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Features of an offshore bank account

Frequently asked questions about offshore bank accounts

One of the initial questions that many people ask when they hear the term “offshore bank account” is that they mean by that? These are accounts that are opened in banks based in countries or territories that apply few or no taxes to individuals and businesses. They are usually small island countries whose tax regime attracts customers from the most developed nations; moreover, in these offshore jurisdictions, there is a total respect for banking secrecy. 
The jurisdictions most used and recommended by the experts to set up an offshore company or to open a bank account are Panama, Nevis, Belize, Cayman Islands, Dominica, Hong Kong, Jersey, Guernsey, Isle of Man, San Vicente and Liberia. 
Characteristics of offshore jurisdictions: 
– Low or no fees for individuals and non-resident companies. 
-Total respect for banking and commercial secrecy established by law. Most jurisdictions punish you with imprisonment or apply high fines in the event of a breach of banking secrecy. 
– Sophisticated financial and commercial legislation, since they need fewer requirements for setting up an offshore company and opening bank accounts. 
– There is no exchange control and there is great freedom in the movement of capital. 
– Poor banking regulation. 
– A very flexible legal system. 
-In these jurisdictions, there is great economic and political stability, in the interests of all parties to maintain peace and avoid problems that lead to a considerable flight of capital. 
– These jurisdictions tend not to sign treaties for the exchange of tax information with countries where high taxes are applied. 
– They have excellent telecommunications networks. 
-The staff of online banking services can speak several languages, including English, French, German, Spanish, Russian and Chinese. Open 24 hours, 365 days a year. 
Advantages of opening an offshore bank account and carrying out transactions abroad: 
(a) They allow more international business activities and broaden the diversification of investments. On many occasions, it is more profitable to make investments in the country where you do not reside, and where you usually pay high taxes. 
(b) Savings on taxes. It is therefore advisable to invest with your company from abroad because if you do it with the same company, in the country of residence, the tax burden increases. 
(c) Protection of property and the search for security and privacy. An offshore company helps settle divorce disputes, lawsuits, civil liability, prison threats. If you have assets associated with an offshore company, no investigator will be able to find them minimizing potential problems. 
What needs to be considered to choose the jurisdiction where to set up the offshore company and then determine the most appropriate for the offshore bank account? 
– Commercial activities developed abroad: business (purchase and sale), tax savings, whether the funds move or not, revenues for intellectual property rights, succession, life insurance, stock market investments, purchase of the real estate, etc. 
– Owned assets can depend a lot on when selecting the jurisdiction. 
The fundamental idea of ​​a customer who decides to carry out offshore operations is to pay fewer taxes, in an atmosphere of total privacy. Therefore, the first thing is to find a jurisdiction where there is the greatest banking secrecy, where there is freedom of movement, no exchange control, where there are reliable banking services, excellent telecommunications networks and low bank costs and the establishment of offshore companies. 
It is advisable to always consult with experts at Offshorecitizen before deciding the most appropriate jurisdiction for an offshore bank account. 
Examples of specialized jurisdictions: 
– Traditional banking centers: Switzerland, Luxembourg, Cayman Islands, Isle of Man, Channel Islands, Panama, Hong Kong. 
– Greater banking secrecy: Austria, Luxembourg, Portugal, Switzerland, Hong Kong, and San Vicente. The least secure are the Bahamas and Singapore. 
– Deposit of fortunes: Switzerland, Andorra, Monaco and the Channel Islands. 
– Intermediate Companies: Channel Islands, Gibraltar, British Virgin Islands. 
– Foundations: Panama, Austria, and Luxembourg. 
– Investment funds: Luxembourg and the Cayman Islands. 
– Insurance companies: Bermuda, Cayman Islands, Channel Islands. 
– Electronic commerce: Panama, Belize, Nevis, Isle of Man, Jersey, Cook Islands, Antigua, and Barbuda and Gibraltar. 
– Establishment of c Antigua and Barbuda, Bahamas, Dominica, Comoros, Cayman Islands, Samoa, Vanuatu, and New Zealand.

Some Precautions to Take to Open an Offshore Bank Account

Opening an offshore bank account is perfectly legal and you do not have to be multimillionaires. On the other hand, some precautions must be taken so that you can fully enjoy the advantages offered by the offshore bank account.

Anonymity less and less guaranteed

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In most cases a person opens an offshore bank account for his or her discretion and anonymity. The goal is to grow money without it being declared to the tax office. Today, this guarantee is less and less true. Many countries have accepted the AEOI standard established by the OECD, which concerns the automatic exchange of information between signatory countries.

Set up since 2017, the AEOI standard allows a signatory country to know the offshore bank accounts of its tax residents. In other words, opening an account in one of these countries no longer guarantees your anonymity. The list of countries that have signed the AEOI agreement is available on the OECD website , and this list should continue to grow in the coming years.

In other words, if you want to open an offshore bank account to enjoy greater anonymity , be sure to choose a country not present in this list. However, even when making this choice, bank secrecy is not guaranteed since many of these banks have signed tax information exchange agreements with many countries, including France.

Open a bank account on behalf of your offshore company

Open a bank account on behalf of your offshore company

The offshore bank account has less and less advantages since for most countries and banks, you are obliged to declare the sums to the tax authorities of your country of tax residence . However, this obligation does not yet apply to offshore companies.

Indeed, a bank account opened in the name of your offshore company does not have to be declared to the French tax authorities, unless there is an agreement between the offshore country and France. Tax optimization is therefore always possible for companies. This requires installing the company in a country where the taxation of profits is advantageous and open an offshore bank account in the name of the company.