You run an online business; does your primary income come from outside your home country? If so have you considered offshore banking?
Most of what I will be talking about here is in regards to Hong Kong. However, there are other locations and options to consider which we will briefly touch on.
What is offshore banking
Most will think of Swiss Banks, Shady Business, African Dictators, Money Laundering and Tax Evasion. While it may have been true in the past, today offshore banking is a legitimate form of banking something worth the investment.
Simply put it means you have a bank account in a country other than that of your residence, often in a location that has a low tax jurisdiction.
Why bank offshore
Most expats (a person residing in a country other than their home country) have a bank account in their home country to cover and manage any financial commitments they may have. Like me, if you do live in another country, you also need a bank account in that country to cover things like your utilities and shopping. Offshore Banking provides easy access to your finances and a central location for your money.
If you do have an online business and a significant amount of your income comes from international transactions the advantages of using offshore banking become apparent.
What are the benefits of offshore banking
• Choice of currencies; many offshore banks offer multi-currency accounts. Having a multi-currency, account, means that, if your income is in say USD and you want to transfer to Euro or GBP, it gives you the flexibility to move funds easily to your home country. More importantly this enables you to hold the moneys and transfer between currencies as the value rises or falls creating more income.
• Specialist advice; most offshore banks have advisors available to you who can help you with investments and exchange solutions.
• Tax efficiency; banking offshore can be a tax efficient way to manage your money. Hong Kong, for example, adopts a “territorial source principle of taxation”. Meaning that all profits generated outside of Hong Kong are tax-free, and profits created inside Hong Kong are taxed at a low 16.5%.
• Protect your money in an economically stable and central location
Offshore banking Locations
There are many so-called Offshore Banking locations around the globe; from Mongolia, Gambia to Ukraine, do these sound like stable, safe locations, to bank hardly. While they may offer high-interest returns sometimes in excess of 20% the chances of you getting your money out are slim.”
There are places considered to have a history as stable, safe banking locations; you will think of Swiss Banks, and you are correct however they are out of reach for the majority of us.
Safe, offshore banks often are available to be opened with a minimum deposit, and are often accessible in your home country. Meaning you don’t have to get on the first plane with armloads of documentation and meet the bank manager.
Some key locations include,
Interested in banking offshore, do you want more details on banks and locations; you can do a search online or contact me for more information.
There are many offshore banks available from large multi-international corporations to national banks, right down to family owned private banks. While there is a vast array of options, we will look at just a few International Banks as these are accessible to everyone.
• Deutsch Bank
• Standard Chartered
• Credit Suisse
All this is just a small list; there are many more that offer safety, economic stability and security in a stable location with excellent returns. Interested in a more comprehensive list do a search online or contact me for more information firstname.lastname@example.org
Offshore Banking and US policy
The face of Offshore Banking is changing especially for US citizens. With the Foreign Account Tax Compliance Act (FATCA). Other nations i.e. European Union and Australia are signatories to agreements assisting the US in enforcing and will possibly adopt similar policies for offshore banking of their citizens.
Foreign Account Tax Compliance Act (FATCA). Originally passed in 2010 that took effect in July 2014, is creating a new level of scrutiny of foreign bank accounts held by American citizens and including Green Card holders. International, financial institutions are required to report information about their US account holders to the IRS.
For more information about compliance with U.S. laws, you should seek legal and financial advice from someone experienced in these types of transactions.
Need Advice on Banking Offshore
Having incomes from different locations and depositing this in offshore accounts gives flexibility with your finances, are you serious about learning more.
I will be posting on this subject and more, including setting up an offshore corporation.
Contact me, and I am more than happy to assists you in your endeavors to expand your business globally and tap into the advantages of operating offshore.
If you found this article of helpful, please follow us and leave a comment below.
About Darren Wilkins
Darren is a semi-retired senior executive and serial entrepreneur who runs a number, of successful businesses both online and offline.
With 30+ years experience in management and as a management consultant Darren has a can-do attitude and offers real practical advice that can be used for any business no matter the size, Darren is using his time focusing on online opportunities and building better businesses.
With global experience managing and directing multimillion-dollar mega construction projects and businesses. Darren has a wealth of practical experience to share and wants to help you and your business.