Offshore Banking

Before going any further we have to define what is offshore banking. Offshore banking combines all the services provided by financial institutions located in the areas which benefit from privileged taxation or legislation.

Offshore banks offer to its clients strictly confidential policy when transferring your capitals, tax free transaction on the amount deposited and on the interest generated, diverse and interesting investment solutions.

There are thousands of offshore banks offering a range of bank accounts in different jurisdictions. The best known, "classic" countries for offshore banking are Switzerland famous for its banking secrecy traditions, or small European countries such as Luxembourg, Liechtenstein and Monaco, for their tax exemption. However, the laws have changed now and the places far from Europe become more and more competitive and attractive. Many smaller countries even do not need to invest substantially before starting to offer offshore bank account services. Some companies and wealthy individuals prefer to open offshore bank accounts in small sovereign states which allow account holders to remain almost anonymous.

Once, really, offshore banking was associated with shadow economy and organized crime, being a convenient way to hide profits from illegal activities or unreported business earnings. In the last years, however, the rules governing an offshore bank account have changed and became much stricter. Now offshore banking does not legally prevent assets from being subject to personal income tax on interest, the personal income tax of many countries makes no distinction between interests earned in local and overseas banks.

Offshore bank is a bank located in a foreign country and specifically licenced as offshore under appropriate offshore banking legislation. In most countries, any individual or business can open and operate bank account outside their own jurisdiction and obtain major benefits in terms of asset protection and tax reduction. Offshore banking is tax free, the account information is confidential and there are no foreign exchange regulations.

Offshore banks offer to its clients strictly confidential policy when transferring your capitals, tax free transaction on the amount deposited and on the interest generated, diverse and interesting investment solutions. Actually, offshore banks have to hold far greater reserves than mainland banks, and in each jurisdiction they are regularly audited. Tax-free offshore bank accounts are opened in the name of offshore company, and are operated in the same manner as mainland or onshore bank accounts.