Things You Need to Know About Offshore Bank Account

An offshore is the best bank account that one has in a country where she/he doesn't reside in.

An offshore is the best bank account that one has in a country where she/he doesn't reside in. Its primary purpose is to receive and make payments, open savings, keep money, and invest across multiple accounts.

Why use offshore bank accounts? 

Offshore accounts are commonly known as offshore savings or offshore bank accounts. They're majorly used to manage finances in different regions and countries. In addition, they’re important, especially when you need to receive, transfer or make international payments.

Most talented and experienced business gurus often have bank accounts in their home country and another one in the country they're residing in. Some prefer opening an offshore account because it's the most cost-effective way to invest, manage cash, and save abroad. Below are top-notch reasons to establish an offshore account:

·         An individual planning to relocate abroad to retire or work

·         A person already working or residing abroad

·         As an international assignee, you must move across different countries for work.

·         A person who makes frequent trips between countries specifically for the business

·         A person owing assets abroad like property or investments

·         You’ve a dear relative member living abroad who you support financially

Benefits of the offshore banking

An offshore account comes with multiple features and benefits. Here are some popular ones:

·         It enables investment and tax-efficient savings within numerous currencies. But remember, such tax benefits vary with situations.

·         It enables you to make, receive, and save money in numerous currencies

·         You can use one bank account for all your transactions

·         It helps you keep your fund in a central and secure place that is directly linked to your local accounts

·         You can flawlessly access international professional and investment tips at your figure tips

·         It comes with other banking features like mobile banking, debit card, and credit

Factors to consider when opening an Offshore Bank Account

Tax

Although offshore accounts offer a tax-efficient option, it's essential to disclose your income to prospective tax authorities and declare any interest earned on offshore accounts.

Costs  

Other offshore accounts charge a monthly or international fee on any transactions made. However, some don't charge any fee, like the HBS Expat Bank Account, which doesn't charge any fee between HSBC accounts. But you may incur other charges, so keenly scrutinize its terms and conditions before closing a deal with an offshore bank account officer.

Eligibility

It’s worth knowing that the actual amount needed to open an offshore account varies. Plus, you must be 18 to register the HSBC Expat Account.

The following are the eligibility criteria to join HSBC:

HSBC Expat Premier     

You should maintain a minimum of 50,000 pounds balance in your account

You must be earning a salary of 100,000 pounds

You must qualify for an HSBC Premier account in another county

HSBC Expat Advance

You must maintain a minimum of 15,000 pounds balance in your account

Security

According to financial statistics, offshore accounts are not secured by the Financial Services Compensation Scheme which often protects the savings kept in various banks around the globe.

Others are protected by legalized schemes. For instance, the Jersey Bank Depositor Compensation Scheme manages the HSBC Expat Bank Account that secures deposits of up to 50,000 pounds.

How can I open an offshore bank account?

The report indicates that the investment value and income earned from these offshore bank accounts can rise or fall based on various circumstances. So, there isn't any assurance you’ll get back the amount you invested.

That move can only occur due to changes in the currency exchange rates, especially where investments are converted from one currency to another.

In that regard, it's advisable to give your assets a grace period of around 5 years. However, the advantage is that you can get tax benefits in the long run.  

Remember, tax statutes differ from one region to another. So, if you’re not sure about your tax obligation, it's important you first seek legal advice before investing with them. As a wise customer, it's your mandate to ensure your tax obligations are achieved within the stipulated time frame.