5 Ways to Use Offshore Banks in 2017
2017 is going to be a challenging year for using offshore structures to hide your assets. For example, the Swiss banks will start to implement the automatic exchange of information from 2017 onward. Singapore follows suit, agreeing to implement Common-Reporting Standard (CRS) starting from January 1, 2017, and will eventually start exchanging information in 2018. 100+ jurisdictions have committed, and more to join in the upcoming year.
With the trends, we can now be sure that we should use offshore banks (and companies) in the right way. So, in this article, we would like to suggest several ways you can use offshore banks legally and ethically in 2017 and beyond, as follow:
1. Diversify your currencies
Suppose your home country falls deep into recession and hyperinflation is looming ahead of you. The worst situation for you is to have all of your assets denominated in your home country’s currency.
To reduce your risk, you need to do currency diversification — that is, holding various foreign currencies, just in case.
Now, there are many ways to diversify your currencies: Buying foreign bank notes, opening a local bank account in foreign currency, and so on — but those are limiting your options. Exchanging your local currency with another via a money changer is doable, but not practical. Want to bank in foreign currencies locally? Your options are limited — typically in USD or any other popular currency like EUR or GBP depending on your local banks’ policies.
The best currency diversification options for you is opening an offshore bank account. A typical offshore bank offering online banking services allows you to open a multi-currency account.
2. Protect your asset
In today’s age of transparency, offshore banks can no longer offer you sufficient privacy and secrecy for your asset protection purposes. That said, although it’s no longer feasible for you to keep your account concealed from the prying eyes of your competitors or even Government agencies, you can certainly make things difficult for them to grab a hold of your assets offshore via a filed lawsuit.
There are numerous asset protection ways you can use, such as setting up offshore trust funds, buying precious metals via your offshore banks, and so on. Refer to this article for more details.
3. Get higher deposit interest rates
Did you know that you can get nearly 6.5 percent of deposit interest rate in Indonesia? Now compare that to 0.75 percent in Singapore or 1.3 percent in the United States. If 6.5 percent is not high enough, how about a cool double-digit deposit rates of 20 percent in Uzbekistan, or perhaps a lucrative 8.94 percent in South Africa? (source)
Opening a bank account in an offshore jurisdiction that offers you a lucrative deposit rate is a sound passive wealth protection method that you should definitely make use of.
4. Invest in foreign investment vehicles
While house prices went down in jurisdictions like the UK and potentially the US, other jurisdictions are growing considerably. The same is true for stock markets — some are still undervalued, making them the right place to invest your money it.
However, there are some limitations if you want to tap into the emerging markets. Some overseas investment opportunities are only available for those who have the right structure, which usually consists of an offshore entity and an offshore bank account.
Opening an offshore bank account, along with setting up an offshore company, allow you to make investments offshore — e.g. Buying overseas real estate, investing in foreign markets, acquiring local businesses, etc.
5. Save for rainy days
You can use an offshore bank account to stash your assets for rainy days. “What kinds of rainy days?” you ask. Well, there are numerous scenarios that can present doom and gloom to your well-being, such as capital control imposed by your home country (e.g. Greece crisis) need medical treatment overseas, civil wars, and other worst case scenarios that you may have to encounter in the future.
Having an offshore bank account can offer you not only peace of mind, but also freedom for having multiple options for survival — just in case.
Takeaway
There are many other legitimate ways to use an offshore bank for giving you an edge over your less-than-ideal circumstances, but the five mentioned above should b e sufficient in giving you some ideas on how to use your offshore bank account better.
Some final words of advice: We need to stop viewing offshore banking as a way to hide your assets from the taxmen. We can use the offshore bank account ethically, and you should use it in the right way, or else.
