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MEANING OF BANK

A bank is a financial intermediary and appears in several related basic forms:


a central bank issues money on behalf of a government, and regulates the money supply a commercial bank accepts deposits and channels those deposits into lending activities, either directly or through capital markets. A bank connects customers with capital deficits to customers with capital surpluses on the world's open financial markets. a savings bank, also known as a building society in Britain is only allowed to borrow and save from members of a financial cooperative

Banking is generally a highly regulated industry, and government restrictions on financial activities by banks have varied over time and location. The current set of global bank capital standards are called Basel II. In some countries such as Germany, banks have historically owned major stakes in industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies. In Japan, banks are usually the nexus of a cross-share holding entity known as the keiretsu. In Iceland banks had very light regulation prior to the 2008 collapse.

Defination
An organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor's checks; and issues drafts and cashier's checks

Offshore Bank Account


Offshore Shield can assist you in opening an offshore bank account. The offshore bank account may come with the incorporation package, or you may be interested in other jurisdictions for your banking needs. We realize that not every packaged bank account will fit every particular need. At Offshore Shield we will listen to your situation, and provide a solution that will fit your objectives. We know all to well that many solution providers seem all too eager to sell you a bank account. They are not really interested whether it suits your needs, because they never asked the right questions. Offshore bank accounts usually require deposits and set-up time. The last thing you want is to be ready to start your business only to find out the offshore bank account you were sold doesnt suit your needs. Offshore Shield will ask the right questions, and help you set up a solution that will provide you with the very best in protection and convenience. Because what is the point in an offshore bank account if at the end of the day it doesnt protect your hard earned assets. You will realize we care from the very first telephone or chat conversation you have with Offshore Shield. Call today to discuss your ideas, and we will listen and provide a solution. Laws are changing every day in all jurisdictions, and you want to make sure that you have a strategy in place that will protect your assets. Do not open a bank account in any jurisdiction because to do so could cost you all your protection and anonymity.

General perception about offshore banking is that it is only for the very rich people. Not quite true. Ordinary people are also eligible for opening offshore bank account online. The main thing in this context is that for opening offshore bank account online there is a requirement regarding the minimum deposit. It varies from bank to bank. You can opt for different tax haven jurisdictions. In Europe I guess Swiss banks are the most famous. But there are other offshore jurisdictions here such as Luxembourg, Malta, Monaco, Ireland, Andorra etc. In the Caribbean region there are such tax havens as Panama, Antigua and Barbuda, Barbados, Cayman Islands, Bahamas, Belize, Anguilla and Bermuda. In Asia Singapore and Hon Kong are the biggest. Wherever you open an offshore bank account you should remember that offshore banking is an international business and there is no need to visit your money as there is for example online offshore banking. So you can handle any transaction and manage your financial means via Internet. It is very easy to open an HSBC Offshore Bank Account In Sterling, US dollars or Euros online. You can do it in minutes. Usually you have to fill in an application form and send also some additional documents.

Types of banks
Central bank Swiss bank Advising bank

Commercial bank Community development bank Credit union Custodian bank Depository bank Export credit agency German public bank Investment bank Industrial bank Islamic banking Merchant bank Mutual bank Mutual savings bank National bank Offshore bank

Private bank Saving bank

Types of deposit
Deposit accounts Savings account Transactional account Money market account Time deposit

Banking terms

Anonymous banking Automatic teller machine Loan Money creation Substitute check Finance series

Meaning of offshore banking

An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages. These advantages typically include:

greater privacy (see also bank secrecy, a principle born with the 1934 Swiss Banking Act) low or no taxation (i.e. tax havens) easy access to deposits (at least in terms of regulation) protection against local political or financial instability

While the term originates from the Channel Islands being "offshore" from the United Kingdom, and most offshore banks are located in island nations to this day, the term is used figuratively to refer to such banks regardless of location, including Swiss banks and those of other landlocked nations such as Luxembourg and Andorra. Offshore banking has often been associated with the underground economy and organized crime, via tax evasion and money laundering; however, legally, offshore banking does not prevent assets from being subject to personal income tax on interest. Except for certain persons who meet fairly complex requirements, the personal income tax of many countries makes no distinction between interest earned in local banks and those earned abroad. Persons subject to US income tax, for example, are required to declare on penalty of perjury, any offshore bank accountswhich may or may not be numbered bank accountsthey may have. Although offshore banks may decide not to report income to other tax authorities, and have no legal obligation to do so as they are protected by bank secrecy, this does not make the non-declaration of the income by the tax-payer or the evasion of the tax on that income legal. Following September 11, 2001, there have been many calls for more regulation on international finance, in particular concerning offshore banks, tax havens, and clearing

houses such as Clearstream, based in Luxembourg, being possible crossroads for major illegal money flows. Defenders of offshore banking have criticised these attempts at regulation. They claim the process is prompted, not by security and financial concerns, but by the desire of domestic banks and tax agencies to access the money held in offshore accounts. They cite the fact that offshore banking offers a competitive threat to the banking and taxation systems in developed countries, suggesting that Organisation for Economic Co-operation and Development (OECD) countries are trying to stamp out competition. Offshore banking is one of the most sought after banking solutions in today's world. Offshore banking denotes the banking options opted by an individual outside the country of residence. The term offshore banking has been inspired from the fact that these banks are mostly located in the island nations - offshore. However, with numerous exceptions to the fact, like countries like Switzerland, Luxembourg etc, this term is now used in global context as well. Offshore banking is blessed with a number of features. The most significant ones are: Offers higher level of privacy as opposed to the local banks No taxation Protection against financial insecurities and instabilities in the local economy Less restrictive regulations Easy access deposits Except for the developed nations that offer for complete financial stability, individuals from the various undeveloped countries that are surrounded with instability may opt to

resort to offshore banking for better steadiness in assets and resources Offshore banks offer better rate of interest Offers features that banks in the domestic realm may not possess like unspecified bank account etc Offers investment opportunities far greater and better in variety and quality than the ones available locally Exceptionally preferable for international workers

Advantages of offshore banking


Offshore banks can sometimes provide access to politically and economically stable jurisdictions. This will be an advantage for residents in areas where there is risk of political turmoil,who fear their assets may be frozen, seized or disappear (see the corralito for example, during the 2001 Argentine economic crisis). However it is often argued that developed countries with regulated banking systems offer the same advantages in terms of stability. Some offshore banks may operate with a lower cost base and can provide higher interest rates than the legal rate in the home country due to lower overheads and a lack of government intervention. Advocates of offshore banking often characterise government regulation as a form of tax on domestic banks, reducing interest rates on deposits.

Offshore finance is one of the few industries, along with tourism, in which geographically remote island nations can competitively engage. It can help developing countries source investment and create growth in their economies, and can help redistribute world finance from the developed to the developing world. Interest is generally paid by offshore banks without tax being deducted. This is an advantage to individuals who do not pay tax on worldwide income, or who do not pay tax until the tax return is agreed, or who feel that they can illegally evade tax by hiding the interest income. Some offshore banks offer banking services that may not be available from domestic banks such as anonymous bank accounts, higher or lower rate loans based on risk and investment opportunities not available elsewhere. Offshore banking is often linked to other structures, such as offshore companies, trusts or foundations, which may have specific tax advantages for some individuals. Many advocates of offshore banking also assert that the creation of tax and banking competition is an advantage of the industry, arguing with Charles Tiebout that tax competition allows people to choose an appropriate balance of services and taxes. Critics of the industry, however, claim this competition as a disadvantage, arguing that it encourages a "race to the bottom" in which governments in developed countries are pressured to deregulate their own banking systems in an attempt to prevent the offshoring of capital.

Disadvantages of offshore banking


Offshore bank accounts are less financially secure. In a banking crisis which swept the world in 2008 the only savers who lost money were those who had deposited their funds in offshore branches of Icelandic banks such as Kaupthing Singer & Friedlander. Those who had deposited with the same banks onshore received all of their money back. In 2009 The Isle of Man authorities were keen to point out that 90% of the claimants were paid, although this only referred to the number of people who had received money from their depositor compensation scheme and not the amount of money refunded. In reality only 40% of depositor funds had been repaid 24.8% in September 2009 and 15.2% in December 2009. Both offshore and onshore banking centres often have depositor compensation schemes. For example The Isle of Man compensation scheme guarantees 50,000 of net deposits per individual depositor or 20,000 for most other categories of depositor and point out that potential depositors should be aware that any deposits over that amount are at risk. However only offshore centres such as the Isle of Man have refused to compensate depositors 100% of their funds following Bank collapses. Onshore depositors have been refunded in full regardless of what the compensation limit of that country has stated thus banking offshore is historically riskier than banking onshore. Offshore banking has been associated in the past with the underground economy and organized crime, through money laundering. Following September 11, 2001, offshore banks and tax havens, along with clearing houses, have been accused of helping various organized crime gangs, terrorist

groups, and other state or non-state actors. However, offshore banking is a legitimate financial exercise undertaken by many expatriate and international workers.

Offshore jurisdictions are often remote, and therefore costly to visit, so physical access and access to information can be difficult. Yet in a world with global telecommunications this is rarely a problem for customers. Accounts can be set up online, by phone or by mail. Offshore private banking is usually more accessible to those on higher incomes, because of the costs of establishing and maintaining offshore accounts. However, simple savings accounts can be opened by anyone and maintained with scale fees equivalent to their onshore counterparts. The tax burden in developed countries thus falls disproportionately on middle-income groups. Historically, tax cuts have tended to result in a higher proportion of the tax take being paid by high-income groups, as previously sheltered income is brought back into the mainstream economy. The Laffer curve demonstrates this tendency. Offshore bank accounts are sometimes touted as the solution to every legal, financial and asset protection strategy but this is often much more exaggerated than the reality. European Savings Tax Directive

In their efforts to stamp down on cross border interest payments EU governments agreed to the introduction of the Savings Tax Directive in the form of the European Union withholding tax in July 2005. A complex measure, it forced EU resident savers depositing money in any country other than the one they are resident in to choose between forfeiting tax at the point of payment, or allowing notification by the offshore banks to tax authorities in their country of residence. This tax affects any cross border interest payment to an individual resident in the EU.

Furthermore the rate of tax deducted at source will rise in 2008 and again in 2011, making disclosure increasingly attractive. Savers' choice of action is complex; tax authorities are not prevented from enquiring into accounts previously held by savers which were not then disclosed.

Banking services
It is possible to obtain the full spectrum of financial services from offshore banks, including:

deposit taking
Checking accounts: A deposit account held at a bank or other financial institution, for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channels. Because money is available on demand these accounts are also referred to as demand accounts or demand deposit accounts. Savings accounts: Accounts maintained by retail banks that pay interest but can not be used directly as money (for example, by writing a cheque). Although not as convenient to use as checking accounts, these accounts let customers keep liquid assets while still earning a monetary return. Money market account: A deposit account with a relatively high rate of interest, and short notice (or no notice) required for withdrawals. In the United States, it is a style of instant access deposit subject to federal savings account regulations, such as a monthly transaction limit.

Major types

Time deposit: A money deposit at a banking institution that cannot be withdrawn for a preset fixed 'term' or period of time. When the term is over it can be withdrawn or it can be rolled over for another term. Generally speaking, the longer the term the better the yield on the money.

credit

Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately (thereby generating a debt), but instead arranges either to repay or return those resources (or other materials of equal value) at a later date. The resources provided may be financial (e.g. granting a loan), or they may consist of goods or services (e.g. consumer credit). Credit encompasses any form of deferred payment.[1] Credit is extended by a creditor, also known as a lender, to a debtor, also known as a borrower. Credit does not necessarily require money. The credit concept can be applied in barter economies as well, based on the direct exchange of goods and services (Ingham 2004 p.12-19). However, in modern societies credit is usually denominated by a unit of account. Unlike money, credit itself cannot act as a unit of account. Movements of financial capital are normally dependent on either credit or equity transfers. Credit is in turn dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds. Credit is also traded in financial markets. The purest form is the credit default swap market, which is essentially a traded market in credit insurance. A credit default swap represents the price at which two parties exchange this risk

the protection "seller" takes the risk of default of the credit in return for a payment, commonly denoted in basis points (one basis point is 1/100 of a percent) of the notional amount to be referenced, while the protection "buyer" pays this premium and in the case of default of the underlying (a loan, bond or other receivable), delivers this receivable to the protection seller and receives from the seller the par amount (that is, is made whole).

wire- and electronic funds transfers

Electronic money (also known as e-currency, e-money, electronic cash, electronic currency, digital money, digital cash, digital currency, cyber currency) refers to money or scrip which is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT), direct deposit, digital gold currency and virtual currency are all examples of electronic money. Also, it is a collective term for financial cryptography and technologies enabling it. While electronic money has been an interesting problem for cryptography (see for example the work of David Chaum and Markus Jakobsson), to date, the use of e-money has been relatively low-scale. One rare success has been Hong Kong's Octopus card system, which started as a transit payment system and has grown into a widely used electronic money system. London Transport's Oyster card system remains essentially a contactless pre-paid travelcard. Two other cities have implemented functioning electronic money systems. Very similar to Hong Kong's Octopus card, Singapore has an electronic money program for its public transportation system (commuter trains, bus, etc.), based on the

same type of (FeliCa) system. The Netherlands has also implemented a nationwide electronic money system known as Chipknip for general purpose, as well as OV-Chipkaart for transit fare collection. In Belgium, a payment service company, Proton, owned by 60 Belgian banks issuing stored value cards, was developed in 1995.[1] A number of electronic money systems use contactless payment transfer in order to facilitate easy payment and give the payee more confidence in not letting go of their electronic wallet during the transaction

foreign exchange

The foreign exchange market (forex, FX, or currency market) is a global, worldwide decentralized over-the-counter financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies. The primary purpose of the foreign exchange is to assist international trade and investment, by allowing businesses to convert one currency to another currency. For example, it permits a US business to import British goods and pay Pound Sterling, even though the business's income is in US dollars. It also supports speculation, and facilitates the carry trade, in which investors borrow low-yielding currencies and lend (invest in) high-yielding

currencies, and which (it has been claimed) may lead to loss of competitiveness in some countries. In a typical foreign exchange transaction, a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market began forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

letters of credit and trade finance

A standard, commercial letter of credit (LC[1]) is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking. The letter of credit can also be payment for a transaction, meaning that redeeming the letter of credit pays an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. In such cases, the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits applies (UCP 600 being the latest version).[2] They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, storm water ponds, etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and Traveler's cheques. Typically, the documents a beneficiary has to

present in order to receive payment include a commercial invoice, bill of lading, and documents proving the shipment was insured against loss or damage in transit.

investment management and investment custody

Investment management is the professional management of various securities (shares, bonds and other securities) and assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations, charities, educational establishments etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or exchange-traded funds). The term asset management is often used to refer to the investment management of collective investments, (not necessarily) while the more generic fund management may refer to all forms of institutional investment as well as investment management for private investors. Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as wealth management or portfolio management often within the context of so-called "private banking". The provision of 'investment management services' includes elements of financial statement analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Investment management is a large and important global industry in its own right responsible for caretaking of trillions of yuan, dollars, euro, pounds and yen. Coming under the remit of financial services many of the world's largest companies are at least in part investment managers and employ millions of staff and create billions in revenue.

trustee services

A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. The body sometimes has a different name, such as board of governors, board of managers, board of regents, board of trustees, board of visitors, or executive board. It is often simply referred to as "the board." A board's activities are determined by the powers, duties, and responsibilities delegated to it or conferred on it by an authority outside itself. These matters are typically detailed in the organization's bylaws. The bylaws commonly also specify the number of members of the board, how they are to be chosen, and when they are to meet. In an organization with voting members, e.g., a professional society, the board acts on behalf of, and is subordinate to, the organization's full assembly, which usually chooses the members of the board. In a stock corporation, the board is elected by the stockholders and is the highest authority in the management of the corporation. In a non-stock corporation with no general voting membership, e.g., a university, the board is the supreme governing body of the institution; its members are sometimes chosen by the board itself.

corporate administration

Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more

people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Because organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to manage others. Not every bank provides each service. Banks tend to polarise between retail services and private banking services. Retail services tend to be low cost and undifferentiated, whereas private banking services tend to bring a personalised suite of services to the client. not every banks provides each of these services. Banks tend to polarize between retail service and private banking services. Retail service tends to be low cost and undifferentiated; where as private banking services tend to bring a personalized suit of services to the client. Offshore banking is an important part of international financial system. Experts believe that as much as half the words capital flows through offshore centers. Tax havens have 1.2 per cent of the world population and hold 26 per cent of the worlds wealth, including 31 per cent of the net profits of the United States multinationals. The international monitory fund (IMF) has said that between $600 billions and $1.5 trillion of illicit money is laundered annually, equal to 2 to 5 per cent of global economic output. Today, offshore where most of the words drug money is allegedly laundered, estimated at up to $500bilion a year, more than the total income of the worlds poorest 20 per cent.

In the twenty first century, regulation of offshore banking is allegedly improving, although critics maintain it remains largely

Statistics concerning offshore banking


Offshore banking is an important part of the international financial system. Experts believe that as much as half the world's capital flows through offshore centers. Tax havens have 1.2% of the world's population and hold 26% of the world's wealth, including 31% of the net profits of United States multinationals. According to Merrill Lynch and Gemini Consulting's World Wealth Report for 2000, one third of the wealth of the world's high net-worth individualsnearly $6 trillion out of $17.5 trillionmay now be held offshore. Some $3 trillion is in deposits in tax haven banks and the rest is in securities held by international business companies (IBCs) and trusts. The IMF has said that between $600 billion and $1.5 trillion of illicit money is laundered annually, equal to 2% to 5% of global economic output. Today, offshore is where most of the world's drug money is allegedly laundered, estimated at up to $500 billion a year, more than the total income of the world's poorest 20%. Add the proceeds of tax evasion and the figure skyrockets to $1 trillion. Another few hundred billion come from fraud and corruption. "These offshore centers awash in money are the hub of a colossal, underground network of crime, fraud, and corruption" commented Lucy Komisar quoting these statistics.[1] Among offshore banks, Swiss banks hold an estimated 35% of the world's private and institutional funds (or 3 trillion Swiss francs), and the Cayman Islands (1.9 trillion US dollars in deposits) are the fifth largest banking centre globally in terms of deposits.[4] However, recent data by the Swiss National Bank show that the assets held by foreign persons in Swiss bank accounts declined by 28.1% between January 2008 and November 2009.

Terrorist Finance Tracking Program

A series of articles published on June 23, 2006, by The New York Times, The Wall Street Journal and The Los Angeles Times revealed that the United States government, specifically the Treasury Department and the CIA, had a program to access the SWIFT transaction database after the September 11th attacks (see the Terrorist Finance Tracking Program) rendering offshore banking for privacy severely compromised.

Regulation of offshore banks


In the 21st century, regulation of offshore banking is allegedly increasing, although critics maintain it remains largely insufficient. The quality of the regulation is monitored by supra-national bodies such as the International Monetary Fund (IMF). Banks are generally required to maintain capital adequacy in accordance with international standards. They must report at least quarterly to the regulator on the current state of the business. Since the late 1990s, especially following September 11, 2001, there have been a number of initiatives to increase the transparency of offshore banking, although critics such as the Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC) non-governmental organization (NGO) maintain that they have been insufficient. A few examples of these are:

The tightening of anti-money laundering regulations in many countries including most popular offshore banking locations means that bankers are required, by good faith, to report suspicion of money laundering to the local police authority, regardless of banking secrecy rules. There is more international co-operation between police authorities. In the US the Internal Revenue Service (IRS) introduced Qualifying Intermediary requirements, which mean that the names of the recipients of US-source investment income are passed to the IRS. Following 9/11 the US introduced the USA PATRIOT Act, which authorises the US authorities to seize the assets of a bank, where it is believed that the bank holds assets for a suspected criminal. Similar measures have been introduced in some other countries. The European Union has introduced sharing of information between certain jurisdictions, and enforced this in respect of certain controlled centres, such as the UK Offshore Islands, so that tax information is able to be shared in respect of interest.

Joseph Stiglitz, 2001 Nobel laureate for economics and former World Bank Chief Economist, told to reporter Lucy Komisar, investigating on the Clearstream scandal: "You ask why, if there's an important role for a regulated banking system, do you allow a non-regulated banking system to continue? It's in the interest of some of the moneyed interests to allow this to occur. It's not an accident; it could have been shut down at any time. If you said the US, the UK, the major G7 banks will not deal with offshore bank centers that don't comply with G7 banks regulations, these banks could not exist. They only exist because they engage in transactions with standard banks."

In the 1970s through the 1990s it was possible to own your own personal offshore bank; mobster Meyer Lansky had done this to launder his casino money. Changes in offshore banking regulation in the 1990s in the form of "due diligence" (a legal construct) make offshore bank creation really only possible for medium to large multinational corporations that may be family owned or run.

Offshore financial centres

In terms of offshore banking centres, in terms of total deposits, the global market is dominated by two key jurisdictions: Switzerland and the Cayman Islands, although numerous other offshore jurisdictions also provide offshore banking to a greater or lesser degree. In particular, Jersey, Guernsey and the Isle of Man are known for their well regulated banking infrastructure. Some offshore jurisdictions have steered their financial sectors away from offshore banking, as difficult to properly regulate and liable to give rise to financial scandal. Weakened Bank Secrecy Since starting to survey offshore jurisdictions on April 2, 2009, the Organization for Economic Cooperation and Development ((OECD)) at the forefront of a crackdown on tax evasion, won't object to governments using stolen bank data to track down tax cheats in offshore centers. The recent sharing of confidential UBS bank details about 285 clients suspected of willful tax evasion by the United States Internal Revenue Service was ruled a violation of both Swiss law and the countrys constitution by a Swiss federal administrative court. Nevertheless, OECD has removed 18 countries, including Switzerland, Liechtenstein and Luxembourg, from a so-called "grey list" of nations that did not offer sufficient tax transparency, and has re-categorized them as white list nations. Countries that do not comply may face sanctions. A

notable exception is Panama, whose canal is currently needed by all Western nations, provides it with a unique type of immunity to international pressure. Given the enlargement of the canal to accommodate larger shipping, it is unlikely in the foreseeable future that Panama would likely succumb to international pressure toward transparency.

List of offshore financial centres


Offshore financial centres include:

Antigua and Barbuda Bahamas Barbados Belize Bermuda British Virgin Islands Cayman Islands Channel Islands (Jersey, Guernsey, Alderney, Sark and Herm) Cook Islands Cyprus Dominica Gibraltar is no longer an offshore centre since 30 June 2006. No new Exempt Company certificates are being issued from that date. Ghana Hong Kong Isle of Man Labuan, Malaysia Liechtenstein Luxembourg Malta Macau

Mauritius Monaco Montserrat Nauru New Zealand Panama Saint Kitts and Nevis Seychelles Singapore Switzerland Turks and Caicos Islands

The following are designated as offshore financial centres by the IMF[1], the FSF and recently Ministry of Finance (Brazil):

Alderney American Samoa Andorra Anguilla Antigua Aruba Bahamas Bahrain Barbados Belize Bermuda British Virgin Islands Brunei Cayman Islands Cook Islands Costa Rica Curaao Cyprus Denmark

Djibouti Dominica French Polynesia Gibraltar Grenada Guernsey Hong Kong Isle of Man Israel Japan Jersey Kiribati Lebanon Liechtenstein Luxembourg Macau Malaysia o Labuan Maldives Malta Marshall Islands Mauritius Micronesia Monaco Montserrat Nauru Netherlands

Bonaire Sint Eustatius Saba

Niue Northern Mariana Islands Oman

Palau Panama Philippines Pitcairn Islands Portugal Samoa Saint Helena, Ascension and Tristan da Cunha San Marino Seychelles Singapore Sint Maarten Solomon Islands St Kitts and Nevis St Lucia St Vincent and the Grenadines Swaziland Switzerland Thailand Tonga Turks and Caicos Islands United Arab Emirates United Kingdom o London United States o Alaska o Delaware o Nevada o New York o Wyoming

Benefits of offshore banking


Offshore banking has now become an important segment of the international financial system. Offshore banking is simply a practice of working with an offshore bank. An offshore bank refers to a bank located outside the country where the depositor lives. Usually, these banks may be located in such a jurisdiction with substantial financial as well as legal advantages. Offshore banks provide a continuum of services in connection with financial management, such as, deposit taking, money transmissions, creation of provision of foreign exchange, trade finance, credit facilities, investment and fund management, corporate administration, and trustee services. Creation of a bank account with an offshore bank is great alternative particularly for those who have to travel frequently or someone whose career changes a lot. People prefer offshore banking for a myriad of other purposes such as expansion of your business, tax-free investment, and anonymity with regard to financial matters, asset protection, and estate planning. A specialty of offshore banking is that an account can be opened with an offshore bank simply as a saving account. Account can also be opened to carry out main business functions. Apart from these, through an offshore bank, you can even make investments and take loans. This type of banking has now been legally used by many individuals and corporations worldwide. Offshore banking is usually preferred by people falling under three categories, such as, high net worth individuals, expatriates, and business owners. High net worth individuals are usually people with a non-refundable

income in excess of one million US dollars. Included in the expatriates are people residing oversees away from their country for employment purposes or any other reasons. Business owners are usually those people who own business and whose shares are owned by family members or any other close people. Nowadays, many of the corporate clients including multi national corporations, large industrial as well as trading companies, shipping companies, and banking corporations, are also getting attracted to the benefits offered by offshore banking. One of the prime benefits of offshore banking is that it provides access to economically as well as politically stable jurisdictions. This proves to be advantageous to such people whose residing area has risks of political disorders. There are certain offshore banks that function with low cost base, which in turn can offer higher interest rates to the depositors when compared to their home country. Another great benefit is that it is a great way for developing countries to enhance their economic growth, since offshore banking allows redistributing finance from the developed economies to the developing economies. Perhaps the most prominent of the offshore banking is tax benefits, i.e., most of the offshore banks makes payment of interest without deducting the tax. This is highly beneficial to individuals who do not make tax payment on worldwide income or who do not make payment until the tax return is agreed. Further, many of the services rendered by the offered by offshore banks many not be available from banks located in home country. Offshore banking is usually associated with formations including offshore trusts, offshore foundations, and offshore companies,

which in turn may provide some kind of benefits in the form of tax as well as asset protection. As a healthy competition is seen in the industry of offshore banking regarding tax benefits, it enables to choose the most appropriate facility offering tax advantages. In addition, offshore banking allows you to easily move your assets, if you want to join an employment or spend long periods outside your home country. Other significant benefits of offshore banking are: Since it provides a broad range of features, offshore banking can provide you absolute safety and security - As offshore banks are mostly located in a jurisdiction with sound economic and political condition, it provides stability - Many of the offshore banking facilities assure privacy and confidentiality - Above all, offshore banking system provides flexibility, ie, it provides flexible structure to business owners and expatriates requiring global access to their fund In order to acquire the full benefits above mentioned, it is recommended to review or examine your decision of opening an account with an offshore bank. Primarily, it must be checked whether the offshore bank you have chosen is located in such a jurisdiction that can meet your requirements. The next to be considered is that whether the chosen offshore bank renders all the services it mentions. Despite any challenge, setting up an offshore bank account is considered a wise decision.

Benefits of Offshore Banking for Corporations


Offshore banking has been around for many years. It is synonymous with illegal activities like tax evasion and money laundering. The growth of offshore financial havens like Bermuda, Seychelles, Isle of Man and the Dominican Republic was fuelled by illegal transactions. However the offshore banking industry has started to change because companies have realized the potential of legal offshore banking services. The growth of reputable financial hubs like Hong Kong, Singapore and New Zealand as offshore banking centers have contributed to cleaning the reputation of the service. The banking industry itself is credited with tightening rules and regulations on what is acceptable behavior for banks dealing in offshore banking services. Besides that account opening procedures are now more transparent and it is difficult to hide illegal activities from the surveillance of international regulators. Companies are now beginning to appreciate offshore banking services because it offers numerous advantages such as:

There are multiple currencies allowed in offshore accounts making it more efficient for companies dealing with on a multinational basis. Offshore banking pays out higher interest rates as the interest is exempted from tax. International banking has become a legitimate and secure way for individuals and companies to make tax efficient financial transactions internationally. Companies can spread out their financial transactions so that they can diversify their tax rates. A lot of companies are using multiple subsidiaries to lower their tax obligations in one country.

Offshore banking provides opportunities for good investments especially during economic downturns as offshore regulations may make it a more stable economic situation compared to the companys main country of residence.

Opening an offshore bank account for corporations is not a difficult process and there are many local companies and legal services in these havens to make the process even easier. With an offshore bank account, there can be efficiency in the transfer of funds for companies with multinational branches and dealings. It is essential to find a good offshore banking provider as this make the whole process even more efficient. Many international banking groups have subsidiaries in reputable offshore financial havens so the companies do not even have to change bankers when engaging in such opportunities. If you have a company and is still undecided about offshore banking services, then you might want to research more about the matter or seek professional advice. There is plenty of information available on the subject in the internet while consulting a lawyer well versed in international financial operations would be the best in terms of professional advice.

Offshore banking centers


The development of the concept of offshore banking center is one of the most important legal, social and economic phenomena. This has occurred thanks to a lot of modern factors such as development in technology and communication, the spectacular growth in transnational companies and of course the development of transnational banking. Actually, nowadays the offshore banking activity is seen as the most dynamic sectors of financial activity. However, the well known concept offshore banking brings some negative connotation as well and an image of unethical, illegal or even criminal activity. This is a very narrow view in relation to what offshore banking activity represents in its entirety because it transcends such illegal activities as tax evasion or money laundering. In contrast, many offshore banking centers ensure compliance with international norms and practices. The creation of offshore banking sector is the result of the laws and represents a legitimate phenomenon in itself. The demand for offshore banking services is determined by several factors. Offshore banking centers aim to supply the demand of increase revenue. They take advantage of what in modern times it is called financial sector which goes beyond criminality, illegality and financial abuse or fraud. Today offshore banking centers aim at facilitating taxation for investors, use of modern and sophisticated banking, dynamic investment and mutual funds. Moreover, offshore banking centers view the principle of confidentiality in banking issues as an essential and crucial element which deserves to be protected and guaranteed. At the same time let us not forget that in many parts of the world the offshore banking sector is the main contributor to economic development and growth in the jurisdiction were it exists.

The offshore banking sector developed step by step. The basic structure of tax havens elevated to such sophisticated entity as offshore financial center with multiple financial services, including offshore banking. The movement of banking institutions offshore resulted in a huge scale offshore bank deposits. This resulted in the creation of a big network of onshore external financial centers and onshore-related offshore finance centers. The development of such a big network was primarily possible due to rapid development of telecommunications and air travel. Thus, the offshore banking sector is rightly seen as one of the most dynamic sector. This sector is using heavily in its activity the rapid development of modern technologies and at the same advances it.

What are the benefits of offshore banking?

Offshore banking services provide wide range of benefits and opens up distinct opportunities. Opening such an account provides a powerful tool for keeping money secure and making it exempted from taxes. Using an offshore bank account provides opportunities that are not available to domestic banking users. The most important of those are bank secrecy / confidentiality and exemption from taxes on gains. Income generated in form of interest on deposits is not taxed by the income tax. Customers also get possibility to invest globally. Perhaps the most important benefit that offshore banking provides is that the account is strictly private. The confidentiality of all operations conducted through the account is protected by the legislation. The account is protected from creditors, tax authorities and other interested parties. It is to some extent a defense tool.

How do I get an offshore bank account?

Very easily. Open an HSBC Offshore Bank Account in Sterling, US dollars or Euros in minutes Why to go offshore? According to the offshore financier Terry Neal companies and individuals decide to move to offshore jurisdictions in order to get a better protection, benefit from offshore banking privacy, enjoy the tax-free economic environment and reduce risks and costs. Terry Neal enumerates and analyzes several motivating factors for going offshore. For instance, an owner of an offshore company gets the opportunity to invest in global securities including top performing funds not available to citizens of the country, where the

investor resides. For example, U.S. persons are restricted, not by law, but by virtually all of the worlds top performing offshore mutual funds, from participating in their collective investment. In developing countries, where the financial markets are underdeveloped they provide few investment opportunities; therefore it is natural that local investors seek such opportunities elsewhere. On the other hand, offshore banking account owners get access to full set of banking products that may not be available in their countries and may not appear there for several decades.

Can I avoid taxes with offshore banking?

Most offshore banking centers are at the same time tax havens (low or no tax jurisdictions). Some offshore jurisdictions exempt all incomes from all taxes, while others exempt only those incomes that were generated by sources outside the jurisdiction. Although offshore banking centers do not tax your incomes, your home country may be taxing foreign generated income. So you must check your countrys legislation: if your countries authorities do not tax income generated from foreign sources, then your offshore incomes shall not be taxed, but if they do (like US does), you should report them, otherwise it will be considered as tax evasion.

Is offshore banking legal? It is legal; nobody will come and arrest you for having offshore bank account, or for being a shareholder of an offshore company, or for making an offshore investment. It is absolutely legal service provided by a licensed financial institution that licensed in full compliance with the legislation of a tax haven.

Is offshore banking safe and secure? Offshore jurisdictions are politically stable countries with strong economies and developed financial sector. Financial sector is tightly regulated to eliminate risk of bank failures and ensure a good image of a jurisdiction making offshore banking highly secure.

Is my information kept anonymous and confidential? Most financial institutions in offshore banking centers provide anonymity to their clients. Generally bank secrecy is ensured by a countrys legislation. Degree of bank secrecy varies from one jurisdiction to another; therefore if you are interested primarily in bank secrecy, you should check the legislation first to be sure to what extent your personal information is protected

Which one is the best tax haven? What country is the best option? It depends. It depends what exactly you are looking for. If it is bank secrecy, then Panama may be a good choice. If you are resident of UK and want to go offshore, then you may want to choose services provided by Channel Islands (Jersey, Guernsey, and Isle of Man). The answer varies according to your priorities. We provide here description for major tax havens, so it is up to you which one to choose.

Which banks provide offshore bank accounts? Offshore bank accounts are provided by both local banks operating at offshore banking centers and also by reputable international

banking institutions, such as HSBC and Barclays. Actually you can open an HSBC Offshore Bank Account in Sterling, US dollars or Euros in minutes.

Is offshore banking really linked with criminal affairs and criminal financing? Despite the fact that offshore banking provides bank secrecy, high degrees of privacy and confidentiality, this sector is strictly regulated and supervised business and this leaves very small space for criminal affairs. Opening an offshore bank account is not as simple as it may seem at the first sight. There are a few organizations like Financial Action Task Force (FATF), Basel Committee and the Offshore Group of Banking Supervisors (OGBS) that impose strict regulations on offshore banking sector of a tax haven. Tax havens that do not comply with the regulations imposed by these organizations risk to see themselves in a black list. This makes it almost impossible to transfer funds banking institutions from jurisdiction that is in the black list. Such approach makes tax haven authorities interested in to reduce or completely eliminate illegal transaction and makes very hard for criminals to engage in money laundering. So it is very important that the bank your choice has good reputation and is incorporated in a tax haven that has good reputation.