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The Benefits Of Offshore Banking

Sep 1, 2008
Offshore banking services can be a lifeline for companies, and are actually much more than ways to launder money, receive the proceeds of ransoms, or evade lawful taxes in your home country, as Hollywood would have you believe! Here we look at some things you may no have known about offshore banking, and how offshore banking in countries like Singapore, Bermuda and the Cayman Islands can be made much easier with help from investment management services and offshore banking services.

It is true that most of those who hold offshore savings accounts are the very wealthy - many of these people will have annual incomes greater than a medium-sized business's turnover. However, this does not preclude small or medium businesses, or indeed private citizens, from the benefits of offshore banking in countries like Singapore. Offshore banking has many, and also incredibly variable, tax benefits. These depend on where your company is located, and where you plan to open an offshore banking account, but have the potential to save thousands.

For companies where travel is an ordinary part of business, offshore banking can have logistical as well as financial advantages. Offshore bank accounts are usually multi-currency, and can be accessed from ports all over the world. Standard bank accounts often have exorbitant fees for withdrawing money outside their usual modus operandi.

The number of loans and investment products that is available with offshore banks as compared to standard banks is immense. This gives businesses more freedom to choose investments that suit them, take advantage of trends in other countries, and also interact more easily with their branches on other continents.

There are several types of offshore savings accounts, including notice, no-notice, fixed rate and monthly interest savings accounts. Fixed rate offshore savings accounts offer fixed rates of interest over as set period - an excellent option if interest rates look set to fall. However, these accounts should ideally be left until the fixed period is over, as early withdrawals often carry hefty penalties. Your offshore banking services advisor can help, both with setting up a fixed rate offshore account, and knowing whether fees and penalties will outweigh the benefits of having the account, in case you need to withdraw early.

Notice and no-notice offshore savings accounts have opposite requirements in terms of what you need to do to withdraw funds. Notice accounts require you to advise the bank in advance of your wish to withdraw, otherwise penalties are applied. No-notice obviously do not require advance advice - but do not carry as high interest rates. The offshore banking industry in Singapore offers a large range of both notice and no-notice products.

If you are looking into offshore banking on behalf of an organization, you may want to consider monthly interest offshore savings accounts. While many offshore accounts pay interest either annually, or on maturity of agreement, these accounts pay monthly. This is a considerable positive for the cash flow of your company, and is also useful for individuals who are looking to make a regular income from interest payments.

One of the most important things to note when considering offshore banking is that it can be nearly impossible to investigate all of the regulations and rules yourself, and that it is highly recommended that you engage professional offshore banking services or investment management services.
About the Author
The Zetland Financial Group provides the offshore investor with fiduciary Services, investment management and corporate advisory services , offering personal service and professional advice with total confidentiality.
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