We all hear about national leaders and businessmen operating offshore banking accounts and sometimes wonder why that is necessary. The reason is that there are many benefits of having an offshore bank account and the good news is that actually, offshore accounts are much more accessible today than before – creating a level playing field for ordinary people to have such accounts. No longer is this something that is just exclusively for politicians and power brokers!
What experts say about offshore banking these days:
- “Today, it is not only the ultra-wealthy who open offshore bank accounts but also ordinary people. Whether it is diversifying risk, better asset protection or simply to be better prepared, Belize is a trusted destination with a longstanding tradition in personal and corporate banking. In these turbulent times, we have a growing interest from people around the world and it is our mission to offer the best possible financial service to anyone who chooses Belize. We provide bank accounts where our clients can manage their deposits with 24/7 access from anywhere in the world.” (Luigi Wewege, Senior Vice President, and Head of Private Banking at Caye International Bank in Belize – as well as author of the book: The Digital Banking Revolution)
- Of the 7 major benefits of offshore banking, some are “…securing and protecting your capital…” and “…potentially saving tax on (your) deposits, savings and investments” which are absolutely essential and to “accessing international investment opportunities”. (Simon Danaher, AES International)
Benefits of an offshore account
An offshore account does not amount to tax evasion or any other illegal activity. It is simply a legal way to diversify political and economic risks by putting liquid assets in sound foreign banks and economies where they are treated well. Even if there is no immediate risk, there is no harm in putting savings abroad for reasons described below.
Reduced political risk
An offshore account, if opened in a safe banking region, protects savings from government’s grabbing hands or political upheavals in your local jurisdiction. Large deposits in a local bank can easily be seized by government to boost its own revenue through capital controls, bail-ins, bank deposit taxes, or retirement savings nationalization. It is therefore wise to open an offshore account in a very stable country.
Stronger banks and banking systems
Offshore banks in stable countries are fundamentally sound and they are backed by financially stable governments. Banking laws require them to keep high liquidity ratios so that clients can access their money whenever they want to. Conversely, in many countries, banks are highly leveraged, and they are backed by debt-ridden governments that always look for reasons to potentially make use of depositors’ money.
Asset protection
A foreign bank account, in a country that protects privacy i.e. does not freely disclose how much money a person has in savings will help reduce the threat of being targeted for lawsuits or asset-freezing by their local government.
Now more than ever people are at risk of losing their assets in the case of frivolous lawsuits. In the United States alone, 15 million lawsuits are filed every year and 80% of the world’s lawyers are found there because lawsuits are a major business nowadays. Also, if a person goes through criminal action and the court rules against him, most of his assets can be seized to settle any monetary awards. That can be financially devastating which some never recover from.
Once a government starts levying bank accounts or imposes capital controls, it is too late to protect your money. Even a small amount now in a foreign bank account is a good start with meaningful benefits. In future, when trouble starts, one should start transferring to that offshore bank account immediately before you cannot.
Currency diversification
An offshore bank account can help depositors to diversify their portfolio through holding various foreign currencies. This protects the investors’ purchasing power and internationalizes savings. Also, in the right jurisdiction, there are no exchange controls and accounts can be accessed via convenient online platforms.
Higher interest rates for deposits
Many offshore bank accounts pay significantly higher interest rates than what many people can find in their home countries. For example, in the West, the interest rates are either low or non-existent, meaning that depositors do not earn much interest on their hard-earned money. Meanwhile, these deposits are lent to borrowers who use them to make money and some of which save this offshore.
Easy access to medical care abroad
Having multi-currency bank accounts offshore enables depositors who fail to access healthcare in their home countries to access it abroad and pay for it. In many cases, even if a person has savings, exchange controls in their home country may make it difficult to pay for medical care in another country. It’s a matter of life or death sometimes and an offshore bank account can help in these situations.
Giving you peace of mind
A person with an offshore account can have peace of mind knowing that his or her money is safe from unsound banks, undesirable actions of a bankrupt government, economic disasters, political upheaval and frivolous lawsuits.
Increased personal freedom
A foreign bank account provides many options and that means more freedom from total dependence on any one country and government control. Should there be political upheaval in a person’s local jurisdiction, then if they have an offshore bank account they can then move to a safer place and live on these savings or start a new business.
Living in the digital banking revolution
Experts on digital banking, like Luigi Wewege, argue that offshore banking will be at the heart of new innovative solutions in Fintech and Digital Banking. Financial technology, is improving at a staggeringly quick pace and will have an impact on all types of banking, including offshore. Offshore banks are already making great strides to improve their online banking capabilities making offshore banking now much safer and more accessible than ever before.
Why Belize is a good option for an offshore account
Consider Belize. There are several attractive offshore banking jurisdictions, but out of all them Belize is the most ideal. It has been stable since it became independent, both politically and economically (the last major financial crisis hardly impacted the banking sector). People can open checking, savings, demand deposit or fixed deposit accounts with excellent interest rates. They don’t have to physically visit Belize to open accounts because they can send electronic copies of all required documents. They can also have access to their bank accounts any time of the day online through secure platforms.
Act now
As outlined above, an offshore bank account can be a prudent sensible move. However, it is becoming more difficult to open a foreign bank account, and for residents and citizens of certain countries, it will soon be impossible. In terms of preparedness, it might be better to act sooner even if you have no immediate plans to use that offshore bank account.
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