The Essentials of Offshore Tax Havens

As you can imagine offshore tax havens are very popular these days.  Raising taxes by governments to handle their own budget crises have been felt across the globe. The result is a strong interest in the prospect of using an offshore tax havens.  At its most basic level, these banks are in offshore locations with a low tax jurisdiction.   

Here are some of the tax benefits you get to enjoy with an offshore account.  Some of this information could change, so be sure to consult with an International Wealth Manager before making any final decisions. 

• Interest earned is not taxed – Any interest gained from your offshore account is all yours with no deductions. 
• Most offshore income is not taxable – However, this option depends on your country of residence as there are a number of exceptions. 
• No death duties, inheritance tax or capital gains taxes are taken – Certain jurisdictions like the Channel Islands do not charge taxes on capital gains, death duties or inheritances. 

However, these are not only reasons why one might choose to open an offshore bank account.  Many companies that do business in and/or with other countries all over the world use offshore banking for investing and privacy reasons.  They benefit by having not only a tax haven for their business but also more flexibility in their investing decisions. 

Offshore banking is also a safe haven for people living in a country where the economy is falling into ruins or their banking industry is corrupt.  Banking in offshore accounts gives them a way to save themselves from considerable loss as well as providing them with offshore tax havens. 

If you are thinking of banking offshore, there are some things you need to know before you decide to do so.  First of all, there is usually a minimum deposit amount for opening an offshore account that can range from $5,000 to $25,000 as well as a monthly fee depending on the offshore company that provides financial services you use.  Also, the privacy policies and taxation jurisdictions vary.  It is best to open an offshore bank account in a country that is economically and politically stable in order to benefit from the safe haven you are seeking. 

A good rule of thumb to follow before you engage in offshore banking is to get a guide that outlines each unique offshore haven and offshore tax havens so you understand what you are getting into before you open an offshore account.  Essentially you want to make sure you are looking at safe havens that are completely independent of a large country (a sovereign nation) so that there is little to no government involvement in banking regulations. 

Using these tips can help in sure you not only find some nice offshore tax havens, but banks that offer all the benefits you seek for you or your business.