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Corporate Offshore Banking As Part of a Legal, Sound Business Plan
There has been much focus on the illegal reasons that people take out corporate offshore banking accounts in recent times, with the debacle over information sharing in Switzerland. Offshore bank accounts are known only to much of the world as the accounts that criminals use to extort ransom money or to launder illegal profits. Here we look at some of the major, legal, and often overlooked reasons that companies use business consultancy services for offshore bank account opening.
Tax benefits are one of the major reasons that offshore banking is such big business worldwide. Every country has the right to set their own taxation system, and every citizen also has the right to choose with whom they bank. There is nothing illegal about this; however, there is a line between tax avoidance, which is legal, and tax evasion, which is not. Business consultancy services and investment management services used to dealing with offshore investment business can advise on where an activity sits on the avoidance-evasion continuum.
Offshore bank accounts make for a very profitable investment base. It is easier to buy and sell foreign currencies when you already have an offshore bank account, as well as assets like precious metals and real estate, without being bound by any anti-investment rules in your home country. Insurance and annuity products often have very high returns, and bank account opening overseas can give you easy access to these.
One benefit is particularly important for US customers - corporate offshore banking (and private offshore bank account opening) helps protect your assets from one of the most litigious societies in the world. In the case of a disagreement, potential plaintiffs will be discouraged by the difficulty of accessing offshore assets. Attorneys are less likely to take the case, and frivolous suits are almost erased.
Planning and diversification is another reason that many investment management services advise holding offshore accounts. In offshore facilities, you can set up asset protection trusts, limited liability companies and private family foundations, each of which can share in the profits of the main company. Planning becomes safer with a more diversified portfolio.
The privacy that corporate offshore banking affords is often touted as a reason that all offshore account holders must be criminals. The assumption is that if you have nothing to hide, everyone should be able to know the details of your business. However, anybody that has experienced the repercussions of an outside assumption based on partial information knows that sometimes, in legal circumstances, privacy is best. Although nations such as Switzerland are moving towards a more open environment, the release of details will still need to be court-ordered. The plaintiff must show probable cause for the order to be made.
The benefit of privacy is especially important to American clients, who are feeling the impacts of the post 9/11 panic and the Patriot Act, which allows heretofore unknown breaches of privacy, occasionally in the name of simple individual suspicions. You can use other tools, such as company formation services, and nominee shareholders and directors to further protect your privacy if your bank account is corporate.
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