It's interesting that Swiss banks also hide their assets from the Swiss by using offshore bank structuring.
- Julian Assange
The offshore banking refers to the deposit of funds by a company or an individual in a bank that is located outside their national residence. Although the term implies that these banks are located on islands, many offshore banks are found in Cayman Islands, Bermuda, Luxembourg, the Channel Islands, Macau and Panama.
The advantage of offshore banking is that funds are tax exempt, where the banks are located. Offshore banks offer the same services as domestic banks and frequently they offer more anonymity (greater secrecy) than "onshore" banks.
Some of the financial and legal advantages:
- Greater privacy
- Little or no taxation (i.e. tax havens)
- Easy access to deposits (at least in terms of regulation)
- Protection against local, political, or financial instability
The offshore banking has often been associated with the underground economy, organized crime, tax evasion and money laundering.
Basic requirements to open an account:
The basics of opening an offshore bank account are similar to opening a bank account in your home country. Offshore banks will ask for your personal information, such as your name, date of birth, address, citizenship and occupation. Like your passport, driver's license utility bill and bank statement. Many offshore banks ask about the nature of transactions expected to take place through the account.
The bank will also ask documents depending upon your business activity.
- If you have significant funds from a business or real estate transaction, you may need to provide sales contracts or other relevant documents.
- If you are depositing funds from an insurance contract, you may need to provide a letter from your insurance company.
- If your money comes from an inheritance, the bank may ask for a letter from the executor of the estate testifying to this effect.
- If the money is from your job, a wage slip from your employer.
How to Deposit Funds:
The offshore bank accounts are most often funded electronically through international wire transfers. Its very simple method.
How to Withdraw Funds:
Many offshore banks issue a normal Credit/Debit/ATM card that allows you to easily access your funds worldwide. Some offshore banks offer cheque. However, cheque is usually not a preferred method because problems may arise since cheques are drawn on foreign accounts are not always accepted locally.
The best option may be to use two accounts. One offshore and one domestic. In this way, electronic wire transfers can be used to transfer larger amounts of offshore funds to a domestic account where they can be easily accessed.