5 Common Myths About Offshore Banking

Offshore banking has always raised a flag of doubt in the minds of people. Most of us relate to offshore banking as a complicated financial aspect of banking, which has a quite complex framework. However, it is important to understand that it is not the case as offshore banking has been made simple over the last few years. There are offshore laws that define and efficiently regulate banking activities.

Most of us still get confused with the concept and end up believing in certain myths regarding offshore banks. These myths have been misleading people into believing that anything related to offshore activities should be avoided, as it may lead to some trouble. In this article, we are going to have a look at some of the myths regarding opening an offshore bank account and try to solve them.

Myth 1: Offshore Banking is an Illegal activity

For a very long time, offshore banks have been considered to be illegal. This is one of the most common myths that many of you may have encountered. But the truth is offshore banking is allowed in many countries– the offshore tax havens.

A lot of such countries encourage it as this practice brings in foreign investment, which in turn will strengthen the country's economy. Although it is not illegal, a small percentage of such an account may be tied to illicit funds. However, with the latest amendment made to banking secrecy, it has become quite evident that such banks do not protect criminals.

Myth 2:You have to Physically Present to Open an Offshore Bank Account

Although some banks may require a physical presence, it is not mandatory. A majority of top-notch international banks allow customers to open an offshore bank account without having to be physically present in the banking outlet.

You can either mail your documents directly to get underway with the procedure or have a representative or professional service provider do it on behalf of you. It would help you in cutting down frequent travelling expenses and enjoy the benefits of an offshore account from the comforts of your home. Also, this simplifies the procedure of offshore bank account opening in an offshore jurisdiction.

Myth 3: They Open Anonymous Numbered Bank Accounts

Numbered accounts are still operational in some countries. For example, Swiss banks still allow their account holders to use numbered accounts in exchange for a nominal fee. However, even these accounts are not anonymous as the bank would still have access to your identity. Offshore banks do not necessarily open a numbered bank account. Even if they do, you would still be required to disclose your identity to send or receive wire transfers.

Myth 4: It is Only Meant for Tax Evasion

Offshore banking in no way promotes tax evasion. It provides a strategic way to plan your taxes and inculcate asset protection strategies. There are plenty of regulations in effect to discourage money laundering and illegal activities in the offshore jurisdictions. The offshore banks are a great way to avail of lower tax rates and protection in foreign countries. It allows you to receive higher interest rates and benefits that may not be available in the resident countries.

Myth 5:Only wealthy individuals are entitled

It is often mistaken that offshore business is only meant for wealthy individuals and larger companies. However, it is a myth as more and more small businesses are opting for offshore banking as a means to enhance their investment opportunities. Also, anyone can open an offshore bank account as in most of the top jurisdictions; there is no minimum deposit requirement. You can get started with as little money as you can afford and enjoy the benefits of offshore banking.

Conclusion

It is important to note that anyone interested in offshore banking can proceed with it as it is 100% legal. There are various misconceptions and myths that link offshore banking with criminal activities, money laundering, and tax evasion. However, these myths are not true at all, and offshore bank accounts are legal in most jurisdictions in the world. By utilizing the advantages that offshore bank accounts provide, investors, individuals, and small businesses can use offshore banking as a powerful tool for their business development and growth.

An offshore bank account is not just limited to wealthy businesses but is also available for individual account holders. It is perhaps a powerful tool for asset protection and convenience of conducting international transactions from your resident country. The following are some of the benefits of offshore banking: