Recently while searching the web I found a post on the Offshore Bank Account Golden Rules. Whe I took a close look at them I thought they we re rather interesting and very true. What I did not like about them was the lack of information provided about why the rules were so golden in the first place. I took it upon myself to look over the rules and provide a real life explanation as to the “why” behind these golden rules.
The Golden Rules of Offshore Bank Accounts are as follows:
1. Never tell anyone you have an offshore account. The less others know the less they have to tell about you. For example, if you were to win the lottery and you did not share with others who for some reason or another think you should share with them, that individual could become very negative towards you. The individual will most likely go out of his or her way to create unwanted grief. One of the first things to pop out of that person’s mouth would be “He has an offshore bank account and he does not pay taxes!”. The less others know about you the safer you are.
2. Never transfer funds to/from your domestic account to/from your offshore account instead use an offshore trust account. In some cases this is true and relevant and in other cases this is a dangerous and difficult. The mentality behind this is that the paper trail will lead back to you and by using a trust account you can actually eliminate that paper trail. One of the most important things to take into consideration is that offshore trust accounts are not run by banks, but by financial services companies. They are not protected by law and they are loosely regulated by governments. What goes into these accounts does not always come back out. Since regulation is sparse there may be serious issues with such a service. Since offshore banks are required to maintain operations a secret it can be just as safe if not safer to deposit directly on the account.
3. Never send an offshore wire to pay for things in your home country, instead use an offshore trust account or cash from your ATM card. Depending on the operation this is true. One thong you need to keep in mind is that you can be linked to your account by making a wire into the country where you live and then in turn NOT paying the taxes for said funds. Should you need to wire finds into an account in your home jurisdiction, it is advisable to pay the required taxes on the funds in order to avoid potential taxation issues.
4. Never use your offshore debit card at a location where you are well known IF IT HAS THE OFFSHORE BANK NAME ON THE CARD. It would not be a smart choice to pay for postage at the post office or pay your car inspection with an offshore debit card if the name of the bank is on the card. In most cases offshore banks do not have their name on the card or the card dies not have any information on the front of it to alert the business receiving the card to the origins of said card. I think we all can agree that most cashiers could care less as to where the card originated and they are more focused on their next smoke break than anything else. If they get nosy just tell them it is a gift card you received from a friend or family member.
5. Never use a domestic address for your offshore debit card billing address – many banks will let you send it to a different address outside your country. In most industrialized nations where the mail is a major source of communication, there are governmental agencies as well as offices which monitor mail. The US and Canada are well known for their mail fraud monitoring agencies. It would be very easy for a governmental office to get access to all of your incoming and outgoing mail. It is recommended to use your online banking access to review your account.
6. Always ask the offshore banks to hold your statements and do not mail them to your home. Depending on your country of residency as well as those who live with you, it make be a good idea to have the bank either hold statements or have them forwarded to a third party address where you can retrieve them in a secure and anonymous manner. Often times those who deliver the mail and those who check the mail are nosy as well as quick to cooperate with others if the circumstances should require such. Most offshore banks will hold statements or not issue them at all. All one needs to do is request the service and it will be provided.
7. Always choose a company account over a personal account. Offshore Company Incorporation is the key to adding privacy and security to an offshore bank account. Having an account in your personal name will require that you claim such account according to most international tax laws in all industrialized nations. Wires going in and out of the account can easily be recognized and traced when they originate or terminate in the name of an individual. An Offshore IBC is the key to a greater level of financial privacy and it allows the end user to remain anonymous before the rest of the world.
As you can see the Golden Rules to opening and maintaining an offshore bank account are relatively simple when followed. They will provide the the highest level of privacy as well as secrecy and allow the end user to benefit from all of the features an offshore bank account has to offer.