Choosing an Offshore Bank

The common perception is that offshore banking is meant for wealthy individuals, but the reality is that almost anyone can open an offshore bank account.  Most institutions have minimum deposit requirements, but these vary from bank to bank.  US citizens, in particular, must declare any amount over $10,000 as well.  Till today, many people prefer traveling to the country in which they will be opening an offshore bank account.  However, accounts can be set up and money can be wired via telephone or e-mail.

Choosing an offshore banking institution depends on personal circumstances.  Prospective account holders are encouraged to do their due diligence in order to choose the best offshore bank.  While there are many countries offering offshore banking, individuals opt for the most common ones which include Switzerland, Singapore, Luxembourg and the Cayman Islands.  Below is a brief overview of offshore banking in these four regions.

Swiss Bank Accounts

The primary benefit of having a Swiss offshore bank account is privacy.  Switzerland is known for its secrecy, which drives most people to opening an account in this region.  Swiss bank accounts function just like American accounts, but certain matters such as taxes, bankruptcy and divorce are held private.

Cayman Islands

Offshore banking in the Cayman Islands is generally targeted to corporations and the banks only identify you according to your corporate name.  Cayman banks do not report deposits or any interest on the deposits.  However, Cayman banks have enforced stronger regulations due to recent pressures for the US.

Singapore Accounts

The incentive to opening an offshore bank account in Singapore is taxation.  Singapore has the lowest tax rate in Asia and interest is often tax free.  Not only do Singapore account holders save money on taxes, but they are also investing in a fast growing economy and protecting their money by allowing local experts to handle the investments.

Luxembourg Accounts

While banks in the locations above are quite flexible when it comes to setting up an account, banks in Luxembourg have a few restrictions.  First, you must obtain a reference from your current banking institution.  Second, you must provide an explanation on how you will be using the money in Luxembourg.