If you were interested in the Panama Papers scandal, you must be curious about offshore banking. Since the Panama papers were leaked, the world has been confused about whether offshore banks are legal? Thousands of confidential offshore account documents being exposed and exposed to the world. The media has been calling out business tycoons and politicians as tax evaders and blamed them for earning money illegally. All these things raise questions in people’s minds; offshore accounts are legal. Because many international executive professionals open offshore bank accounts when they move abroad to transfer funds anywhere in the world. Besides, poorly financially regulated countries or countries with unstable government residents consider it safe to hold their money in an offshore bank account.
Key Takeaways about Offshore bank account
- Opening an offshore bank outside of your home country is illegal if it is done for legitimate reasons.
- Offshore bank accounts must declare the account owner name for tax reasons; however, some countries allow the holders to earn tax-free capital gains.
- Individuals can keep their money offshore in case of instability in the country or fear to lose their investment.
- Few foreign banks open an offshore account with a little amount of $300; however, it has been varying for different country jurisdictions.
In recent years offshore banking becomes notorious because the rice and famous politicians drag it through the mud with their tax-evading antics. It creates a few myths about offshore banking that explain the truth behind this that the media has made us believe in. In this article, we will explain five reasons why the offshore bank is legal in 2020, and it is not the whole truth which the media tell us.
Offshore banks are existed in far-flung world areas
Offshore banks are present all over the world. Some are situated in exotic places such as the Caribbean, which makes it easier for the businessman and politicians to keep their money secure, whether it is earned from a legal way or illegal way. However, it is not a valid reason to say that offshore banks are illegal in 2010 because they are also present in less exotic places such as Singapore, Isle of Man, and Switzerland. All of these countries are considered highly regulated and established jurisdictions with first-class financial reputation.
Use offshore banks to evade tax
This myth has usually favored the media when there is a high profile case of tax evasion, a deal was made, and cash was sheltered in an offshore place. While the reality is that the majority of offshore account holders are normal human beings who are looking for a convenient way to access their cash during their stay abroad.
Loaded an offshore bank account
There are many types of offshore banking accounts. When you hear from someone I have a Swiss bank account, it means an offshore account opened with at least a million rupees. Otherwise, an offshore bank account does not need a huge investment to open. Most offshore banks offer private banking services, so it is not odd if you are forced to pay more to open an offshore bank account.
Offshore bank account can not open remotely
To open an offshore bank account, you do not need to present it there. It does not mean you want to open an offshore account secretly. After fulfilling all the requirements, the chosen bank provides full details of their client and evidence of where all funds originate from. So, you can open an offshore account remotely.
Special Considerations for Offshore Accounts
There is nothing illegal in opening an offshore account if you have no intention of tax evasion. The Foreign Account Tax Compliance Act (FATCA) declared that all banks around the world report balances and any American national activity to the IRS. Even one U.S firm ensures that all account owners are legally reporting their foreign activity to their home country. To sum up, holding money in an offshore bank account is illegal if it is not done with tax evasion. Even if you have legitimate business reasons, you can keep your investments in secret bank accounts.
It is cleared that opening an offshore account is not just for wealthy people. Ordinary people open an offshore account with a minimum investment of $300. It is legal to open an offshore account in 2020 due to its presence in highly regulated and stable jurisdictions, as mentioned above. Anyone can open an offshore bank account if its financial situation is not stable and political unrest is there. Offshore bank accounts offer many opportunities to those who live or work abroad as well as keep their funds safe and secure.