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How safe is offshore banking?

For several reasons, offshore banking is a popular option for individuals and businesses around the world. This can offer great privacy, can help you reduce tax rates and also diversify your investment portfolio.

Offshore banking is perfectly legal

It is worth considering the legal aspects of offshore banking at https://offshorecitizen.net. Unfortunately, there are still a large number of myths surrounding this subject. It is very important to recognize that opening an account at a foreign bank is not illegal. You can do it safely, and there is no legal reason why this may not be an option for you.

Of course, he will not stay safe from a criminal process if he abuses the system or refrains from paying his taxes, but that does not apply to the vast majority of the account holders of foreign banks.

According to the LCFCE, or Foreign Account Tax Compliance Act (FACTA), US banks and account holders must disclose assets held abroad. It is a relatively simple process, a process that is done especially for the individual or the business owner. By complying with LCFCE, you can remain assured that your account abroad is fully legal. There are many, many reasons to have an offshore account, and many people have already chosen to explore these alternatives for their financial security.

Your personal assets will be more secure in an offshore bank

There are many ways to define security. If you want to protect your personal assets or those of your business, the best way is to safeguard them in a foreign bank.

If someone decided to sue you for either a major or minor cause, they could do a national search to determine or discover your assets. However, if they are abroad, they will not appear in the results of those searches. Sometimes, judgments are usually completely frivolous. If this is the case, potential lawsuits can be avoided once the claimant realizes that many of his assets are abroad.

In many foreign locations, privacy is a fact for account holders. If your local assets are frozen due to a divorce or a criminal case, for example, the US government. UU You can not take or freeze your assets in foreign bank accounts.

Even though nobody likes to think about a potential legal battle or a frivolous demand, it is better to prevent than to cure.

Your financial future will be safer if you diversify your assets

Another context in which to think about your security is through the financial lens. Many people assume that, if they place their assets in national bank accounts, their financial future will be insured, even though these local accounts probably do not guarantee such security.

Any investor knows that diversification is a critical part of any financial portfolio. Even so, many people keep all their assets in the same country of residence or in the typical savings or current account format.

The reality is that there is no such thing as an investment or a completely safe bank. Each time you place your assets in a new place, you are accepting a certain level of risk. However, there are some ways to reduce your vulnerability in these types of situations. One of the most effective ways is to diversify. This means encompassing industrial diversification, investment diversification, and geographic diversification.

While it is strange, it is possible that banking systems fall or that economies collapse. When that happens, those who can enjoy greater security are those who have assets beyond the borders. When conducting banking operations abroad, you will see that your shares are financially more insured than those who have not taken the time to adequately diversify their assets.

Better jurisdictions for an offshore banking license

While it is true that Offshore jurisdictions represent an almost essential opportunity for investors in the world, the truth is that their existence has become more complicated every time in recent years. This time I will tell you about the best jurisdictions in the world to apply for an Offshore Banking License.

The integrity of offshore jurisdictions recently underwent a notable crisis, specifically after the birth in 2010 of the FACTA law United States, which through the IRS pushed hundreds of small companies and offshore banks in the world to disappear. The crisis that eventually the offshore banking was victorious and as in any process of natural selection, only the organisms most apt to change survived.

The impact that IRS has had since the beginning of its frontal war against the OFFSHORE banks is clear since in its objective to monitor and prosecute the US taxpayers, the government of the country has mounted a huge and implacable tax and tracking structure that in 2012, many experts considered the OFFSHORE bank practically dead.

The reality at present is very different from what the IRS predicted, since the various offshore jurisdictions all over the world have aligned themselves with the FATCA initiative,   something that on the one hand has complicated the American taxpayers, bordering them to hide from the IRS, but that, on the other hand, has preserved and legitimized   the existence of offshore companies. Let’s say that in reality, the only ones impacted by the IRS war against Offshore Jurisdictions were the American taxpayers and the smaller banks, so much so that even many Americans are already giving up their citizenship.

The war has ended and after the alignment of the different offshore jurisdictions with the FATCA law, Offshore Banking is currently reinforced with new international regulations, its situation in general terms has improved, that is, that international business in Offshore jurisdictions is still highly attractive

Next, I will name the best jurisdictions to acquire an Offshore banking license.

Where to Acquire an Offshore Banking License?

Virtually all offshore jurisdictions in the world have the capacity to offer banking licenses, but there are notable differences among them that make them more or less convenient according to the needs and capacity of each society.

In general terms, the most attractive jurisdictions to grant offshore bank licenses are:

  • Andorra
  • Eel
  • Bahamas
  • Barbados
  • Bermuda
  • Belize
  • Alligator
  • Dominica
  • Lebanon
  • Luxembourg
  • Montserrat
  • Panama
  • Seychelles
  • Saint Kitts and Nevis
  • St. Vincent and the Grenadines
  • Republic of Vanuatu

As I commented, each jurisdiction offers alternatives and specializes in different schemes that depend on the target market since they are based on the client’s objectives. As the case may be, it is also important to consider the reserve capital of each jurisdiction, as this varies greatly. On the other hand, some jurisdictions require from 500,000 to 3 million for a banking license. The smaller banks require from 1 million to 7 million dollars, on the other hand, large jurisdictions like the one of Panama or Luxembourg can require from 30 million dollars to grant a banking license.

In general terms, some important considerations when thinking about acquiring an Offshore banking license according to your jurisdiction are the following:

  • Andorra and Luxembourg specialize in issuing licenses for large private banks
  • The Cayman Islands provide investment advisory services and issue licenses for captive banks.
  • Vantau grants licenses   to captive financial institutions and specializes in European companies.
  • St. Kitts and Dominica are governed by the regulations of the Central Bank of the Caribbean.
  • Belize is ideal for creating a bank that will promote deposits but it is important to consider that this jurisdiction works with high Capital Ratios.
  • Panama is one of the most advanced international financial centers since the personnel costs are lower, it has advanced communications infrastructure and enjoys a consolidated reputation worldwide.

Depending on the jurisdiction, the type of offshore banking license, or your business plan, The granting of a license has a cost that can range from $ 175,000 to $ 650,000 dollars. The business plan is fundamental in the application for a banking license since it has to contemplate several elements, such as a detailed business plan, anti-money laundering documents and a detailed board of directors.