Ben Todd | Apr 16, 2017 | 3
10 Reasons WHY you Need an Offshore Bank Account Now
Offshore banking is a brilliant thing because it finally gives both wealthy and non-wealthy people the chance to hold their capital abroad. When people only bank and save in domestic banks, the banks are able to do as they wish because they have little competition. When people are able to bank abroad, they are no longer reliant on domestic banks.
Critics of offshore banking claim that it forces developed countries to deregulate their banking systems to stop their capital going abroad, but that is not true. What it actually does is force domestic banks to play fair if they do not want to lose customers to overseas banks. The global economic downturn proved that domestic banks do not have our interests at heart, so the fact that they are losing customers to offshore banks is a bonus. It forces domestic banks to shape up or ship out. Still not convinced? Then here are ten more reasons why you need an offshore bank account now.
1 – You Are A Little Safer From Domestic Risk
There are plenty of reasons why the money you hold in your domestic banks is at risk. For example, the Obama government has pushed the US national debt level up to 20 trillion, and the government is becoming desperate for money. If you have more than $100,000 in assets, you will be aware of just how hard the IRS is clamping down on tax payments.
Now they have rinsed people as dry as they can, they are going to start coming after people with money and assets. There is a very real chance that they may be able to force you to pay because you have wealth. Putting it in a foreign account may help keep it exempt from such threats.
There are plenty of other domestic threats to your money, including unscrupulous domestic banks and building societies, depreciating currency, and the fact that the USA is heading for a financial meltdown if it doesn’t dramatically lower the amount of debt the country is in.
Some countries offer trust funds where the money is no longer yours, which means it is free from attack by people you owe money to. However, laws change all the time, which means your trust fund may not be as safe as you thought it was. Plus, there is no guarantee that the person/company who is suing you won’t go after your trust payments too.
2 – Backup Money For Your Domestic Accounts
This point was lumped in next to point number one because it is very similar, but it tackles the issue from a different stance. Point one deals with problems and issues that are long-term, but this point deals with immediate and temporary threats to your money.
The backup money is there for if your accounts are frozen, hacked or attacked. The IRS will know if you have money in a foreign account, but if you are being sued (or divorced), then the other party may be unaware of your offshore accounts. Your offshore account has some backup money you can use if your domestic accounts are compromised and you cannot get to your money.
This article is not offering financial advice (disclaimer), and what you are reading is an opinion piece. With that in mind, if your assets were frozen, but you want to continue living in the manner to which you are accustomed, you may find it difficult getting money from your offshore account without transferring it into a domestic (and frozen) account. Instead, you could reveal your offshore account to a very close friend, and borrow the money from that person with the promise of handing over the money when your money trouble has disappeared. Alternatively, you could transfer an amount from your offshore account to their offshore account, and then they give you the money at home in cash, so then you are not really borrowing.
3 – There Are Some Interesting Investment Opportunities
If you have any experience investing, even with penny shares in the US only, you will have read news features about fantastic investment opportunities abroad. Finding them is tough, and you need a fair amount of luck, but some things are obvious.
For example, Kellogg’s lost a lot of money when they overestimated the impact of their arrival in India. People do not tend to eat cereal for breakfast in India. However, the trend “is” going to grow as globalization continues, so long-term investments in cereal companies that can distribute in India are smart and safe bets. If you had an offshore account that dealt with Indian companies, you may have an easier time investing in such companies.
This article is not going to say that you will find a fantastic investment opportunity overseas, but there are some very interesting ones out there. If you are diversifying, then offshore investing is certainly a good way to go.
4 – You May Earn Money With A Different Currency
You may find and use multi-currency accounts in other countries in order to earn a little money by (essentially) betting on the right currency. If you have a preferred currency, then you may do better by investing in a country that uses your preferred currency. Go overseas for a certain currency, or go overseas for a multi-currency account–the choice is yours. If you do make money from buying, selling and saving currency, then offshore tax laws often make the profit-keeping process very simple.
5 – Higher Interest Rates On Your Savings
This is not a guarantee, but if you have had a look at the rates offshore banks are giving–you have to admit that some of them are very attractive. In most cases, and as with most banks, you will have to have a large opening deposit and maintain a high bank balance. If you do not, you will not qualify for the higher interest rates, and you may even be forced to pay fees to maintain your account and keep it open.
Be very wary of both risk and hidden fees. For example, some reputable banks may offer higher interest rates, but they may also charge more for transactions and may force you to open one of their paid-package accounts before offering their higher interest rates. There are also banks that offer higher interest rates because they are in dire need of extra money and are about to go down in flames, so be sure to check and research your risk before investing your money.
6 – Medical Care And Accessing Your Money Quickly
If you are in another country for a holiday, to work, study or stay for a while, it may be a good idea to have an account in the country and to have some money in the account. If you lose your cards in another country, you may walk into a branch and quickly get a new one or have one sent to wherever you are staying. If you have to have them sent from your home country, they may take longer to arrive.
If you are injured, hurt or need medical treatment in another country, you may have trouble with your insurance, and you may receive worse treatment if you are not able to throw some cash in the direction of the hospital. Having travel insurance and medical insurance is a good idea, and so is having an account I not country that you are visiting.
7 – A Limited But Real Amount Of Privacy
You have no privacy against the IRS, but you may have privacy against hackers, people that are trying to sue or divorce you, and people that are trying to judge your net wealth. The NSA and IRS know how much you have in your offshore accounts, but they are not at liberty to tell people. As a private citizen, you may hold money in foreign accounts to hide it from other people.
It is handy if you are looking to give a gift to another person and you do not want other people to know about it. Maybe it is an extra lover, a lovechild, or a child that you favor. You can have it handed over whenever you wish, or after you die if you wish.
Sometimes, being rich harms your credibility. For example, there are plenty of ultra-rich celebrities that are constantly pleading with people to give money to charities. The public may not be so giving if they were to find out that the celebrity could pay off the problem him or herself and still have enough left over to buy three mansions.
8 – Some Offshore Banks Have Better Banking Systems
Different banks have different banking systems, and you shouldn’t be forced to exclusively work with domestic banks. Over the last decade, they have screwed the general public and caused a massive depression in which the banks were protected, but everybody else got it in the ass! You are not obliged to hold your money with domestic banks, allow offshore banks to handle your money.
In addition, some offshore banks are more economically and politically secure than your own. Developed countries do offer a fairly stable place to put your money, but it is only guaranteed to be insured up to a certain point, and even US states have declared bankruptcy in the past, so do not take domestic stability for granted.
Some offshore banks also offer fantastic lending and finance options. Small countries and small islands often have fewer resources and less space to have people live, work and innovate. That is why some small islands offer very low tax rates and why some offer very attractive lending packages. If you are credible enough, you may find a few offshore banks that are willing to offer you some very attractive finance packages.
9 – You May Be Able To Trust Other Banks
Some banks in the US have debt that is as much as 47 times higher than its assets, and somehow this is allowed and okay in the US. Many foreign banks can be trusted because they are rich enough to be trusted. For example, in the US, you will have spam email and mail that offers you credit cards and bank accounts with free gifts and such. In Hong Kong, you have to send the bank manager a carriage clock and three free tickets to the Epcot centre before he will see you. In Hong Kong, many of the banks do not solicit for customers because they have enough money.
Again, there are some offshore banks that will not charge you tax for the interest you earn in their banks, which usually means you can trust the bank. The reason is because such countries rely on banks to keep their economy churning, so they take good care of their banks with laws such as those that do not charge tax on interest.
10 – It Is Ideal If You Are Living Or Holidaying Overseas
Not every reason for having an offshore account needs to be wealth related. If you are working, living or holidaying in a country either for a long time, or on a regular occasion, then having an account in another country is very convenient. It is also far easier to get a bank account in a foreign bank if you can prove you are a temporary or semi-permanent resident there.
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If you are working overseas, you may be able to get your employer to sponsor you with their bank so that you may get an account more quickly and more easily. If you are opening and/or running a business in another country, then you will also find the banks a little more accommodating. This is especially true if you are employing people in the country and they too have bank accounts. Most overseas banks like giving accounts to foreign business owners/managers because they bring in more money than most personal accounts, they have more transactions, they pay more fees, and they offer far more marketing/promotional opportunities for the bank than people with personal accounts.