Why Offshore Bank Account? The Basics
No matter how intriguing it may sound, an offshore bank account is a regular account opened in the foreign bank of different jurisdiction from your domicile country. The reasons for opening an offshore bank account can differ but in the most instances they are used for achieving greater privacy, better protection against financial and political instability in your home country as well as tax savings. Internet banking, debit and credit cards have made accessing offshore bank accounts and withdrawing funds from them extremely comfortable and discreet. Offshore accounts can be in principle divided into personal accounts such as savings, deposit and investment accounts used to yield better returns than corresponding bank accounts in the country of your residence and corporate accounts that are also used for international business transactions.
It is convenient and easy to open an offshore bank account. Usually it does not require a visit to the country of the bank's residence as it can be done via internet, e-mail, phone, fax and post correspondence. However, in the most banks you will be required to provide a proof of identity (copy of your passport) and a signature. Some banks (e.g. in Switzerland) offer the so-called anonymous accounts (numbered accounts) to their clients but here you will also need to provide a proof of identity. Numbered accounts are then identified only by their code number whereas your personal identification data such as your name will only be known to a very limited number of people in the bank. Your data will not be disclosed in financial transactions and will not appear on bank statements.
Although many adversaries of offshore banking argue that offshore banks lack strict government regulation and bank supervision, this argument can hardly hold water in days of looming global financial crisis. Just think of Switzerland (and its recent currency appreciation) or Monaco or Liechtenstein. On the contrary, offshore banks are less exposed to government abuse and have a lower cost base (due to strong deposit financing) and many have existed for a hundred years or more. In times of current economic turmoil they present a good opportunity to diversify your funds and increase returns on your financial assets. So, why offshore bank account? - In order to achieve greater privacy, security, flexibility and freedom when handling your financial affairs that should ultimately help you maximize your economic gains.