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How To Find Safe Offshore Banking You'll Be Happy With. |
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Submitted by Benton Bernhardt
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You might want an offshore Swiss account in order to:
- Expand your business;
- Minimise your taxation;
- Simplify business administration;
- Asset protection;
- Estate planning;
- Financial anonymity;
- Tax-free investing.
Those who engage in international or online business and who generate a large tax exposure can legally ease their burden through an offshore account. Bear in mind that the Swiss government charges a 35% withholding tax on interest earned by accounts held by foreign residents.
Also, cheques are not used any more in Switzerland. This is a nuisance if you're used to dealing in them.
Many people think that a Swiss bank account is somehow dodgy or unsafe because they are not banking in their home country. This is untrue. Some Swiss banks have been around for over a hundred years. They are the same as your local bank account; just in a different country.
You can pay revenues from your offshore company into it, transfer funds to your other accounts, such as a local bank account used to pay daily expenses and bills, or cover any outgoings that you may still have in your home country.
Participating in international commerce is even easier now because of the World Wide Web. Many businessmen have signed up for Swiss bank accounts in order to manage their funds, protect their privacy, increase financial security and the tax haven benefit.
Offshore savings accounts offer preferential interest rates acting like any other regular savings account. You can make deposits and withdrawals, earning interest calculated on your account balance at the end of each day, which is added to the account twice a year, or more often, depending on your contract.
One of the most common misconceptions is that offshore savings accounts and general offshore banking can legally prevent assets from being subject to personal income tax on interest.
Certainly some have low or no taxation. However this exception is generally associated with certain persons' accounts meeting fairly complex requirements.
The 'no-taxes' conception is incorrect as the personal income tax of most nations makes no distinction between interest earned in local banks and those earned abroad, adding clauses to enforce tax payments.
For example, all individuals and corporate entities subject to US income tax are required to declare, on penalty of perjury, all the offshore bank accounts they may have and pay the corresponding taxes.
While some offshore banks report their clients income to other tax authorities, most of them do not, but this does not make the non-declaration of the income or the evasion of the tax on that income legal.
Offshore savings accounts are not for evading taxes but for investors who want to take advantage of the foreign exchange allowance diversifying their assets by placing some of their funds in a secure offshore location.
There are no guarantees provided on offshore savings accounts but, as with any regular local savings account, your capital is secure and so is the published rate of interest on your capital.
These accounts are classified into:
No Notice Accounts, which are those that do not require notice to be given to withdraw funds. Account features include:
- Minimum balance requirements;
- Minimum amount of transaction;
- Limits to the number of withdrawals;
- Rate guarantees and bonuses may vary depending on which account you choose.
Monthly Income Accounts: These are accounts that pay monthly interest. They may be no notice accounts, if they do not require it, or notice accounts, that mean those where notice must be given to withdraw funds without penalty. Account features are similar to No Notice Accounts.
Interest Paying Current: These are accounts offering the facility of a chequebook or cash card that does not require any notice to be given to withdraw funds. Due to their nature, these accounts vary in the facilities offered such as debit cards, check guarantee cards, overdrafts, etc. Account features are similar to No Notice Accounts.
Notice Accounts - are those accounts requiring notice to be given to withdraw funds to avoid any penalty, including loss of interest. The amount of notice that needs to be given varies with the account you choose. Account features are the same as previous and in the case of bonds there will be a maturity date that marks the end of the account term.
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