The importance of asset protection in 2016 is understated. There are many reasons for securing and protecting your wealth offshore – here are five of them:
1. Uncertain economy and politics
The stock market crashes, the oil crisis, the terrorist attacks, the riots, the rigged job data, the political drama... no matter how hard you try to ignore all of those, you'll eventually need to pay attention, because those events will determine your future.
In the midst of uncertainty, it's only natural for people to find a wealth protection method as a hedge; just in case things go wrong, you'll have a safety net ready. One of the best ways to do so is by securing your wealth offshore. But why?
Here is one main reason: Although secrecy in offshore banking is (or eventually will be) dead, there is one major, undeniable 'perk' of having an offshore bank account - it makes confiscation difficult.
Asset confiscation – a legal seizure of your assets by your Government or public authority – is as real as Ukraine's banks' limiting access to account holders due to the high political tension with Russia. It happened in the past, and it could very well be happening again in the future.
When either bank account lockdown or confiscation happens, your local accounts are targeted first; that said, we need to clarify that although your offshore bank account is not that private anymore, it certainly be one of the last to track down and access, simply because it's under the law of a jurisdiction in which the account is opened; dealing with foreign legal matters would be quite complex. Here's an extreme example of what offshore jurisdictions can offer you – for better or worse.
2. Accessing offshore investing opportunities
Foreign markets are growing – especially those in Asia. In fact, some economists and experts believe that we are in the middle of a global wealth transfer from the West to the East. If you want to ride the wave, you'll need to establish a business presence in the Asian region, as well as to secure your assets in an offshore jurisdiction in Asia.
If you already have set up an offshore bank account, as well as protected your assets on the bank – or in a company set up in an offshore jurisdiction, it's easier for you to invest in foreign markets.
For example, if you have a bank account in St. Vincent and the Grenadines (SVG) or an offshore company setup in Ras Al-Khaimah (RAK) with the business address in Dubai, you can access wealth of investing opportunities (e.g. Trading in foreign stock markets, acquiring property investments, etc.) that are exclusively accessible to those who have a bank account in that particular offshore jurisdiction.
3. Stronger, more accountable banks
Some of the world's strongest banks are located in offshore jurisdictions, especially in the Asian region. Singapore banks, for example, is known for their well-built financial foundation; there wasn't even a single Singaporean bank that went bankrupt throughout the history of banking in the country. This is unheard of onshore (especially if you are talking about U.S. banks.)
What do the facts above mean? Well, it's only logical to secure your assets in a bank with stellar track records; if the bank resides outside your home country, it's worth the trouble to take your assets offshore.
4. Accessing (nearly) unlimited banking services
Typically accessible to high net worth individuals, private banking services feature excellent wealth management services, as well as those we-make-it-happens-for-you investment opportunities. However, high-net-worth is not a requirement for many banks in offshore jurisdictions.
For as little as US$ 500, you can setup a full-fledged offshore bank account. You can access a range of services, like online banking, wealth management, precious metal investing, multi-currency account, investing in foreign markets, and so on. This is unheard of when you bank onshore.
5. Diversify your currency
Diversification has always been the best practice for reducing risks – this also holds true with your asset protection. With the U.S. Dollar collapse predictions looming – including the possibility of USD losing its status as the world's reserve currency (even the state of Texas is silently prepared to launch its own currency if that happens), it's only prudent to hold your liquid assets in stronger currencies, such as the Singapore Dollar or Swiss Francs.
Going offshore can accommodate your diversification strategy: Many offshore banks support multi-currency accounts, which allow you to switch currencies of your account as per your request. Taking further than currencies, our offshore bank partner in SVG even launched an innovative service that allows your bank account to be denominated in gold or silver.
Going offshore today is not about avoiding and evading taxes, although those are popular reasons for setting up a bank account or company presence offshore. Instead, going offshore has become a solution for better-protecting our hard-earned assets.
That said, if you enjoy the freedom and possibilities that offshore banking is offering you, and you're planning to open an account, be sure to consult your next move with a trusted lawyer, agent or consultant. Although it's not as complex as it sounds, going offshore done wrong can be disastrous.
So, what's next? Read our blog and gain knowledge on what setting up an offshore company and/or a bank account can offer you. If you have any questions, don't hesitate to contact us – we offer free consultation to help you decide whether going offshore (or not going offshore) is the best decision for your case.
Read also "5 Offshore Trends for 2016"