Today, there are over 50 offshore zones located in different countries of the world. They differ from one another in business management rules and the level of protection of its owner from regulatory authorities.

In this article, we will consider the main advantages of doing business in offshore and talk about some of the nuances of this procedure. So, let’s go.

Who needs an offshore?

The main reasons making offshores attractive for business are:

  • tax planning, involving the creation of a special logistics scheme to minimize the tax burden;
  • assets rights protection, i.e., the removal of funds from the jurisdiction of the state, which is not able to ensure funds’ safety;
  • the ability to manage foreign assets, which is very important for entrepreneurs whose business is actively developing in various countries of the world.

However, everything mentioned above is just the tip of the iceberg. Let’s now look at the main advantages of registering a business offshore.

Advantages of placing assets in offshore accounts

Among the main benefits of depositing funds in offshore accounts, the following aspects should be underlined:

  • complete confidentiality of the ultimate beneficiaries of a business;
  • simplification of access to foreign markets;
  • minimization risks of losing the assets due to their (assets) separation.

From all of the above, we can conclude that offshore zones, first of all, ensure the security of the business and its owner.

Offshore jurisdiction: what is necessary to know? 

When choosing an offshore jurisdiction for your venture, the following aspects should be kept in mind:

  • if you have a China-oriented business, then Hong Kong or Singapore is perfect as an offshore zone. However, it should be considered that these jurisdictions are the most expensive of all possible options;
  • when trading with US or EU countries, do not opt ​​for Panama, Vanuatu, or the Bahamas. This is due to the fact that the financial transparency of such offshore jurisdictions leaves much to be desired;
  • if your business is subject to the previous paragraph, we recommend you allocate your assets in such countries as Cyprus, Gibraltar, or Maine. These jurisdictions will allow you to conduct international business without any problems.

As you can see, opening an offshore account is accompanied by a number of nuances that only professionals can know. Therefore, if you still have questions concerning your assets allocation in one of the offshore zones, contact our lawyer. Our specialist will provide all the information you are interested in, as well as help you to choose a jurisdiction according to your wishes and type of business.

Types of existing offshore accounts

When classifying offshore accounts, several principles are taken into consideration: who is the owner of the deposit, deposit purposes, etc. Depending on the identity of the owner of the money, there are:

  • Private offshore account. That means that the account manager is an individual. Moreover, these types of accounts can be managed not personally, but by proxy.
  • Corporate offshore account, drawn up for a legal entity, i.e., for the company that uses the account for financial transactions or profit.

It is also customary to classify accounts in offshore banks according to the purpose of using funds. Offshore accounts that are distinguished by this principle are:

  • Current. Usually, it is opened by offshore companies to use in commercial transactions to get profit. Having such an account, a company or an individual can use it to:
  • transferring money to another account;
  • benefit from interest on the remaining amount;
  • direct debiting, that is quick debiting of funds from this account, if there is an executed power of attorney, etc.
  • Card. The owner of this account receives a credit or debit card (depending on the terms of the contract) to use it. Any account is a card, because if many banks require a security deposit to receive a credit card, then a debit card will be issued to you automatically with the opening of an offshore account.
  • Savings. The most popular type of accounts. Most businessmen are looking for a reliable financial institution abroad in order to protect their savings. Any financial institution will pay interest on your deposit, the main thing is to find the most advantageous offer. Keep in mind that the longer you place your funds, the higher your profit. It is not worth taking the money earlier and terminating the contract since many world banks are fining customers who wish to close their offshore accounts ahead of time.
  • Operating. It is often opened by individuals or legal entities who need to make many different financial transactions throughout the day. Usually, requirements for the number of daily operations are not put forward, but it is better to find out everything in advance, since the bank can set its conditions for annual turnover, collateral amount, minimum balance, etc.
  • Transit. Its purpose is to secure the money of the client maintaining the confidentiality of transactions.
  • Security. It is most often opened for depositing a security deposit, for example, to receive a long-term loan or a card, if you have not previously been a client of this bank.

How to choose a bank to open an offshore account

Choosing a bank where you want to open an offshore account, you need to be very careful, having studied the various options and having weighed all the advantages and disadvantages of a particular financial institution. If your main goal is to reduce tax costs, you should keep your money in financial institutions of classic offshore zones, such as Seychelles, Panama, Belize, etc.

If you are interested in reliability, then it is better to choose the classical banks of Switzerland or Austria. Financial institutions of the United Arab Emirates can serve both purposes.

It is important to know about the conditions for opening the type of account you have chosen, the interest rate, etc. When choosing a bank to open an offshore account, be sure to pay attention to the duration of its work on the market (do not trust newcomers, even if they offer you incredibly attractive conditions for a deposit) and reputation (if scandals are associated with the name of the bank you like, then better to look for something else).

Got any questions about offshore accounts? Don’t hesitate to ask us in the comments section below this post! All records are anonymous.