Where to Open an Offshore Bank Account
An offshore bank account allows you to improve efficiency of international financial transactions. Despite the efforts of government and international business organisations in reducing the criminal activities, such as tax evasion, associated with offshore banking, it is still important to set up an offshore bank account in a politically and economically stable offshore jurisdiction. This can help to prevent any bureaucratic difficulties and tax haven stigmas. Choosing the right jurisdiction will optimize the benefits that come with such an account, such as tax efficiency, greater business freedom, protection of assets and ease of international operation.
Switzerland, which is the seventh largest bank center in the world, and the Cayman Islands, which is the fifth largest bank center in terms of deposits, have been two popular jurisdictions to set up an offshore bank account. Switzerland holds almost US$ 3 trillion in offshore bank accounts while the Cayman Islands holds an estimated US$1.9 trillion in deposits. However, there are a number of other jurisdictions that boast excellent reputations as financial hubs. These jurisdictions include Ireland, Dubai, Singapore, and Hong Kong.
Recent endeavours by western governments and the OECD in the fight against tax evasion has placed more attention on jurisdictions labeled as tax havens. Ireland does not carry a ‘tax haven’ stigma and is an attractive option for many American and other English-speaking entrepreneurs. The low tax rate of 10% is another incentive for people who would like to open an offshore bank account. To further attract investment, Ireland’s Shannon Airport Free Zone and International Financial Services Center in Dublin, also serve as tax incentives.
However, offshore bank accounts can also be safely and securely opened outside of Europe. Countries in the Middle East and Asia are benefitting from a migration of funds from west to east and provide excellent jurisdictions for opening an offshore bank account. These include Dubai, Singapore and Hong Kong. Dubai has emerged as a global financial center and holds an excellent business reputation. Dubai has great business incentives, especially the Dubai International Financial Centre (DIFC) that can be legally tax-exempt and encourages investment, corporate and private banking.
In Asia, Singapore and Hong Kong are the preferred offshore banking options for many international entrepreneurs and businesses. Hong Kong and Singapore are both regarded as the leading business hubs in Asia. They are also respected cities for conducting international business from, and therefore possess ideal offshore banking advantages.
Both jurisdictions have implemented international guidelines for tax related information developed by the OECD. First-class client treatment is also shown in Hong Kong and Singapore’s productive and skilled workforce, an added advantage for entrepreneurs looking to improve operational efficiency. Unlike Singapore, where the official language is English, Chinese and English are the official languages in Hong Kong. Therefore both jurisdictions make it easy for English speaking entrepreneurs to set up an offshore bank account.
With Hong Kong and Singapore regarded as the best locations for regional operations in Asia, opening an offshore bank account in either of these jurisdictions is an efficient international banking strategy. When considering opening an offshore bank account, it is becoming more important to choose a location with an excellent international reputation, investor-friendly business environment and economically and politically stable environments. Seeking professional advice can assist in developing a strategy that contributes to achieving overall business objectives.
