An expat, or expatriate, is anyone who is not currently living in their native country. If you’re an expat, then you probably live and work overseas. That means that you’ll also need to consider banking offshore.
Offshore banking can be different for expats, because you might reside in the country where you want to bank. Fortunately, there are plenty of advantages to doing exactly that.
Take a look at the benefits of offshore banking for expats, what you’ll need to know, and what it takes to get started.
Having Access to Your Local Currency
For some expats, one of the biggest changes will be getting accustomed to using, spending, and thinking in a whole new form of currency. If you live in America and spend U.S. dollars, then it might likely be a big change to use Euros in Germany, for example.
Every time you make a purchase, you’ll need to convert the amount in your mind to know what your local purchasing power truly is. It can get even more complicated for expats who are paid salaries in one currency and then pay rent, bills, and shop in another currency.
For a lot of expats, it is important to maintain a bank balance in their preferred local currency. This can make a lot of things easier, especially when it comes to paying bills or shopping on a day-to-day basis. It also limits the number of times someone needs to mentally convert one currency to another in their head before making a purchase or withdrawing money from the local ATM.
Making Investments Locally
Not all expats are in a new destination only for short periods of time. Many expats love their adopted homes and may live overseas for many years or choose to retire there.
Finding a home in a new destination is exciting, and many expats want to set up roots in their new location and invest in the local area and economy. If you want to buy a home in your new country of residence, then it might be difficult to do so if your only bank account is halfway around the world.
Working with local banks, or even offshore banks in the same region of the world, may make it easier to get financing for major investments. Whether you want to buy a vacation rental on the beach, purchase an apartment in your favorite new city, or start a small business, having access to offshore banking is going to make the entire process far easier as an expat.
Destination Still Matters
One mistake that expats should avoid is assuming that all offshore banks are the same. One offshore bank can be completely different from the next, and the destination where a bank is located can make a tremendous difference.
To guarantee financial privacy and asset protection, for example, you’ll need to bank somewhere that offers those things. As a top offshore banking destination, Belize is an obvious choice for those who live in the country. However, it is also a top pick for individuals who live elsewhere around the world.
In short, location matters. Don’t assume that all offshore banks are alike, because they can be as different as night and day. Even if you’re a seasoned expat and you feel confident and comfortable in your new country of residence, it’s worth taking the time to research your options and settle on the offshore financial institution that can meet your banking needs.
Pay Attention to Local Jurisdiction Tax Codes
There are many good and valid reasons to bank offshore. One of the most common reasons that repeatedly comes up, is that banking offshore can reduce your tax burden in a substantial way. Typically, placing your assets offshore means that you’ll have fewer taxation requirements in your home country, and you’ll be under the tax codes where you bank overseas.
Keep in mind, however, that expats may be in a unique position. In some countries, the favorable tax codes are just for foreign investors. If you’re earning your money through a local company, and getting paid in the local currency, you could be subject to different tax codes. That might change if you’re paid through a multi-national company and your check is distributed from a different jurisdiction.
Whatever your situation, it’s important to learn more about what taxes apply to you depending on where you live, work, and bank. This is one reason it is vital to work with reputable and experienced financial advisors and bankers.
Make the Most of Your Offshore Earnings
Expats head overseas for several reasons. For some, it’s all about the chance to live and explore a new destination. For others, it’s an opportunity to increase earnings or decrease spending thanks to a lower overall cost of living. If you find that you’re earning more overseas, then it might be time to maximize your savings.
One very low-risk option is to place holdings into a lifestyle account. Through these accounts, expats are encouraged to save. That’s because the higher the balance of the account, the higher the interest rates will be in return.
Another popular option is to invest in local real estate or prepare for the next generation through the creation of an offshore trust. Whatever your goals and preferred risk level, offshore banking can help you maximize your offshore earnings and preserve your holdings as much as possible.
Opening an Offshore Bank Account is Easier That You Might Expect
There are things about moving, working, and living overseas that can prove to be complicated. The good news is that offshore banking doesn’t have to be one of them. In fact, opening an offshore bank account is often easier than many people realize.
Since offshore banks must follow FATCA (Foreign Account Tax Compliance Act) regulations, if you’re an American citizen, you will be required to verify who you are and where you live. There is a process to be followed and you want to make sure your bank of choice understands current regulations.
Many expats share certain personality traits such as flexibility, curiosity, and financial acumen. When choosing a location like Belize, expats can have the ideal setting for living their best lives while satisfying their need for adventure, more diverse financial opportunities, and much more.
Through Caye International Bank, expats can enjoy the convenience of secure, online banking as well as the benefits of working with a leading, award-winning offshore bank. Its location on the beautiful island of Ambergris Caye, Belize is a popular destination for many expats.
Contact Caye International Bank today to discuss your banking needs with one of their experienced financial experts.