Is Offshore Banking Legel?
Is Offshore Banking Legel?
This is one of the frequently asked questions about offshore banking, and in short, YES, offshore banking is legal. Offshore banking is so legal that, it’s always going to remain legal. Offshore banking is a benefit to all of society and is indispensible. Using offshore banking for tax evasion purposes is what is not legal, and that is usually what is associated with offshore banking in general and is the cause of the misconception. Offshore banking is also associated with criminal activities such as money laundering. This article will clarify the distinction and examine why offshore banking will remain legal.
The term offshore was originated from the British Channel Islands, tax havens located literally offshore from the United Kingdom. Now the term is used to refer to all tax havens whether islands or not. Technically, just moving your money from an account in your country of residence to another jurisdiction is considered offshore banking, even if it’s not a tax haven. This is the main reason why offshore banking will always be legal. How can it be illegal to move money from one country to another?
Individuals and businesses, large or small, and even governments all have the need to move money around the world. If moving money from one country to another was illegal, our global economy would have serious problems and i don’t see how we could make it. We are constantly ordering items from eBay and some do so from other countries. People use Paypal accounts to transfer funds when ordering online. Governments are involved in import export activity and have to pay for it somehow. So again, no one can stop you from taking your money to another country; it is a legal and everyday process that will remain that way.
The thing that is NOT legal is banking offshore for tax evasion. Depending on which country u reside in, it is usually illegal to take money out of the country or making money overseas and never submitting it to your country of residence or declaring it. as stated, this depends on your tax status and country of residence. For instance, in the United States, the federal government requires all citizens to declare all taxable assets regardless of where they are located in the world. Failing to do so is committing a criminal offense. There are ways around this though, such as expatriating for certain amount of time to save on taxes. International companies can also reduce their tax burden through using a slick network of offshore bank accounts and IBCs. And another thing to keep in mind is that a lot of countries don’t charge income tax on money earned out of the country and brought in. They also don’t tax interest earned on accounts.
So, if US citizens and UK and European citizens can’t even save tax through offshore banking, how can it be beneficial?
Saving on taxes is not the only advantage of using offshore banking accounts. There are many other benefits, including but not limited to:
-Optimized account Privacy
-Protection from aggressive litigations
-More competitive account structures ad interest rates
-global access to your money
-Ability to bank in multiple currencies
-Access to global business opportunities
And not to forget that those who reside in countries with corrupt or unstable economic systems have the opportunity to bank in an economically and politically stable jurisdiction.
