Reason 1: Dilute Political Risk
An offshore (or overseas) offshore bank account is an account located outside of your country of residence.
Market risk is not the biggest threat to savings today. It’s your own government.
Well is no doubt that governments are increasing the risk to your savings. The government is hopelessly bankrupt. Predictably, they resort to the same desperate measures they have used throughout history. Given more bail-ins, bank deposit taxes and nationalization of retirement savings, and capital controls, among other disruptive actions. These are just a few recent examples.
If you think something like this can’t happen in your country, think again.
In the words of Judge Andrew Napolitano: “…people with more than $100,000 in the bank are targets for any government looking for money to shore up its own inability to manage its finances.”
An important part of any strategy to reduce your political risk is to place some of your savings outside the immediate reach of the government in your country. One convenient way to do this is to open an overseas bank account in the right jurisdiction.
This will ensure that your home government cannot easily confiscate, freeze or devalue all your money with a few keystrokes. If your national government imposes capital controls, an offshore bank account will allow you to access your money when you need it most.
Basically, keeping some of your savings in the right foreign bank can go a long way to protecting you from the madness of your home country.
Reason 2: Stronger banking systems and banks
Virtually all banking systems in Western countries are fundamentally weak. Moreover, most of these banks have only a tiny amount of cash available to meet customer withdrawal demands. This means that in the event of a financial shock, you may find it difficult to get your money.
This is a pity because we don’t even realize that there are other convenient options.
There are banks in stable, low-debt jurisdictions that are much better capitalized, hold more cash, and are much more conservatively managed than US banks.
These offshore banks are almost always more responsible custodians of your hard-earned savings.
Reason 3: Asset protection
The Legal Resource Network reports that 15 million lawsuits are initiated each year in the United States.
That’s one new lawsuit for every 12 adults each year. You won’t like it.
It’s no coincidence that 80% of the world’s lawyers, over 1.2 million, work in the United States. The action is there. Your money is the prize they fight for.
Although there is no 100% protection, a foreign bank account can help make you a less attractive target.
A foreign bank account also protects you from overzealous government agencies equipped with the basic power to freeze your assets. Indeed, their reach does not extend beyond the United States.
If you ever get into a fight with a government agency, a foreign bank account gives you resources you can rely on.
Reason 4: Diversification of currencies
Owning foreign currency is an excellent way to diversify your portfolio risk, protect your purchasing power, and globalize some of your assets.
But chances are, your local bank will offer few if any, options for holding foreign currency.
Offshore banks, on the other hand, usually offer convenient online platforms for holding foreign currency.
Reason 5: Higher interest rates for your deposits
The European Central Bank and the Fed have manipulated interest rates to near-record lows in a war against depositors. These artificially low interest rates have the effect of transferring wealth from depositors, who would otherwise enjoy a higher return on their deposits, to the people who borrow.
As a matter of fact, if you live in the West, chances are that the interest you receive on your savings does not even keep up with the real rate of inflation.
On the other hand, if you look abroad, you will find banks that pay much higher interest rates than you find here.
Reason 6: Guarantee access to health services abroad:
If you can’t receive prompt treatment in your home country, you may want to access health services abroad.
Let’s say you can’t get the medical care you need in your home country and have to go abroad. You will have to transfer money abroad to pay for it. However, if the government in your home country has already imposed capital controls, it may be difficult or impossible to pay for the medical care you need.
So having a bank account abroad, which is not subject to capital controls in your home country, can help to ensure that you can always pay for the medical care you need.
Reason 7: the capacity to act fast
Once a government has imposed capital controls or confiscated bank accounts, it is too late to protect your money.
If you don’t already have one, you should open an offshore bank account now, even if it’s a small one. Just having one gives you significant advantages. It gives you the ability to act quickly and transfer more money abroad in the future if the situation requires it.
Reason 8: Limited privacy
If Americans hold a total of $10,000 or more in foreign financial accounts at any time during the year, they must report it. However, if your total foreign financial accounts remain below $10,000 for the year, and you do not use a trust, LLC, or other structure, you are not necessarily required to report them.
Reason 9: Peace of mind
With an offshore bank account, you are like an insurance policy. It protects you from dubious banks and banking systems and the destructive actions of a failed government. It also makes you a hard target for frivolous lawsuits and allows you to pay for medical care abroad. Knowing that you have protected your money gives you more peace of mind.
Reason 10: Maximise your personal freedom
Having an overseas bank account gives you more options. More options mean more freedom.
It is a crucial step in freeing yourself from absolute dependence on a single country.
And once you have this freedom, it becomes very difficult for a government to control you.
Is it legal?
Contrary to what you may think, the offshore banking business is completely legal. This is not about tax evasion or other illegal activities. It is simply about legally diversifying your political risk by placing your liquid savings in sound, well-capitalized institutions where they are best treated.
If you wish to discover more about offshore business bank accounts or advice on how to open an offshore business bank account, do not hesitate to book a free consultation with our team now.
Disclaimer
Widelia and its affiliates do not provide tax, investment, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, investment, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Please consult https://widelia.com/disclaimer/ for more information.
