May
14
Offshore Accounts: What You Need To Know
Offshore banking has increased rapidly all over the world because of the rapid growth and liquidity of banking and financial markets. The full spectrum of financial services from offshore banks include greater privacy, less restrictive legal regulation, low or no taxation, tax havens, easy access to deposits, protection against local political or financial instability, money transmissions, provision of foreign exchange, trade finance, credit facilities, investment custody, investment management, fund management, trustee services, and corporate administration.
The entire offshore banking idea is simple providing investment access to a wide range of financial options outside the jurisdiction country. One of the common vehicles for this type of investment are those offered in the money market segment of the financial market. This segment of the financial investment characterized by short maturity dates, investing banks provide access to politically and economically stable offshore jurisdictions that may be an advantage for those resident in areas where there is a risk of expropriation or where there is corruption within the financial system. Many offshore banks offer services that may be unavailable in one’s country of residence. Banking and financial services companies offering offshore investment with offices in Alderney, Anguilla, Antigua, Aruba, Austria, Bahamas, Barbados, Belize, Bermuda, BVI, Campione, Caicos Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Gibraltar, Grenada, Guernsey, Hong Kong Mauritius, Ireland, Isle of Man, Jersey, Labuan, Lechtenstein, Liberia, Luxembourg, Madeira, Malta, Marshall Islands, Melilla, Monaco, Nauru, Netherlands, Nevis, Niue, Panama, Sark, Seychelles, Singapore, St. Vincent, Switzerland, Turks Islands, United Kingdom, Uruguay, Vanuata and Western Samoa offering offshore account services to investorss worldwide.
All of the offshore banks now operate within highly regulated environmentssuch as Central Banks, Financial Services Commissions, etc. These banks are required to maintain capital adequacy requirement in accordance and certain standards. All of these offshore institutions must submit financial reports at least quarterly to the Financial Services Commissions.
In the US the Internal Revenue Service (IRS) introduced Qualifying Intermediary requirements, which mean the recipients of US-source investment income are passed to the IRS by the name.
After 9/11 the US introduced the USA PATRIOT Act, which authorises the US authorities to seize the assets of a bank if the IRS believed that the bank holds assets for a suspected criminal. The IRS has closed many of the loopholes that were once enjoyed by offshore investors. Federal tax collectors jurisdactuins now go after all of a corporations’ and personal income and not just the money that they make in the country.
