| When you think of offshore bank accounts do | | | | political and economic history, you want your |
| you see shady characters carrying around bags | | | | money in a safe place. The government could |
| full of money? Todays modern bank legislation | | | | impose foreign exchange restrictions or there |
| does not allow banks to accept cash deposits | | | | may be a bank run. A coup detat may make your |
| or transfers of US$ 10.000 and up without | | | | money inaccessible. |
| presenting proof of the source of funds. | | | | |
| | | | Non-residents usually pay minimal or no taxes |
| All serious establishments will ask you to | | | | on interest or profits from investments. |
| fill out forms known as KYC or know your | | | | Depending on your citizenship, country of |
| customer. Find more KYC information here: | | | | residence and if you use an offshore company |
| This is not only to be able to give you | | | | as the account holder you may still have to |
| better service but to protect themselves in | | | | pay taxes. |
| case you are accused of money laundering. | | | | |
| These forms also allow the bank to know your | | | | Many large international banks have branches |
| sources of income. Knowing your cash flow the | | | | or are incorporated in tax havens. To be on |
| bank will not ask you to prove the origin of | | | | the safe side, you would probably be better |
| the funds every time you make a transfer. | | | | off not using a bank that has branches or is |
| | | | incorporated in your country of residence. |
| Even though you have filled out a KYC form | | | | |
| the bank may or may not at its discretion | | | | American citizens must file an annual tax |
| allow you to start a relationship with them. | | | | return no matter where they live and include |
| | | | offshore holdings. Starting July 1st, 2005, |
| Whats the difference between your local bank | | | | tax havens which are British dependant |
| and an offshore bank? Basically any service | | | | territories, will apply the European Unions |
| you will get locally will be available | | | | Saving Tax Directive of 2005. Initially this |
| offshore. Then why open an offshore account. | | | | is 15% on returns of savings paid to |
| | | | nationals of EU Member States. Corporations |
| Offshore banking is no longer a handy way to | | | | are exempt from this withholding tax. |
| conceal income from illegal activities or | | | | |
| unreported business profits. | | | | Always consult a tax specialist who has |
| | | | experience with the jurisdictions involved |
| There are many justifiable monetary reasons | | | | before starting your offshore tax journey. |
| to open an offshore bank account. As a | | | | You do not want any costly surprises after |
| resident in a country with an unstable | | | | you open offshore company and bank account. |