The Principality of Andorra has been designated an offshore financial centre by the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD) and the Financial Secrecy Index (managed by the Tax Justice Network).Read More Offshore banking in Andorra
Welcome to globalfinances.net. Your guide to the world of offshore banking.
The term offshore banking is associated with negative connotations. Many associate the term with tax fraud, drug lords and organized crime. These connotations have a certain connection to reality. It is true that criminals can use offshore banking to hide their ill gotten gain. It is also true that offshore banking can be used to facilitate tax fraud. But this part of the industry is only a very small part of the offshore banking industry. There are plenty of completely legal reasons that an individual might want to use offshore banking. Some of the most common reasons to use offshore banking includes.
Many nations that offer offshore banking have very strict privacy laws. This guarantees that nobody knows how much money you have or where it is unless you want them to. There can be plenty of reasons why you do not want anyone to know about your assets even if they are legally acquired and taxed. Reasons to keep your wealth a secret can vary from personal preference to a matter of personal security if you live in a country where your family might be at risk if people know that you got money.
It is safer to keep money in different jurisdictions and different countries than it is to keep all money in the same country. If you have all your money in one country you risk loosing all or parts of it if due to war or rapid political change. Event such as these can lead to hyper inflation or the seizure of funds. By keeping money in offshore locations you can minimize the damage you suffer in an event like this since you make sure that only a part of your assets will be affected at any one time.
There are plenty of legal ways to use offshore banking and offshore corporate entities to reduce your tax. Using these methods are 100% legal and you should not be afraid of using them until such time as the law changes. Do not use illegal methods to avoid tax using offshore banking. Doing so can save you a lot of money but can be very expensive if you are caught. You might even risk jail time. Using legal methods does not expose you to these risks as long as you stay updated on your countries tax code and adapt your strategies as the law change. Many offshore banking companies can help you set up legal ways to reduce your tax liability.
Offshore banking can be a good way to plan your estate. This is especially true if you live in a country where it is hard or expensive to transfer property to other members of the family. In this case in can be beneficial to keep certain parts of your estate offshore to make the generational shift easier. There are plenty of different banks that can help you set up a good plan for your estate that reduces that tax your children has to pay. A plan that is 100% legal in all concerned jurisdictions.
US banks are sometimes prevented from doing business with certain entities even if it is legal for you to use the service they offer. Examples of this can be if you are a poker player or if you like to trade financial instruments such as CFD:s or binary options using a broker that is not licensed to trade in the US. It can be easier to setup an offshore bank account that you can use to deposit and withdraw money from these entities. You can then transfer money between the offshore bank account and your regular US bank. This way you can avoid some of the hurdles you might encounter otherwise.
Many offshore banking countries offer very beneficial laws to anyone who wants to incorporate in that country. They require little administration and offer low tax rates. It is often possible to manage all administration online.
These were just some of the reasons that you might want to use an offshore bank. You might have other valid reasons to use offshore banking and you should not be afraid to explore offshore banking if you think it can solve a problem you are having.