Offshore Banking

While the modern version of "offshore banking" came into existence in the early part of the 20th century, the concept and practice of offshore banking has been around about as long as there have been reasons for individuals to seek privacy, asset protection and tax avoidance.

Advantages of banking offshore

The advantage of an offshore account and a private bank offshore depends on one's situation. For the resident of a stable high tax country, the reasons to open an offshore bank account most usually involve tax minimization, or securing ones assets against frivilous litigation. In other cases, someone residing in a politically or econonomically unstable situation may derive comfort from the fact that a portion of their assets are outside the undue influence of a corrupt or dangerous government.

While technically an can be opened at any bank which will open a non-resident bank account, the concept of a private offshore bank usually brings with it the concept of a tax haven, anonymous banking, and some level of bank privacy.

Offshore banking, and more generally, finance offshore is one of the few industries in which island nations can compete. Offshore finance allows developing countries to create fiscal inflows and grow their economies.

Online Banking Offshore

Online offshore banking has created a new channel for smaller banks a chance to compete for customers residing overseas. Along with internet banking offshore banks are using online marketing channels to reach more prospective clients. As customers residing in high tax regimes get more comfortable with offshore banking online banking and the internet offshore banking can compete more evenly with domestic banks that are using the same channels to reach their customer base.

Incorporation Offshore

For those who chose to incorporate offshore, an offshore company can provide another signficant layer of privacy. Many private banking strategies involve the creation of a tax advantaged trust, offshore trust or offshore corporation to assist in an overall offshore asset protection strategy.

Private Banking Offshore

It goes without saying that private offshore banking demands privacy. As such, the growth in demand of offshore private banking has led to high tax regimes attacking their viability through discrediting those countries engaged in such business and demanding they weaken, or in some cases completely eliminate their bank secrecy laws. For those attempting to keep their banking offshore private, it has become an uncomfortable game of 'cat and mouse' watching one after another of the previous safe, secure offshore tax havens fall to international political pressure while attempting to keep their offshore banking private from prying eyes.

UK offshore bank havens, until recently, caribbean offshore banks in the grand cayman islands and the bahamas have had their bank secrecy weakened significantly. Those banking offshore in the channel islands have come under attack recently. Even the paragon of privacy, a swiss offshore bank, now finds itself liable to report foreign earned income for residents of the EU...a far cry from the days of numbered accounts and absolute secrecy. A resident of the EU may have a better chance going to non-traditional offshore financial centres, leading many to open an non-resident account at a north cyprus offshore bank or dubai offshore bank, among other offshore banks.

Offshore Credit Cards

A huge recent driver in the popularity of offshore banking accounts is the offshore credit card.

An offshore credit card allows you instant access to offshore bank accounts and more specifically you offshore savings without the hassle and expense of an overseas money transfer.

Regardless of international pressure to close offshore financial centres, don't expect offshore bank accounts to wane in popularity. Private banks which can provide international banking services to individuals looking for a truly anonymous bank account will continue to find a ready and willing market for the services they provide.