Perhaps the era of offshore banking is over – for illegal purposes, that is.
The recent data from OECD (as of 30 October 2015) reveals that 96 jurisdictions have committed to adopt AEOI (Automatic Exchange of Information) – an international cooperation of information exchanges for tax purposes. 56 jurisdictions are undertaking first exchanges by 2017, while the other 40 will do so by 2018.
The list leaves only a few decent jurisdictions that will uphold account privacy and secrecy at the highest level – probably some countries in Central Asia and Africa.
So, should you bank in those regions? Maybe. Maybe not. The thing is, there are some key considerations that you should pay attention to when choosing a jurisdiction. One of the main keys is the accountability of the offshore banks.
Are the banks in the jurisdiction fundamentally strong? Are they managing clients' money well – and responsibly? Are they well-audited and having strong reporting standards? Those are several of the questions that you should ask the bank officers and your consultant/lawyer.
Indeed, with the right information and true intention, you can legally use offshore banking as a great solution for better wealth management and asset protection. Now the big question is, where should I bank offshore?
Attempting to aid you in your search, we compiled a mini-list; here is a list of five emerging offshore banking jurisdictions that you should learn more about in 2016.
Without further adieu, here's the list.
1. New Zealand
If your asset protection strategy includes currency diversification, then offshore jurisdiction like New Zealand can be a good choice.
New Zealand is a jurisdiction that's located in the Pacific Ocean. The breathtaking landscapes and modern, developed market economy make it a destination to travelers and investors alike. It ranks fourth in the Heritage Foundation's 2012 Index of Economic Freedom – a testament that the country is economically formidable.
Not generally known as a destination for offshore banking, New Zealand is actually one of the best in the world when it comes to bank interest rates. There are emerging currencies offered by NZ's banks that offer the-unhead-of 18 percent interest rates. If foreign currencies are not your cup of tea, there are several foreign banks in NZ pay 5-6 percent of annual yields on US dollar accounts (source).
Throughout the history, Malta is known as an important naval base, which is why it's seen the changes in rulers – Roman, Moors, Knights of St. John, French and British. As a result, the country features fortresses, temples and other historic point of interests, making it a great Mediterranean travel destination.
Malta, boasting a sound and efficient financial system - ranked #20 in the world for strength of auditing and reporting standards by the World Economic Forum, is promoted throughout the world as a jurisdiction for banking & finance and insurance, which makes it an ideal place to secure your wealth. It's considered as a low-tax jurisdiction – if you are interested in tax benefits of going offshore.
Offshore private banking account is available at a minimum of EUR 25,000 (source), and you can open an account remotely in some situations – please check with the bank for better information.
The island-country in South East Asian region continues to be an emerging jurisdiction especially from people from outside the Asian region. Unlike another top Asian offshore jurisdiction, Hong Kong that prioritizes on clients from mainland China, Singapore adopts the open door policy: it is open to clients from all over the world.
The recent crackdown on offshore banking in Singapore somewhat affects the country's banking sector, but with more and more countries are committing to the OECD's cause, you don't have much choice. Singapore remains the region's top financial center with a reputation that's unheard of: Not a single bank in Singapore failed.
Dubai continues to be a trending offshore jurisdiction as it emerges as a global city and business hub in the Middle East. With a diversified economy that no longer reliant on oil, Dubai established itself as a financial center, tourist destination, and trade hub.
Not generally friendly for personal purposes, Dubai is the go-to place for offshore company setup. You can establish an offshore company via Ras Al-Khaimah (RAK) - as well as opening a bank account in Dubai, allowing you to establish your entire business operations in Dubai.
5. St. Vincent and the Grenadines (SVG)
Perhaps the most underrated of all mentioned in this list is St. Vincent and the Grenadines (SVG). Located in the Carribean, it's often mistakenly as yet-another-offshore-jurisdiction. The reality is far from that.
Offshore banking in SVG offers you more than tax benefits and asset protection: You can invest in precious metals, as well as the ability to trade in foreign exchanges. This is something that's well-sought-after and add considerable value to clients.
It's challenging nowadays to find offshore banking services that are truly private. While you may enjoy the secrecy and privacy offered by jurisdictions other than those that are committing to OECD, the offshore banks' accountability and liquidity are often questionable.
That said, it's a misconception to go offshore for the sake of tax benefits. There are plenty of other legitimate benefits that you can take from opening an offshore bank account at a certain jurisdiction: Multi-currency support, investing opportunities, securing your assets in politically and economically-stable jurisdiction, and many other benefits.
Before you decide on anything, always do your due diligence and consider to contact a trusted lawyer, as well as a consultant. To get started, consult with us for free on any topics about offshore that you can think of.
Read also "Hidden costs of cheap offshore company formation"