Hi everyone, As someone who has been an international businessman and traveler for many decades I have always wondered why something like offshore banking which is advertised and is a product of most international banks like HSBC, Standard Chartered, ANZ, Barclays etc. is so widely misunderstood and confused by a lot of people. Many people feel that Offshore banking is only to be used by those who have illegal money or dubious money sources or else people who are evading taxes and are afraid or are being pursued by the government. As such, when the Holiday Home Times asked me to write a few articles, I thought I would start by telling people about the International Lifestyle I enjoy. Me and my wife are now Middle Aged – I founded a very successful company in the United States doing Mall advertising in the early 80s and sold it in the early 90s making enough money to be comfortable and pursue my passion – sailing. I am very active and continue to enjoy making investments and essentially my money works so that I don’t. I have learned a few things over the years that I felt I must share with you and so will be writing regularly for the Holiday Home Times.
First, I wanted to clarify the most important reason for opening up an offshore account – this is really the reason why I opened my first one. An offshore account by definition is an account that is not linked to where you stay and allows you to maintain the same account no matter where you move. This is the primary reason I feel anyone should have one – allowing for ease of travel and establishment of residency while maintaining a similar tax structure as you move around. For instance, my regular payments including my insurance, regular investment plans and my stock brokerage account are all linked to my offshore account. It also allows me to ensure I have a single point of compliance for tax purposes so that I don’t have to be worried every time I make an investment as it provides for me a single account statement that I can consolidate.
The second important reason I feel the globally mobile should have an offshore account is protecting your and your heirs privacy. We live in a world where increasingly due to social media, a lot of unwanted elements can easily have information about your assets making you and your children a soft target for blackmailers, kidnappers and extortionists. Banking offshore usually brings with it very strict privacy rules ensuring that only very few people have access to your account and are able to view who you are and other such personal details.
Thirdly, I find offshore banking useful for tax purposes. If like me, you are exempt from paying tax on your global income, it’s a real pain to keep track of the interest deductions by various banks and then file claims to get back your rightful money. Offshore banking with no deductions on interest income in my opinion is really the best way to manage this.
Lastly, I have found offshore bankers more sophisticated and as such easier to deal with as compared to my bankers onshore who really don’t get things like a trust, foundation, tax withholding etc. as they very rarely have to deal with a customer like myself.
So would I recommend offshore banking to everyone?
Definitely to the wealthy global traveler. I would however ask you to be careful about the following:-
1. The bank you deal with. I would recommend dealing with a global large bank like HSBC or Standard Chartered and one that allows you use of a debit or credit card linked to your account.
2. A location that you can visit every now and then. If you are in Asia like myself, I would recommend Dubai, Singapore or Hong Kong which all have branches of most of the large global banks with dedicated offshore teams and also have good airlines which make these cities their hubs (Emirates, Singapore Airlines, Cathay) – thus ensuring that you can always fly via these cities, enjoy a stopover and do some shopping while you visit the branch if needed.
I personally have enjoyed the freedom, flexibility and global mobility that banking offshore has provided me and I would encourage you to also look at your options.
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