Take Advantage of Offshore Banking

Offshore Banking Legality

Offshore banking activity is absolutely legal in all jurisdictions and anyone may at anytime engage in offshore banking activity. That applies to citizens of the EU, Canada, the USA, Australia, South America and Russia as well.

Offshore banking is a legitimate global banking vehicle, and though the “legality” of offshore banking is seldom questioned by experts in the field, there is often ambiguity about the process and its legitimacy. This is in part due to the many misnomers and erroneous reputation that sometimes precedes the word offshore. It is good to note at this juncture, that it is not the act of offshore banking or offshore activity that has tainted the offshore credibility, but rather the activities through which money is generated and subsequently held in offshore banks.

Incidentally, a decade ago, the word offshore would incite images of wealthy individuals stashing money in banks on remote islands, and that generally offshore banking was not a consideration for the average citizen, something engages in by persons involved in not so legal or reputable activities.

Thanks to strict standardized regulations, monitoring and management of offshore jurisdictions by local and international bodies, such as IMF, OECD and FATF the business of offshore banking has assumed the earned respect as a much needed commercial vehicle, AND the capital investment in offshore vehicles and offshore banks is more legit that ever.

Offshore banking services are a necessary part of international finance without which global trade would be debilitated. Offshore vehicles and offshore banking provide a means and way for international traders to conduct legitimate trade exercise while taking advantage of the currency exchange relaxations, tax exemptions. More often than not, offshore banking offers financial advantages and benefits otherwise not available or not as favorable through onshore or domestic banks.

What is offshore banking really? Offshore banking is absolutely legal banking activity conducted in a jurisdiction other than the one you reside in. Offshore banks can be located across a state line or more commonly, located on a remote island or country.

Many offshore banks are found in international financial centers across the globe; strategically located there to capitalize on the business and investment opportunities. Large financial centers like Hong Kong boast of hundreds of banks, or branches of well known international banks. In those cases, the establishment of a financial center is part of the economic development plan for that country. It is imperative therefore to ensure that the sound reputation of the offshore jurisdiction and financial center is maintained and constantly improved upon.

An offshore jurisdiction portraying a vibrant and well developed financial center will generate much interest and assume growth. Offshore financial centers therefore, mush engage in well maintained and carefully administered business sectors, be it finance, banking or otherwise. And in so doing, must ensure that all operations are legally mandated and regulated in order to get international recognition and standings.

There are many benefits to be gained by the legal act of offshore banking such as asset protection; estate planning and offshore banking can be part of any individuals or companies tax planning strategy. Most offshore banking establishments pay interest on offshore investments without withholding or applying taxes on interest incomes, which is the taxation norm on most countries.

A tax lawyer would better explain the main differences between tax avoidance and tax evasion. But simply stated: tax avoidance is the use of legal strategies to reduce the amount of tax payable; tax evasion, on the other hand, is the use of illegal means to avoid making tax payments. Ironically, many countries do not consider tax evasion an illegal activity either. But it is better to be on the safe side and engage in offshore banking as a tax avoider and not a tax evader. It is highly recommended that anyone considering offshore banking for either personal of business needs, seek the professional services of legal representative and a tax advisor to be on the safe and legitimate side of offshore banking.

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