Offshore Banking: Is it Safe?
Keeping your financial interests and property in offshore banks and accounts makes sense for those who have assets to protect. When we speak of offshore banks, we mean banks as close as the Bahamas, Bermuda or as far as the Isle of Man off the British Isles.
Banking in the Bahamas these days means you must fly or cruise to Nassau and visit the bankers personally. There are legitimate businesses however, who have established longer-term relationships with the banks in the Bahamas. If you open your accounts through one of these businesses you will find that it is still possible to open one through the mail and/or telephone calls and faxes. Banks no longer open accounts with faxed banking applications. Originals or at least certified copies are the only forms that are legitimate and acceptable today. It\'s important to keep in mind that every offshore bank today has tough \"due diligence\" rules and procedures. Tough client screening procedures are now normal. Prepare to tell your bankers what you do for a living and be prepared to show your id to prove who you are. If you can\'t do this or are unwilling to do this, then forget about opening a traditional offshore banking account.
People often worry about confidentiality when conducting business with banks located offshore or native offshore banks. These are valid concerns. The answer to this question of confidentiality and privacy and asset security is that they are \"usually\" protected by the banking jurisdiction\'s \"statutes\" - within a Confidentiality Ordinance or an \"Act\".
Confidentiality always plays an important role offshore. The strongest protection you can get today remains in Anguilla, the British Virgin Islands, and in fact, all of the other tax havens. The rules in most jurisdictions today still protect you against IRS fishing inquiries, seizures, liens, freezes, or investigations of offshore bank accounts. This includes the assets of offshore companies that are registered in Anguilla, Bermuda, The Cayman Islands, the Bahamas, Panama and several other tax havens.
This has been true especially during the past ten years or so. Of course, you should not depend only on strong privacy laws when if you begin offshore ventures.
American taxpayers must become familiar with IRS reporting requirements- the most important of which is - Form TD-90.22-1. Get this form from the IRS\'s website. An American with a \"financial interest\" in an offshore account, is treated very differently by the IRS than an American with \"signature authority\" over a foreign company account. You must read and understand the instructions on this IRS form before you make an intelligent decision.
Never go into an offshore venture blindly or out of desperation. Learn all you can about the laws. Don\'t be taken in by so-called offshore tax consultants. Learn for yourself. Do your homework. There is a wealth of information available from the IRS and from international experts such as Marshall Langer and Tom Azzara.
Offshore banking and property and asset protection can be done quite successfully in offshore tax havens and banks. But it must be done correctly and by walking the straight and narrow path required to do it legally.