Learning Center
Plans & pricing Sign in
Sign Out

Offshore Banking for the Average Person



 Offshore Banking for the Average Person

 Offshore bank accounts frequently make us think of very wealthy people trying to
 avoid taxes. But the truth is the average person can open an offshore bank account quite
 easily. Doing this can be financially prudent, too, even if you're not rolling in money.

 Regardless of whether you have $10,000 to deposit or $100,000, offshore accounts
 can be significant tax advantages for account holders who make foreign investments.
 Usually this involves setting up a foreign corporation. There's also much greater
 privacy; in many jurisdictions there are favorable laws to protect the identity of
 account holders.

 These accounts can also provide excellent asset protection; assets held in foreign banks
 can be extremely difficult to seize. Commonly, wealthy persons facing lawsuits
 transfer assets offshore.

 All offshore banking jurisdictions have their own laws and regulations; you'll need to
 do some research to see which one best meets your needs. And keep in mind that the
 tax laws around foreign accounts are tightening all the time. Uncle Sam always wants
 his money.

 Offshore Account Requirements

 Offshore accounts are usually somewhat expensive to set up. The minimum required
 initial deposit can be quite high. However, there are options for those without a big
 bank account.

 In addition to your initial deposit, most offshore banks require these items to set
 up an account:

   1. Identification documents. The basic requirements are really no different than
      opening a bank account in the United States. You'll need to provide the basics
      like name, social security number, driver's license or passport, and address.
      Also, be ready with the real thing; notarized copies of your documents are usually

           These banks are quite serious about verifying your actual address since
           there may be tax implications. Of course, this depends on the country in
           which you live.

   2. Current bank statements. Offshore banks may require that you submit your
      last 6-12 months of statements from your current bank. They're also likely to
      ask you about the nature of the transactions you're planning on making.
      Offshore banks are under increased pressure to avoid supporting illegal
      activities, whether knowingly or unknowingly.

   3. Choose a currency for your account. Unlike at your local bank, you'll have to
      choose a currency. This can be advantageous if other currencies are currently
      stronger than the US dollar. There can also be additional taxes imposed on
      interest earned in accounts held in a foreign currency. Be sure to talk to your tax
      advisor first.

Deposits and Withdrawals

Deposits to your offshore account can only be made by international electronic wire
transfers from a local bank. Domestic checks are generally not accepted and
traveling around the world to deposit cash is impractical. Check local fees for these
transfers before you choose a local bank to provide that service.

Withdrawing money, on the other hand, is quite easy.Most banks will issue a
debit/ATM card that can be used anywhere. Some offshore banks will provide
checks, but these are unlikely to be accepted as a form of payment in most situations.

One other practical consideration for withdrawals is to have a local bank account and
use the same international wire transfer method you use for making deposits. This
provides the best of both worlds, since you can move large sums of money around via

                                   wire transfers and withdraw smaller amounts with your ATM card.

                                   Could an Offshore Account Benefit You?

                                   Though there's a lot of glamour and mystique around offshore bank accounts, you
                                   can see that acquiring one is largely similar to opening a regular bank account down
                                   the street. There are some additional steps to ensure that you don't have any
                                   criminal intent, but that's one of the only major differences.

                                   Of course, you'll have to select a currency and decide on the best method for
                                   handling deposits and withdrawals. This will take a little research. But the small
                                   amount of work involved may be worthwhile if an offshore account satisfies your
                                   financial needs. Investigate your options today. You may be surprised at how
                                   beneficial these accounts can be.


Powered by TCPDF (
Curtis Rose is an experienced professional with extensive experience in all
aspects of personal finance. Curtis writes and publishes articles, courses,
guides and special reports on his personal finance blog. Sign up for his
monthly personal finance newsletter and receives tons of free information
that you can use to help you reach financial freedom.


To top