The recent reports have tarnished the reputation of private offshore banking even more, making it tougher for the long-standing top-class banking industry to attract new clients. The same goes to clients who are interested in opening an offshore bank account; it's more difficult today to open an account due to the increased pressure on the private/offshore banks.
The general public are not to blame, really. The negative sentiment is due to the questionable media coverage and misinformation. The recent survey results in the United Kingdom reflect this sentiment.
One of the UK's leading newspaper, The Times, has published a poll that asked readers for their opinions on why Britons might hold offshore bank accounts (Swiss bank accounts, particularly).
The results are interesting: 76 percent of respondents believe that people who open an offshore bank account do so for questionable reasons. Just 10 percent of respondents believe that people are doing so for legitimate reasons.
Such reports and survey results, although interesting, is showing the general public the big picture that indicates that offshore banking is illegal – which is a long-standing myth that needs debunking.
Made illegal ?
In the US, things are, in a sense, even worse.
The IRS makes it harder – if not illegal – for Americans to open an offshore bank account if not done correctly. However, that doesn't slow down the rate of assets going offshore. In fact, there is a growing trend in the US that shows more and more Americans are looking for ways to protect their wealth offshore.
The diminishing confidence in their home country's economy is one of the main reasons for the trend. According to this article, the demand for offshore asset protection services has quintupled over the past 10 years. The growth ? According to BCG Wealth Report, the projected figure is 6.8% until the end of 2018.
Those trends beg a question that is needed to answer: Why more and more people protect and invest their assets offshore, despite all the negativities surrounding private and/or offshore banking ?
Jurisdictional diversification for safety purpose
Beyond the tax benefits offered by offshore jurisdictions, the number one priority for people who decided to move their assets offshore is safety.
Perhaps the media should cover more facts that offshore jurisdictions are politically and economically stable. Jurisdictions like Hong Kong, Switzerland, St. Vincent and the Grenadines, and several other popular private offshore banking destinations are attractive because they offer something that your home country might not be able to offer: Stability, which directly impact the safety of your assets.
In order to spread the risks, people choose to diversify in term of where your assets are located and/or managed. This jurisdictional diversification is not only legal, it's a sound wealth management practice.
Of course, there are more additional benefits when you decided to use offshore banking solutions to manage your assets, such as lower tax rates (even tax exemptions), plenty of investing choices, and maintained privacy/secrecy. But asset protection is (or should be) the ultimate reason for you to go offshore.
Offshore banking is clearly legal. The general sentiments and perceptions are saying the otherwise due to lack of information – and misinformation. It is your job to dig deeper before you decide in taking your stance concering the legality issues – and make a well-informed decision.
Asset protection should be your number one priority, either for your personal or business financial well-being. Offshore banking can offer you just that.
If you have any questions concering the legalities surrounding offshore banking, please contact us for a free consultation.