When we hear the term “offshore banking,” it often conjures up images of the overly-wealthy elite or sly, nefarious criminals hiding away millions of dollars from prying government eyes. But the way offshore banking is portrayed in the movies is not the reality.
Opening an account offshore is not illegal, as many people wrongly believe. In fact, many offshore financial institutions are considered safer than many domestic banks. Most foreign banks offer absolute privacy guarantees, as well as security to protect your assets.
Banks in the United States are limited in the amount of the interest they can pay to customers. Many offshore institutions are able to offer higher interest rates to their clients. In many US and European banks, the governments have too much control, to the detriment of the countries’ citizens. Because of this, the government can step in to freeze your bank accounts and assets indefinitely.
Some countries are a better choice for offshore banking than others. Here are the top five countries to consider if you want to put a portion of your money into a foreign account and what you need to open one.
Hong Kong has a strong banking infrastructure. Banks do not require formal approval from the government for opening accounts. The minimum balance is $3,000. To open an account, you will need your passport, proof of address, and possibly a reference letter from a banker. Sovereign savings accounts in Hong Kong can also be held in any currency including gold.
The Cayman Islands have no direct taxation. The minimum balance is usually $5,000 to open an account. You will need a letter of reference from your home banker and deposits cannot be made with cash, but with check, wire transfer or bank draft. You need proof of identity and a notarized copy of your passport, character reference and any additional documents requested by the bank.
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