In exact terms, any bank account that opened in a foreign country outside one’s country of residence can always referred to as an offshore bank account. For several years, offshore banks have been the primary destination for wealthy and rich people to hide money that they had earned either through illegal practices or business earnings that were never reported to tax authorities.
In the recent years, offshore banking is being preferred largely by corporate houses as these companies largely want to remain anonymous. Corporate clients opting for offshore banking usually include multi-national corporations, financial services and banking institutions, large industrial and trading companies and shipping corporations. Also, many of these companies have overseas business ventures and might not want to disclose their assets or income to the IRS or any other international revenue agencies. The best way to achieve this is to opt for an offshore corporate bank account.
Why does one need an Offshore Corporate Bank Account? For companies willing to explore their business options in other nations, an offshore corporate bank account provides innumerable opportunities to achieve their objectives and gain maximum profits. Eyal Nachum Some of these advantages are listed below.
- Since offshore financial centers are primarily jurisdictions with liberal taxation policies, companies do have an opportunity to conduct their business operations in a tax-effective manner with a corporate offshore bank account. In this way, companies can save a significant amount of money as the deposits in an offshore bank account are usually considered as foreign and are accounted differently. Also, banking institutions do provide higher interest rates on deposits present in offshore accounts.
- Secondly, maintaining confidentiality is essential for corporate houses. In this regard, offshore corporate bank accounts provide the best alternative. Offshore companies provide utmost protection and security as these companies do not have any information-sharing agreements with any organization or jurisdiction. Also, sensitive personal information of the clients is never registered on any public file.
- Thirdly, offshore corporate bank accounts are extremely useful for companies to get approved for an offshore merchant account. For small scale companies or merchants trading in high-risk businesses such as online casinos, tourism, or online pharmacy shops, getting approved for a merchant account in any of the domestic banks might be an impossible task. The reason is that domestic banks are normally apprehensive about such business ventures and tend to evade from having any association with them. Nowadays, with large number of people willing to pay for their goods or services through credit/debit cards, having an offshore credit card merchant account is extremely essential for such high-risk companies to cater their credit card processing requirements. Also, companies with an offshore merchant account can save on tax implications. Another advantage is that companies no longer have to worry about any ceiling on sales volume, a limitation that is normally associated with local banks extending merchant accounts to high-risk businesses.
- Normally, offshore banking institutions providing corporate bank accounts also perform the role of an offshore investment bank. An offshore investment account with these banks enables corporate houses to trade stocks, securities, forex and other investment options. However, one cannot transfer money or utilize banking business online services through an offshore investment account. One way of overcoming this limitation is to have your offshore investment account linked to your offshore bank account.
- Lastly, an offshore corporate bank account allows corporate flexibility, simplifies management and doesn’t include any operational hassles that can delay the process. These accounts neither require companies to declare their operational objectives nor any paid-up capital. Also, these accounts have minimal reporting and cab be operated from anywhere in the world through electronic means.