Offshore Bank Accounts – What You Need To Know
Offshore bank accounts have grown to become increasingly popular largely due to the ever increasing number of banks offering their financial services conveniently over the internet. Even though offshore bank accounts are still seen as something only vindictive gangsters would make use of, currently services provided by these institutions are fully regulated and have developed into an extremely promising financial industry worth exploring.
Contrary to what is thought, any bank operating outside the country of residence can be considered offshore. For example, if an individual resides in the United States and chooses to open a normal bank account in Europe, that account could be considered offshore. Currently some offshore bank accounts can be setup online whilst others require clients to visit the premises and display personal identification together with other documents.
A person might want to open an offshore account for many reasons and most can be totally legal. Reasons for opening such a bank account could be resumed to convenience, lower banking fees, higher interest rates, less restrictive legal regulation and easy access to deposits. Frequent travelers might find it convenient to open an account abroad as a means to save money when exchanging currencies since most banks offer preferable rates to in-house clients.
Investors might also prefer to deposit their money in offshore accounts given that some of these financial institutions offer higher interest rates together with reduced tax and banking fees. Large corporations also benefit from offshore accounts for various reasons, namely lower rate loans and other favorable services that provide extremely compensatory savings. Lastly, the popular anonymous banking service, drive many to open offshore accounts.
Offshore accounts also present many drawbacks that deserve special mention. Normally, these financial institutions are located in small island nations where they thrive largely thanks to a fragile political system and reduced government intervention. Obviously there are some countries like Switzerland, Andorra and Luxemburg that do not fit the above description but these nations have had to adapt to new regulations due to increasing global terror and money laundering. Although funds deposited in financial institution residing in European countries are protected against most calamities, in the case of island nations, customers can stand to lose everything in case of a government coup or natural disaster. In the end, offshore banking is slowly losing most of its advantageous characteristics, resulting in fewer benefits to the client who chooses to utilize their services.
