offshore banking

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Offshore banking

The problem
Financial predators roam the Earth, greedily seeking easy gain. They feed off the wealth and energy of productive people. Wealthy and prosperous people attract the most aggressive financial predators. Financial predators instinctively chase the easiest target. The target could be an individual with a large bank account, stock portfolio, or real estate portfolio. Yes, it is a grim, treacherous and unfair world and always has been.

But there is hope.

If financial predators instinctively chase the easiest target, then the simple solution is to become a difficult target. The most difficult target is an invisible target.

Move it offshore
The harassed and exhausted citizen can become less visible to tax locusts, two-faced neighbors, serial divorcers, and litigation vampires by transferring funds to a bank located outside his country. Such a bank is often called an offshore bank. An offshore bank can act as a temporary safe-haven allowing the financial prey to catch his breath. If the citizen exchanges his funds for a healthier currency, he can even elude inflation bogies.

Become preemptively “paper poor”
Even smarter, before troubles arise, is to have some wealth stored offshore in a healthy currency. Having a portion of wealth hidden away reduces the scent of wealth, tempting the predator less. Imagine the predator, eyeing official income statements, balance sheets and tax documents in search of a big cash cow. Now imagine the client only has a fraction of his net worth visible making him appear poor. The client is a skinny cow. The predator will most likely move on, seeking fatter prey.

Goals of offshore banking
If it is not yet obvious what the goals of offshore banking are then we will make it clear. The primary goals of offshore banking are to increase privacy and to reduce taxation. By increasing privacy, the offshore banking client becomes less attractive to financial predators. By reducing taxation, the offshore banking client becomes immediately wealthier. The secondary goal of offshore banking is to allow the offshore banking client the option of diversifying currencies, thereby slowing inflation.

Choosing an offshore banking center
Offshore banking centers arose as a means to increase privacy and reduce taxation. The first step toward greater privacy and reduced taxes is to choose an appropriate offshore banking center. Offshore banking centers are characterized by the following: 1) strict privacy laws; 2) low or no taxation. Examples of offshore banking centers are Switzerland, Singapore, Monaco, Luxembourg, Brazil and the Bahamas. Note that offshore banking centers are offshore, only for non-residents of these locations. For example, Brazil is a banking center that is offshore for non-residents of Brazil and onshore for residents of Brazil. You should choose an offshore banking center primarily for its privacy and taxation laws. As a secondary consideration, you might want to choose a location that you will enjoy visiting.

In the last few years larger governments have pressured some offshore banking centers to expose private client information. An example is the United States pressuring Switzerland to reveal information about American Banking Clients. Such pressure should be expected to continue in the future; therefore, choose an offshore banking center that will not give in to this type of pressure.

Choose an offshore banking center that is politically neutral; make sure the banking center has plans to remain politically neutral. Likewise, choose an offshore banking center that has a history of economic stability and will remain economically stable.

Choosing an offshore bank
After you choose the offshore banking center, you can choose the offshore bank. Here is a quick list of criteria for choosing an offshore bank: 1) financially sound; 2) not based in the client’s home country; 3) no history of revealing client information to authorities; 4) no history of employees stealing and selling client information to authorities; 5) has the services that the client wants.

It is important that the particular bank does not have its home office in the client’s home country. Such a bank would have too many ties to onshore authorities allowing for the easy exchange of private client information.

Ask the bank what the reporting policy is for earned interest. Many banks pay interest directly to the client without deducting tax, leaving the reporting to the client. Such a policy is to the advantage of the client and the bank.

Services offered by offshore banks
All services that are offered by onshore banks are offered by offshore banks: savings accounts, checking accounts, credit cards, debit cards. Other advanced services such as broker and custody services for stocks and funds are also available. The client should choose an offshore bank that has the means to allow him to fulfill his goals.

Conclusion
Move a portion of wealth offshore before any onshore problems arise. Once problems arise, it is often too late to act. By moving wealth offshore you will be less attractive to financial predators. Choose offshore centers and banks with integrity and a spotless history.