If you are thinking about ensuring the safety and security of your capital, then an offshore account is one of the affordable and simple means to achieve your goal.
So what is an offshore account?
In the simplest sense, an offshore account is a bank account opened outside the country in which you permanently reside. However, not every bank is suitable for the purpose of opening an offshore account in the sense in which we are used to perceiving this financial instrument. In the process of choosing a suitable bank, you need to understand exactly for what purpose you need such an account and what operations you plan to carry out through it.
Why open an offshore account?
The main purpose of an offshore account is to protect your assets. In this case, protection involves placing assets outside the risk zone, which may occur in connection with:
termination of the bank in the country of residence;
the consequences of the local economic crisis;
seizure, confiscation by state authorities;
high tax rates;
fraudulent transactions to which the bank may be subjected;
the consequences of the deterioration of interstate relations, which relate, inter alia, to the financial market;
the imposition of penalties in connection with a violation of the requirements of currency legislation.
Thus, the goals of opening an offshore account are directly related to the security and protection of finances from any shocks that may occur in your country. The question arises: if an offshore account is just a means of protection, why in the perception of the majority is it associated with some illegal activity?
Is it legal to open and use an offshore account?
Like any other financial and legal instrument, an offshore account can be used for both legitimate and illegal purposes. Subject to the requirements of the laws of the country of your permanent residence and international legal norms regarding the movement of financial flows, opening and using an offshore account is absolutely legal. Currently, control over the activities of offshore banks and companies is being tightened in the context of a constant increase in tension in the international space. The control over the taxation of income is being strengthened, as well as the tracking of transactions that can be interpreted as the laundering of illegally obtained income. However, we note again – subject to the requirements, and they may vary in relation to citizens and the organization, country of residence of the account holder, there will be no difficulties with the legal conduct of operations on an offshore account.
Which banks are better to open an offshore account?
To answer this question, you need to know exactly what funds you plan to place on an offshore account and what purpose you set. The choice of the bank will depend on this, both by geographical location and by other criteria, for example, sustainability, reporting procedures, and banking legislation.
Depending on the location of the potential bank, the following geographical areas can be distinguished in which it is possible to open an offshore account:
- territory of the European Union;
- territory of Switzerland;
- US territory
- territory of Southeast Asia;
- territory of the Caribbean.
Each of these regions has its own advantages and disadvantages. As for the choice of a particular bank, it is better to give preference to a “medium-sized” bank, which has a strong reputation and a sufficient degree of liquidity.
How long does it take to open an offshore account?
In the world of finance, time plays a special role. The ability to predict and anticipate possible risks allows you to make timely and informed decisions that preserve assets. Of course, it is better to worry in advance about protection against possible risks, but even in case of urgent need, you should imagine how long it will take to open an offshore account. This procedure consists of two stages, the first of which is the collection of documents, and the second is the verification of collected documents by the bank.
To collect documents you need to get advice from the bank where you plan to open an account. It must be borne in mind that the collected package must be translated into the working language of the bank and certified in the prescribed manner. Depending on the degree of readiness of the documents, it may take from one to several days to collect them.
Verification of documents by the bank, as a rule, lasts longer – up to 10 working days. If you plan to use the account for large cash transactions, the verification period may increase to 1-2 months. Banks check documents very carefully and may request additional documents.
Stages of opening an offshore account for citizens and organizations
Regardless of whether you plan to open an offshore account for yourself or for your company, whether you have studied the general situation in the banking sector, do you have a primary idea of what kind of banking services you will need, at the initial stage it is better?