OFFSHORE BANKING

easily facilitate tax planning measures. The letter of credit for both exports and import
purposes is the most important international banking tool in the business today, without it
trade international trade would be dead or non-existent.
International business of banking in offshore jurisdiction is becoming more and more
popular as: companies realize the benefits of an offshore bank account; as offshore banks
enhance and improve international banking services and products to be more competitive in
such an industry. Attractive business rates, tax management
Opportunities, and no taxation on capital gains, while cloaked in total privacy are just a few
of the very attractive features of international offshore banking.
A lower base cost of offshore banks translates into more affordable banking options, higher
earnings on investment. Offshore banking for international companies like Dominica
companies also benefits from greater access to international investment opportunities.
Domestic banks may not be willing to finance or fund international offshore activities or
business activities and in most situations to open a business account a credit history and
report is required as well as more comprehensive financial information. In order to establish
an offshore international bank account, no financial information is required from the
company, and hence the requirements are much more lax than on domestic market. Key
services offered by offshore banks for international banking purposes include:
Merchant services - accept global payments via debit and credit cards in multiple currencies.
Some domestic US companies will not accept international or non us credit and debit cards
with non US addresses, hence limiting the range of business to domestic markets.
Wire and electronic transfer in multiple currencies
Letters of credit and trade financing, loans
Corporate administration these and the other services offered by international offshore bank

Another advantage of offshore international banking is the anonymity with which the
international company can operate globally. An International Business Company (IBC) with
an offshore bank account is represented by a company name, rather than an individual with
a name and face, and if for some reason, the identity of the beneficial owners of the company
may hinder business relations; this is a good way to circumvent these challenges.
International bank accounts are especially valuable to persons who own and deal in real
estate globally. An international offshore bank account will give access to international
deposits; make payments with no questions asked about the source of funds. Once an account
is established it is confident that through its original due diligence that the source of funds

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is valid and legal activity, there should be no further question on the source of funds. The
purchase of real estate is considered taxable in some countries, however, if real estate is
purchased through an IBC which holds an account in an offshore bank, then some privacy
of transaction is guaranteed. The onus of declaring assets and earnings is that of the owner,
and the bank is forbidden to communicate any financial information on company accounts.
1.2.8 OFFSHORE BANKING SERVICES
Bank services offered by offshore banking establishment may contain the full range of
banking services whereas other onshore banks may have limited banking services. There are
generally two types of offshore banking services offered by banks:
Retail offshore banking services and
Private offshore banking services
All offshore banks operate in a like manner to onshore banks, the main difference being the
additional perks and benefits afforded offshore account holders such as tax exemptions,
confidentiality, more competitive interest rates, and no currency exchange restrictions.
Offshore banks are more like financial supermarkets specializing in offshore products,
services and solutions.
Obviously, every bank may not offer the same line of services or the same quality of service,
but the expectations, based on history are set and some conditions have preceded. Banks
where high net worth investment are standard tend to offer private bank services whereby
the services are customized and more exclusive suite of offshore services, such as personal
managers with 24hour personal access to senior bank management. Retail offshore banks
will offer the general offshore banking activity, and develop and improve their products as
is demanded by global banking trends, such as online banking, or e-commerce. What you
may not get from retail offshore banks is the customized and flexible banking services,
negotiated terms of interest, top level one-on-one service and enhanced wealth management
services.
Offshore banking services are designed for both individual and corporate account
management. Offshore banking services are bank specific but almost all offshore banks offer
a wide spectrum of banking services and other financial services, including offshore banking
advice.
Offshore banks offer the core corporate and personal banking services that facilitate global
trade and commerce, plus auxiliary service such as merchant services. Merchant service

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facilitates credit card transactions such as processing, reporting, fee payments and other like
services.
The offshore banks are normally located in offshore financial centres, or jurisdictions which
are tax friendly and have legislation that supports the advantages and benefits of the offshore
sector. Prior to engaging in any offshore activity such as offshore banking, offshore advice
should be sought from professionals and offshore service providers to ensure you invest in
the right offshore product, in a jurisdictions that benefits you best all while protecting your
every interest.
General offshore banks services include:
Deposits and Withdrawals activity
Term deposits
International credit and debit cards
Wire transfers and electronic transfers
Multicurrency banking free of foreign exchange restrictions
Offshore online or e-banking facilities

Some banks integrate corporate services and administration as part of the more complex
financial service, commercial banking role and include:
Money and investment management
Trade finance
Letters of credits, promissory notes (bank notes)
International banks, bankers draft, certified checks
Trade finance
Investment, and fund management - which will include stock and bond trading, other type
of security management.
Investment custody
Loans
Few banks services are complimentary and the fee scales for each service will differ from
one offshore bank to another offshore bank. An offshore bank usually charges money for its
services being offered.
The service extended by offshore banks normally functions under well regulated and
monitored environment.
Offshore banks are located in remote locations (most cases) and as such basic and in some
cases advanced banking services are offered over the internet through online banking. In
fact, many banks will accept application online, though this does guarantee the banks
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approval on application. Reputable offshore banks have secured and an advanced website
where the customers can access services, manage their accounts and remain in touch with
the bank.
1.2.9 DEVELOPMENT OF OFFSHORE BANKS
the aspect of
providing a tax haven or shelter for the ultra-rich has erroneously been attached to the term.
In time, the strict privacy and relaxed banking regulations of offshore banks made them an
easy mark for money launderers and tax evaders. Because of this unfortunate link, many
view offshore banks as a tool for unsavoury individuals to hide their ill-gotten loot or for
giant corporations to stash their earnings tax-free.

However, recent world events, such as terrorism and rampant international drug trafficking,
have affected offshore banking laws. These world-wide developments eroded the rigid

to conceal the true owner of an offshore bank account as it used to be. This has actually been
beneficial for the offshore banking industry. Criminals and tax-evading corporations now
find it difficult to hide behind the privacy screen once so conveniently put up for them by
offshore banks. Because of this, they are forced to find other ways of hiding their illegal
-paying individual who accumulated your assets the old-
fashioned way, that is, through hard work, you can continue to use offshore banks without
fear of recrimination.

1.2.10 BENEFITS OF OFFSHORE BANKING

1. SECURITY

In many countries, bank deposits do not have the same protection as you may have been
used to at home. By using an offshore bank, based in a highly regulated, transparent
jurisdiction, such as the Isle of Man for example, you can feel secure that your money is
safe. By banking offshore, you remove your wealth from threats such as these.

2. SERVICE

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Offshore bank accounts usually provide a highly personalised service, giving you round-the-
clock access to your money through online and telephone banking, seven days a week, 365
days of the year.

A relationship manager may also be assigned to your account, so you will always have a
personal point of contact.

The best banks offer the highest service levels, which can be appealing for expats who have
international financial obligations and opportunities.

3. CONVENIENCE

As an expatriate, being able to keep your bank account in one place, no matter how many
times you move countries, is a major benefit.

In fact, this reason alone is enough for many people to open an offshore bank account.

4. TAX

There can be expat tax advantages to using an offshore bank - but whether these apply in
your case will depend on your personal circumstances, such as country of residence.

Tax benefits can range from keeping your money outside of the tax jurisdiction of your home
country, to protecting it from taxes in the country in which you are currently living.

5. INVESTING

A good offshore bank will provide you with a wide choice of funds and investments that are
not usually available either in your home country or where you are currently living.

Investing through an offshore bank is straightforward, and there may be advice or tools on
hand to help you create an investment portfolio appropriate to your risk profile and the
outcomes you want to achieve.

6. FOREIGN EXCHANGE SERVICE

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With multi-currency accounts usually coming as standard, transferring money between

accounts will be fast and free.

And, if you need to transfer money between currencies, some offshore banks provide a
competitive foreign exchange rate, compared to a regular banking service.

This is one of the biggest advantages of offshore banking facilities for expats with
international financial obligations.

7. LENDING AND CREDIT

Depending on the bank you choose, some offshore accounts are basically a private banking
service - a benefit of which is that lending and credit facilities are often much more flexible
and tailored to your needs.

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