Offshore banking is not dead – regardless of what the media want you to think it is. Sure, there are roadblocks that are making things difficult for someone to bank offshore, but there is one thing that you need to be aware of: Offshore banking is perfectly legal, and the roadblocks are – in essence – designed to limit the tax evasion done by some big companies and money laundering done by some fraudsters, criminals and everything in between.
Unfortunately, the rules and regulations also mean that an average person will also have a limited access to offshore banking. It's a given. But no worries, as knowledge is power: Knowing what you can and can't do in taking your currency offshore can set you free.
This article will take you by hand to the world of (unfair) banking and financial system, and why offshore banking will continue to exist and serve customers, despite all the pressure and misinformation that surround it.
The case for taking your assets offshore
Remember Cyprus? Greece? Or, way before that: Germany? Zimbabwe? Politically-aside, we all know what financial turmoils can impact the citizens of a country.
Queuing for ATMs. Queuing for buying bread. Worthless bank notes on the street, lying around like garbages – literally. (Very) expensive groceries. Confiscation. Riots.
Any of those happens when a financial meltdown takes place. Along with the regulations that limit you from protecting your own assets (how taxing your saving account sounds?), those have caused the declining global trust on banking system (and financial system in general.)
How bad is the decline? According to this survey, 50% of Americans lack trust in the US financial sector; More than 70% don't trust the financial sector in the Eurozone. How about in developing countries? They share a similar trend: A growing lack of trust in the financial system.
Greece crisis: Can something similar happen to my country?
Maybe. Maybe not. The answer depends on how trusted your government and financial regulators are.
One disturbing question is, if something similar to Greece happened to your home country, what would happen to the currency in your bank account? Other than the possible devaluation, the other catastrophic events would include the lockdown of your bank account. Just like what happened to the bank account holders and pensioners in Greece. And the crisis hasn't ended just yet.
To give you some ideas, here's what a locked account can 'offer' you: You can't withdraw cash from your safe deposit box; you are limited in your ability to withdraw your cash and/or do transactions with it; you can't take your money to other countries, let alone to an offshore jurisdiction.
The quest for stability
A bank account in an offshore jurisdiction, like St. Vincent and the Grenadines, can help you protect assets in several ways: Better privacy, lower taxes and stable political/economic environment – to name a few. And yes, you can access those legally.
Those features and benefits matter simply because everyone wants to protect his/her assets in a stable country. Moreover, everyone wants a full access to his/her own asset, anytime they want. When an uncertainty happens in your home country, your ability to do those is put at risk.
Offshore banking services – as the place for asset protection, as well as the so-called tax havens will continue to exist, whether you like it or not. The world needs offshore banks for one simple reason: The banking systems need a good “sparring partner”, and offshore banks are great sparring partners for onshore banks.
Known for their flexibility, favorable policies and wealth of products to offer to account holders, offshore banks are allegedly better than the offshore counterpart. To keep assets from flowing out to offshore jurisdictions, your local/national banks need to step up in their service and product offerings. A good competitive environment can improve the quality of products and services across the board.
With that said, we believe that offshore banks will continue to serve clients from all over the world. And, as long as your local/national banks can't guarantee full access to your assets, everytime, there are chances that your bank will give up some control to your financial regulators – for the sake of the stability of your country.
If you are truly considering offshore banking, I recommend for you to consult with your trusted legal advisors. If you want some professional advice on your eligibility, requirements and options, you can consult with us for free.
Good luck in your financial planning endeavors!