Debunking 12 Offshore Banking Myths

Offshore bank accounts are only for spies and criminals and money launderers -- Although no-one can claim that criminals don't use offshore bank accounts, their uses in this regard have been severely limited due to the MLAT treaty. In fact, many fortune 500 companies now bank offshore to protect their assets and to gain competitive tax advantages.

Banking offshore is just too much trouble for the average guy -- If you tried to setup your offshore banking structure yourself without the aid of an offshore professional this would certainly be true. Today, however, an offshore bank account owned by an offshore company is commonly done and only takes about 5 days. Since governments around the world have been moving to tax individuals on their world wide income, an offshore bank account is usually setup with a bearer share corporation and/or a foundation.

Offshore bank accounts are only for rich people. -- A typical offshore package is less than $2000USD to setup. Once in place an offshore bank account and offshore company are the basis for a rock solid asset protection and tax plan.

Since 9/11 there is no such thing as bank secrecy. -- This is simply false. Several offshore jurisdictions like Panama have bank secrecy laws that impose prison sentences to those who violate your bank secrecy. In addition, Panama also has bearer share corporations that just a private as the infamous numbered Swiss bank accounts.

You must visit the offshore jurisdiction to open a bank account -- This is the case with some Swiss banks. Without an introduction in some offshore jurisdictions you can't get a bank account. Many banks in Panama work in this way. Fortunately, your offshore professional can provide the introduction necessary. Most clients don't even realize this is taking place in the background. They simply place their order and in a matter of a week or so they have an offshore corporation and bank account.

Bank secrecy is useless now that all the offshore jurisdictions are in the MLAT (Mutual Legal Assistance Treaty). -- If you are a criminal there is some merit to this statement. If you are not a criminal, but just someone trying to protect your money this statement is false. For an MLAT request to be honored, it must be based on a crime in BOTH countries. If the offshore country doesn't consider the activity a crime, they will NOT comply with the request. A great example is tax evasion. This is a crime in countries like the USA and Canada but in countries like Panama for instance it is not a crime. MLAT requests for tax evasion are simply denied.

Tax information is shared between most countries now -- It is true that many countries have entered into tax treaties, but other more reputable offshore jurisdictions have not. Panama, for example, has no tax treaties with anyone.

Its hard to manage a bank account offshore secretly. -- Today all the major banks allow you to do your banking online using encrypted communications. Offshore banks are no exception. Online banking a common feature of an offshore bank account. In fact, you can even send a bank wire using your offshore bank account. This is a service many onshore banks don't have.

Offshore banking won't protect me in a lawsuit because the court will order that I bring the funds back. -- If you setup your asset protection plan before you get sued you are well protected. Once you donate your money to an offshore foundation, for example, they money is not legally yours to get back. The judge cannot order anything illegal. If legal proceedings are already under way and you move the funds you might be charged with fraudulent conveyance. There are ways to avoid this, but it is beyond the scope of this article.

Someone will be able to track the money to its offshore destination -- It is true that if you send a wire to an offshore bank their will be a trail. This is avoided by first wiring the money to another offshore bank usually in another offshore haven. For example, the money is wired to a bank account located in Belize and then wired again from Belize to Panama. Now someone would have to break Belize bank secrecy to even know what country the money is now in. This is very strong security.

I can use my offshore bank account to do everything I currently do with my onshore account. -- There is one thing you can't do with an offshore bank account. You can't pay bills online. This is the only feature lacking from most offshore accounts. This is easily rectified by an good offshore asset protection plan by making a portion of the money available in your onshore account. This also brings up another feature that deserves mentioning. Most offshore bank accounts come with a cash card that can be used to withdraw funds anywhere in the world. The card only traces to the corporation which is often a bearer share corporation (meaning the ownership of it is anonymous)

Operating an offshore bank account is illegal -- Operating an offshore bank account is 100% legal and many fortune 500 companies do it everyday. In fact much of the money kept offshore is deposited by these companies to protect large sums of money from lawsuits. Most people don't realize that most major corporations are actually comprised of 50-100 smaller corporations. Many of these corporations in offshore banking havens, offering asset protection and tax advantages.

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If you have property or have money that you don't want to lose to an angry spouse or a lawsuit be sure to read more of Doug Snarder's teaching on the Offshore Banking Account and Offshore Asset Protection