Offshore bank account is very easy to open nowadays and preferred by many people. The advantageous transactions carried out by banks established in such places compared to other banks are called off-shore banking. The places where such banks are established are generally places where the tax burden is very low, bureaucratic procedures are at the lowest level, and supervision is either absent or rather weak.
Judicial review is also low profile in these places. Most offshore banks provide their customers with all the facilities provided by banks, such as offshore bank account opening, deposit accounts, giving loans, transacting on foreign currency, providing fund management, issuing credit and debit cards, and transferring funds.
What is Off Shore Banking
The reason why especially developing country citizens prefer coastal banks in various parts of the world is the high political and economic risks in their own countries. On the other hand, the fact that offshore banking is not covered by the deposit insurance valid in the country causes another risk.
In recent years, international cooperation has been increased in order to remove coastal banks from the structure that embraces illegally obtained money. In this context, anti-money laundering regulations are increased, the issue of bank secrecy is redefined for these purposes, and the obligation to share information is further strengthened.
The best known centers for opening an offshore bank account are: Bahamas, Panama, Bermuda, Liechtenstein, Cayman islands, Bahrain, Andorra, Guernsey, Isle of Man, British Virgin Islands.
Why Should People Open Accounts in Offshore Banks
There are many answers to this question, but the most well-known ones are listed as follows:
- To reduce the degree of political risk to the assets of individuals and institutions (the places where the coastal banks are located are defined as the places where the political risks are low and offshore bank account online is a great way to keep your balance in check.)
- To provide confidentiality to the earnings or wealth of individuals and institutions. (Two types of secrecy may be involved: first, hiding the asset from the state, secondly, hiding it from family or relatives.)
- Desire to protect earnings and wealth against lawsuits (offshore bank account can protect earnings and wealth held in coastal banks in lawsuits such as compensation lawsuits that may be filed against the person for any reason).
Protecting your Confidentiality
Despite such advantages, in recent years, new regulations on coastal banks have resulted in these banks having difficulty in protecting the confidentiality issue as much as before. These applications started to lose their old feature, especially after the attempt to reveal the secret accounts initiated by the USA against Switzerland yielded results. From 2017, Switzerland will have to abandon the old secret account creation practice. This arrangement will inevitably spread to the onshore banking centers in the future.
Leaked documents and information (Panama documents) from the law firm Mossack Fonseca, which provides consultancy to individuals and institutions that have entered offshore banking in the past, led to the emergence of unregistered accounts and transactions of many well-known individuals and institutions.
This development caused the confidence in offshore bank account and banking to be shaken. It seems inevitable that much stricter regulations regarding offshore banking will come into force in the coming period and this practice will gradually lose momentum.
Offshore on Global Scale
The rapid transformation of the world into a global place and the increase in internet use at an unprecedented rate have had positive results in terms of obtaining information about many subjects. In this sense, a person who has received basic education has the ability to do research on offshore bank account meaning without the need for the help of others.
Professionally, many individuals are able to conduct their own research. Technological developments have made the world even smaller. Now, a citizen can easily open an offshore bank account wherever they want. Especially the widespread use of the internet and smart phones has provided very good opportunities for the banking sector. In a way, they have brought their services to a level that billions of people can reach with one click thanks to the internet.
Naturally, this had positive results in terms of the customer-mass relationship of the sector in question. Many countries around the world have implemented offshore account practices because of the offshore bank account interest rates.
Offshore Account, How To Open İt
The first of these is the purpose of opening an account here. In other words, the person may settle in a country other than the country of citizenship to which they are legally bound, or he may benefit from the opportunities offered by that country in accordance with its own laws. This situation is guaranteed in each country’s own constitutional order. Therefore, a person can establish legal relations with another country if they wish. In this sense, offshore banking is a completely legal institution.
The biggest factor in choosing offshore banking and an offshore bank account is the tax laws applicable in the country where the bank account exists. In this way, while you are a taxpayer in your own country, you are either exempt from tax in another country or you pay very small values even if you are a taxpayer. In this sense, the responsibility of individuals wondering how to open an offshore bank account is extremely limited.