Guide to Essential Money Tools

Expat Money Tools

Money tool - offshore finance centres

Etheios

Banks operating from offshore financial centres (OFCs) traditionally aim their services at wealthy expatriates. Services provided by offshore banks range from deposit taking (in various currencies) up to full-scale private banking.

Because the sector is very highly segmented, almost all categories of customers are catered for. While wealth is a conventional segmentation criterion, customer nationality is often equally important, and banks may refuse customers on this ground. Offshore banks are often subsidiaries of large international banks, or locally owned banks able to sell high- quality services produced by large international banks.  While banking offshore is usually not forbidden in itself, not paying one’s tax where one should, certainly is.

Because the legal features of OFCs are undergoing constant change, consulting a reputable tax lawyer is an indispensable prerequisite to becoming an offshore bank customer. For instance, many OFCs have modified their legal features (such as withholding taxes on interest income) in the face of OECD pressures over the last years. Nowadays, detailed identity checks are thoroughly enforced and bankers are required to know the origins of the funds entrusted to them so as to preserve their reputation. Keeping assets offshore is usually of best advantage to those already living in low tax countries or benefiting from favourable tax treatment allowing them to use the OFC’s tax features. Expatriates working in unstable countries may also benefit from becoming offshore bank customers so as to keep their assets invested in strong currencies, in politically stable countries enforcing the rule of law and also world citizens who change countries often may want to become offshore bank customers so as not to have to regularly change their banker.