The beginner's guide to opening an offshore account

To the uninitiated, opening an offshore account can be intimidating, and frightening, even, particularly as propaganda wars between public officials during elections threw shade on such investments.

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But the truth is, offshore accounts, if disclosed properly and done with a dependable banking institution, are a legally and financially sound way of protecting assets. Billionaires are advised by their wealth managers to open offshore accounts to shield their hard earned investments from financial instability. Multinational companies need them for cross-border business transactions. Expatriates apply for these so they can survive and do business in countries to which they decide to move.

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So how are offshore accounts opened? Investopedia and other sites lay down the basics: offshore banks typically ask for personal information, while a notarized copy of identification cards, utility bills, and similar documents are supplementary references. They could also ask for documents from the applicant's current bank that indicate good credit standing. Potential clients need to provide the bank with specific documents, such as inventory of assets, sales contracts, and the like, if the accounts are to be opened to satisfy real estate, insurance, and other international business transactions.

Offshore accounts can be applied for with or without the help of an intermediary, who is simply another entity who handles the paperwork and engages in most of the initial dealings with the offshore bank. Make sure to get a trusted and transparent one. An intermediary’s reticence or failure to disclose relevant information should be taken as red flags.

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However, future account owners should bear two things in mind. First, each offshore bank and each offshore jurisdiction has its own rules for opening and managing the accounts. For instance, some offshore financial services do not offer legal or tax advice, hence this must be obtained from an independent service. Examine the fine print with a team of experts in international law and wealth management experts to be spared from any headaches in the future.

Second, you must tread with great caution. Offshore banking, like domestic banking, is not completely safe from being used for illegal activity. Unusual banking activity, such as transactions that are extremely large, remarkably frequent, and not in line with the account owner's stated purpose could all be indications of fraud. The best line of defense: communicate all transactions with the banker to avoid being subject to scrutiny. Refer to this guide for safer offshore transactions.  

Breder Suasso is a company that assists investors in dealing with the particularities of offshore investing. Visit this website to learn more about its services.