We have seen it many times in the past, and we have seen it again recently: A citizen of an ailing country can't access his/her own money due to financial crisis. This raises a big question: Why offshore banking solutions are underrated, given the potentially life-saving benefits it offers to the account holders?
Let's start with the current state of affair in Greece. Already in a crisis for years, Greeks haven't seen their worst: They are now in the critical moment of financial system collapse and the Government needs to do what many fear - the capital controls.
The capital controls are intended to stop the money from flowing out of the local banks and put the Greece bailout program into jeopardy.
So, what does the regulation entails? In essence, the capital controls imposed will limit cash withdrawals from ATMs to 60 euros / day / card. Greeks have seen long queues in ATMs due to this.
Not only that, you are not allowed to transfer your money out of the country, even by Internet and phone banking means. Many retailers, although not mandatory, were already rejecting local credit card transactions.
Political view aside, it's mind boggling that, due to one reason or another, you can't access your own assets due to events that is outside your control, such as your jurisdiction's financial problems.
It might be too late for Greeks, but there is one lesson learned from the whole situation: You can't rely on your Government to take care of you. Every and each one of you should take care of your personal finance. Governments will always try to limit your control over your assets by offering 'incentive' such as Superannuation Programs in Australia, 401K in USA and so on. How-ever, financial independence - true to the essence - is basically taking control of your own as-sets. It's only fair to do so.
So, how to take a greater control of your assets when your Government wants to impose their control over yours? There is one, underrated solution: Opening an offshore bank account.
Offshore banking's concept is quite simple: Instead of keeping your assets in your local banks or financial institutions, you opt for keeping yours offshore - outside the (limiting) laws and regula-tions of your jurisdiction and any other jurisdictions onshore.
Offshore banking offers plenty of benefits, but the best benefit of all is asset protection - the very reason why people should incorporate offshore banking into their personal finance planning. Alas, this is something that Greeks should probably do before the referendum
Is it legal to take your assets offshore? Yes, it's perfectly legal - but it's largely dependent on your intent: Are you avoiding taxes? Are you doing money laundering? If so, then everything you do - onshore or offshore, is illegal.
So, how going offshore can protect you from what Greeks have experienced today?
1. Your assets have no ties with your home country
When you open a private banking account in, say, St. Vincent and the Grenadines (SVG), you are basically bound to the law and regulations that are in effect in SVG. Sure, you might be still required to report for your gains depending on your own country's policy, but everything else is basically private.
2. Do transaction globally
You can have a credit/debit card that is accepted worldwide - regardless of your country of resi-dence - and your home country's financial situation - today. Not only that, you are free to do in-ternet banking transactions without any restrictions
3. Investing and asset management
When you invest locally, chances are, everything will be 'gridlocked' when your home country is in political/economic troubles. However, when you invest offshore in any forms - real estates, precious metals, forex, stocks, etc., your investment is in safe hands.
Regardless of your decision whether you are going offshore or not, you need to be aware that you should always play by the rule. Don't even think to take illegal actions for protecting your own assets, because it will put your personal finance into the gutter if you got caught.
With that said, offshore private banking can offer you safe and legal ways to protect your assets, as well as invest in assets outside your home country. At this moment, its importance is under-rated at best, and people are misguided into thinking that it's shady.
As always, before you take any actions, please consult with your trusted consultant. Alternatively, you can consult with us for an objective view on offshore private banking.