Offshore Banking

Offshore Banking, of course depends on your view point. One persons offshore bank may be another persons neighbourhood bank.

For instance, to the Americans, the United Kingdom is seen as an offshore banking centre, and to many, many multi-national companies, being registered in the UK allows them to take advantage of the United Kingdom business tax allowances which may be more attractive than their own countries tax regime.

Essentially then, offshore banking involves the establishment of an offshore bank account for an individual or a company located located outside the country of residence of the entity (company or individual) funding the bank account.

Offshore banking, in addition, frequently involves some kind of anonymity, privacy, financial and legal advantages.

Whilst the common view may be that offshore banking is essentially used for tax evasion, there are also advantages (all totally legal) for an individual or company to run an offshore bank account, if for instance they own and manage property in the off shore jusrisdiction.

Other advantages of offshore banking include lower costs - particularly if the offshore bank is established in a developing country, possibly more political and financial stability compared to an onshore account in ones home jurisdiction, interest may be paid without any deduction of tax leaving tax liabilities up to the client.

A major disadvantage of offshore banking can be that the offshore bank is remote and physical access to the offshore bank can be difficult or impossible. This is much less important in the modern high-technology world where online communications and online banking can make distance and remote banking viable.

As a dis-incentive to using offshore banking, the European Community has introduced the Savings Tax Directive which is a with-holding tax applied by the banks at source within the European Union.

Look at the offshore banks page for examples of banks that maintain offshore services for customers.

Offshore Banks.

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