Though maintaining an offshore account is an ideal financial strategy for many, offshore banking often brings to mind misconceptions. There are plenty of reasons to consider offshore banking, so if you’re hesitant, don’t brush off an international bank just yet– make sure you’re informed.
Misconception #1: People Only Open Offshore Accounts to Evade Taxes
Tax planning is certainly one reason to look at an international bank but this is completely legal, and it’s certainly not the only reason. In most cases, foreign governments still have taxes applicable to an offshore account, so while taxes may very well be reduced, you can’t necessarily escape them entirely.
Misconception #2: People Open an Offshore Account to do Something Illegal
Though criminals do use offshore banking to their advantage – just like they use domestic accounts most people looking at an international bank have sound financial reasons in mind, from individuals interested in foreign investment to Fortune 500 companies to people who are simply sound financial planners. There are any number of ethical reasons to take advantage of an offshore account.
Misconception #3: It’s Only Worth it for Wealthy People
Offshore banking is often considered to be too costly or troublesome for the average person to set up. Some even think that an offshore account requires a prohibitive amount of money. This is simply untrue. While many offshore banks require a significant sum of money, at least as many can be opened for a few hundred dollars – comparable to the fees a domestic account.
Misconception #4: It Doesn’t Matter Which Jurisdiction You Chose, They’re All Alike
Not at all. Depending on your needs, the best country for you could vary tremendously. Though anyone would want strong confidentiality laws, political stability, and lenient tax law, the choice of your jurisdiction should go even beyond that and into the specific reasons a jurisdiction’s climate and legislation is the best place to keep your money.
Misconception #5: Offshore Banking Only Makes Sense for People Who Want Privacy or Fewer Taxes
On the contrary, an international bank makes a great deal of sense for people interested in foreign investment. An offshore account will open you up to markets you couldn’t access with a domestic account– no small boon. Offshore banking reveals plenty of exciting opportunities.
Don’t be hesitant because so many people are wrong about offshore banks. With some thought and planning, they can be a secure and favorable move toward a greater financial future.