies of all sizes and individuals. There is a certain set of requirements that any organization, individual or company must meet in order to open and maintain a bank account offshore.

In fact, it is easier for individuals to open and maintain a bank account offshore before companies are required to fill out additional forms in a certain way when establishing an offshore internet bank accounts.

Companies typically engage in offshore online banking when they reflect on one or a mixture of the following purposes.
  1. Cost containment (bank fees and charges)
  2. Paying and receiving payments from vendors and customers in local jurisdictions
  3. Asset protection strategies
  4. International acquisitions and investments
  5. Compensating local employees in an offshore jurisdiction
  6. Political reasons - Stability and predictability
  7. Establishing a local business presence
Again, why is this not a complete list of companies involved in offshore online banking. There are several other reasons why a company may decide to set up an offshore bank account. The only true way to know the best offshore bank for you, and what your goals will be met through offshore Internet banking is to talk to a professional who can guide you through the whole process.

Concluding Thoughts on Offshore Internet Banking

I give a ton of information to read and digest in this article. As you have read, offshore internet banking is used by several different constituencies for several different purposes with several different intentions.

There are several significant advantages that can be derived from open offshore bank accounts as entering new global markets and some serious offshore tax planning. I obviously recommend opening an offshore bank account for the right reasons, with full compliance with laws and regulations. For those contemplating abusing the system, understand that the concept of banking secrecy weakens, and one that will continue to weaken over the years.

State increasingly sharing information, some voluntarily and temporarily succumb to pressure powerful countries like the United States.

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