| Opening an offshore bank account is a matter | | | | offshore bank loans. Companies will be afforded |
| which should be discussed in detail with a financial | | | | the same rights of privacy as an individual account |
| advisor such as Estate Street Partners and | | | | holder, and they will be allowed to finance their |
| possibly a lawyer, depending on your individual | | | | operations at a much more reasonable rate than |
| circumstances and reasons for wanting the | | | | if they kept strictly domestic accounts. |
| account. There has been negative press involving | | | | Since offshore banks are not government |
| owners of offshore accounts who abuse the | | | | regulated to the same extent as domestic banks, |
| bank services to launder money or commit other | | | | they can offer a wider variety of investment |
| forms of fraud (tax evasion, hiding money for | | | | options to companies and individuals looking for a |
| divorce purposes, etc). | | | | higher rate of return than what is typically offered |
| CONS OR DISADVANTAGES OF OFFSHORE | | | | with US Mutual Funds. |
| BANKS | | | | HOW PATRIOT ACT, IRS, QUALIFYING |
| Offshore banks also require large sums of money | | | | INTERMEDIARY REQUIREMENTS AFFECT YOUR |
| as deposit, and there can be substantial annual | | | | OFFSHORE ACCOUNT AND PRIVACY |
| membership and maintenance fees if you don't | | | | One of the advantages of having an offshore |
| understand all the terms of the agreement. A | | | | bank account used to be the anonymity that was |
| knowledgeable advisor will help minimize your risk | | | | guaranteed with it. Unfortunately, following the |
| by informing you of any changes to domestic and | | | | terror attacks of 9/11 many offshore banks are |
| foreign banking laws. When choosing an offshore | | | | volunteering any information requested by |
| bank you have a number of banks to choose | | | | domestic governments if they suspect criminal |
| from, although the most common and sought | | | | activity. |
| after accounts are in Switzerland and the Cayman | | | | The Patriot Act allows authorities to actually seize |
| Islands due to their size and reputation. | | | | bank accounts and assets reportedly belonging to |
| If you feel that an offshore account is right for | | | | criminals. The Internal Revenue Service (IRS) has |
| your situation, there are several questions you | | | | also initiated the Qualifying Intermediary |
| should discuss with your advisor when selecting a | | | | Requirements which gives the government access |
| bank: | | | | to the names of all individuals receiving US-funded |
| 1. What services does this bank offer? | | | | investment income. Offshore banks are working |
| 2. How will you access your money? (check book, | | | | closer to authorities to adhere with stricter |
| debit card, etc) | | | | money laundering legislation, and these banks will |
| 3. Are there fees associated with withdrawing | | | | often volunteer information to police if there is |
| money from the account? | | | | questionable activity in your account. |
| 4. How easy is it to transfer funds, and is your | | | | IS OFFSHORE BANKING TAX-FREE? |
| money secure if the bank goes under? | | | | You should be aware that offshore bank accounts |
| ADVANTAGES OF OFFSHORE ACCOUNTS WITH | | | | are not tax-free. While you may choose to |
| GOOD INTEREST RATES | | | | withhold information from the IRS in an attempt |
| Many offshore banks offer personal services | | | | to escape paying taxes, you are under legal |
| similar to those offered by domestic banks. In | | | | obligation to report all income earned from foreign |
| addition to a regular savings account, you may | | | | accounts with the exception of an annuity. |
| have the option of a debit or credit card from | | | | You may not be forced to pay taxes to the |
| which to withdraw funds. Some countries will also | | | | offshore bank for interest earned on your |
| sell you a mortgage and offer loans from your | | | | deposit, and they may choose not to disclose |
| offshore account. | | | | financial information to the US government. |
| Since offshore banks are not regulated in the | | | | However, if it is discovered you committed |
| same manner as domestic banks, the interest | | | | perjury on your taxes the consequences will far |
| rate on your loan will be at a much more | | | | outweigh the immediate benefits of evading |
| competitive rate than here in the United States. | | | | taxes. With stricter laws being enforced due to |
| The offshore banks are competing for business | | | | threats of terrorist attacks, and the rise in money |
| which will hopefully bring revenue to their country, | | | | laundering for drug rings, it will become increasingly |
| and with lower overhead costs than domestic | | | | more difficult to hide funds in offshore accounts. |
| banks they are able to offer higher interest rates | | | | Consulting with a financial advisor may help you |
| on deposits. | | | | avoid legal problems associated with a poorly |
| COMPANY BENEFITS IN OFFSHORE BANKING | | | | planned offshore bank account. Ideally, your |
| AND LOANS | | | | account should offer competitive rates of return |
| Large US-based companies are also taking | | | | for your investments, competitive interest rates |
| advantage of the benefits associated with | | | | on loans, security, and confidentiality. |