Offshore Banking and Stability (Copyright ©2008)

Caribbean Property Magazine, November 2008


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Given the dreadful state of the financial environment earlier this year, in April, the International Monetary Fund predicted a one in four chance of a full-blown global recession over the next twelve months, and that there will be no early or simple resolution to the world’s largest financial shock since the Great Depression of the 1930s.

At a banking conference held in Madrid late last year, Managing Director of the IMF Rodrigo Rato explained the effect on global growth, and advised that the biggest impact of the crisis will be on the US economy.

“ [The brunt] will be felt more in 2008 with greater intensity in the US, less in other areas. A lot will have to do with the length of the crisis; the longer it lasts, the bigger impact it will have.”

This unfurling financial turmoil constipates global economies to such an extent that countries facing devastating consequences are cautioned to take drastic steps to prevent the situation from worsening.

This month, the Government of Jamaica called on the top financial experts on the island to monitor the global economic crisis and assess the immediate and long-term implications on the local economy.

Prime Minister Bruce Golding assured his people, “a team drawn has been set up to monitor and analyze on a day to day basis, developments in the global financial market to determine the likely impact on Jamaica and to allow for timely and pro-active policy intervention.”

However, the Prime Minister told members of the Jamaica Manufacturing Association, “it is too early to determine the precise impact that the global situation will have on investment projects.”

Meanwhile, in its global financial stability report, the IMF warned that ‘the potential consequences of this episode should not be underestimated, and the adjustment process is likely to be protracted’.

With all this global financial gloom, and developed countries such as the US and UK heading into recession, many concerned are now wondering how can they ensure their wealth is protected and at the same time profit during this systemic banking crisis.

Threatening reports from the IMF give smart investors reason to look outside their home countries to safeguard their assets, and rather than focusing predominantly on their capital returns, they give priority to protecting the capital they already have.

A large number of these investors have recognized the declining value of the US dollar at a very early stage, and so have taken the necessary initiatives to survive the currency crisis and protect their finances.

Protecting your assets with an offshore bank account is one of the best decisions you can make if you want some form of income solution that shelters your earnings from excessive taxation, while still ensuring that you have flexible access to your money, and that all your business transactions are protected.

While some may be put off by the idea of offshore banking as it has been linked to subversive activities such as money laundering, tax evasion and organized crime, it should be reassuring to know that business transacted through offshore companies is perfectly legal, and from the early 1900s offshore banking has enjoyed a steady growth and popularity in response to high taxation in developed countries.

Today, offshore banking remains a powerful mechanism through which to assert one’s financial freedom and privacy. Currently, it’s estimated that more than 50 per cent of the world’s currency is held offshore, as offshore banks offer a wide range of legal and financial benefits.

Economists believe that offshore banking ‘contributes to as much as half of the world’s capital flows, making this one of the most important components of the international financial system’.

Here in the region, we offer a full spectrum of offshore financial services including offshore banking, to corporate bodies and individuals who seek better interest returns on their funds. With linkages in several Caribbean islands and Europe, you can choose from our carefully selected range of offshore banking services in some of the best tax havens in the world.

You’re probably wondering, why have an offshore bank account in a small tax haven in the Caribbean or elsewhere for that matter, given the present economic downturn? The reasons are plenty, and include: Protection, Privacy and Tax-Free Earnings.

How do you go about starting an offshore account? To begin with, we have a knowledgeable team of offshore consultants with over 10 years experience, who will help you make the best decisions to meet your financial needs. Our team is dedicated to treating each client on an individual basis and will provide you with the necessary guidance depending on your personal circumstances.

Over the years, we have forged long-lasting relationships with well-established financial institutions with proven track records; offering multi-currency accounts for savings, investments and trading purposes. The backbone of our success lies in our commitment to providing all the financial services you require with comfortable operational rates, reliable internet banking and credit/debit card facilities allowing you to manage your account and access your funds from anywhere in the world.

As a result, you will be able to make the most of the benefits of offshore banking, such as:

Security and privacy of investments-The small offshore havens in the Caribbean (with very conservative economies)for instance, are known to have a low level of exposure to risky practices, and therefore offer the necessary safety and security not normally provided by Western banks.

The company offers very high levels of confidentiality, and as a valued client, all your personal information is subject to modern data protection legislation. In addition, if you desire further levels of protection and confidentiality, the company will be able to help you set up an International Business Company (IBC).

Protection against local political and financial instability- If you live in a country with an unstable economy or government, and fear your assets may be frozen, seized or disappear altogether, it’s reassuring to know that your money is stable and secure in an offshore bank account, and that you are not affected by local problems.

Low or no taxation on earnings and savings- Countries such as the US or UK require residents to declare their worldwide income, which is then taxed. But for an expatriate living and working overseas, interest on your offshore account could be paid without tax being deducted. Moreover, it’s possible to transfer your saving and investments to an offshore account, enabling you to further reduce your tax liability in your home country. All in all, the less restrictive offshore environment provides freedom from excessive taxation, allowing your assets to grow quickly.

When offshore banking was newly introduced, you had to be very wealthy to meet the minimum balances and afford the banking fees to have an offshore bank account. Today, you can secure your savings and investments in a relatively modest offshore account, thereby opening doors for better investment opportunities, asset protection and higher returns on your capital.

As the financial gloom continues to intensify on a daily basis, resulting in job losses, slashed payrolls and diminished access to credit, you may want to start thinking long and hard about diversifying your assets and making the most of your investments.

Dramatic changes in international banking now provide opportunities for you to take advantage of the many benefits that come with having an offshore bank account, and protect a portion of your assets offshore in the right jurisdictions.

While investing or conducting financial transactions offshore is completely legal, there are a few formalities you should be aware of, as each country comes with its own set of tax laws and levels of security. Also, there are many different types of accounts and investments to choose from, depending on your financial needs, so be sure to choose the best option that suits you.