What is Offshore Banking?

BANKING OFFSHORE - WHAT IS OFFSHORE BANKING?

The term "Offshore" means many things to many people. Basically the "offshore" consists of those countries which have adopted specific offshore company and/or offshore banking legislation and which have legislated privacy laws and regulations.

There are two different types of banking - regular "Onshore" banking and "Offshore" banking.

Simply because a bank is located in some place other than your home country or country of residence, this does not necessarily make it an "offshore" bank. An offshore bank must be specifically licenced as such under appropriate offshore banking legislation.

Regular onshore banking is subject to the tax rules, foreign exchange rules and charges of whatever country the account is in. There is also a common misconception that if a bank is located in an offshore jurisdiction that it automatically qualifies to be considered an offshore bank. This is Not True.

For example, we have a Royal Bank of Canada and a Bank of Nova Scotia here in Antigua, and Antigua is a legislated offshore jurisdiction. However, the above mentioned banks are local "onshore" banks. As such there are Government taxes imposed on foreign currency transactions. These banks are also subject to foreign exchange regulations and are not covered by the offshore banking confidentiality and asset protection legislation.

Offshore banking on the other hand is tax free, and there are no foreign exchange regulations attached to the accounts. Most importantly, all account information is confidential and protected by privacy laws.

Another common misconception is that offshore banks require little information or documentation to open accounts for "privacy" reasons, or that offshore bank accounts can be operated anonymously. Again, This is Not True.

Reputable and stable offshore banks follow strict anti-money laundering and anti-fraud procedures and require significant backup documentation on your offshore company and its Directors, in the case of offshore corporate accounts. The beneficial owner of the offshore bank account and its signatories must always be identified to the bank and be able to provide proof of identification, even in cases where nominees are used.

Beware of companies offering to open so called "anonymous" offshore bank accounts. There is no such thing these days, and you are likely to have your bank account stripped of its funds. The way "anonymous" bank accounts operate is that, unknown to you, the actual signatory on the account is someone else. You can access the account "online" or through code words, etc. but "others" control the account. When your "anonymous" bank account has significant funds, they are stripped from the account. Worse, since the bank has no record of you owning the money in the bank account, you have no recourse to recover your funds.

Similarly, there are no true "numbered" offshore bank accounts. Many banks issue "numbered" accounts, but what they mean is that, after the signatory on the bank account provides full identification, the bank issues a number for the signatory to use. The name of the account holder is then known only to senior bank officials who have access to the signatory's identification. The problem, however, is that the person who is provided the "number" to use the bank account may not be the "true" owner of the account (i.e. the person whose identification the bank has on record), and again the account can be stripped at any time.

Maritime International Limited can assist in opening bank accounts at any financial institution of your choosing. With over 17 years experience in the offshore banking industry we are able to advise on which offshore banks may be appropriate for your offshore bank account and which ones we advise against. We also offer a list of reputable offshore banking institutions with which we have held long standing relationships and in which we have placed many client accounts. Offshore banking is offered in the Caribbean, Latin America, Asia-Pacific Region and Europe.

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