An offshore bank account is simply an account held with a bank which is located in a country other than the country in which someone is resident. So, for someone residing in Canada, any bank account held outside Canada would be considered an offshore bank account.
Offshore bank accounts have been a highly coveted privilege of the wealthy for centuries and it is no coincidence that estimates place the total wealth held in offshore bank accounts at around one-third of the world’s total wealth. The good news is that with the advent of globalisation and the wider access to information, the benefits of an offshore bank account are no longer restricted to the super wealthy.
An offshore bank account is typically associated with a very high degree of confidentiality. The reason for this is that the most renowned offshore banking jurisdictions, such as Switzerland, Luxembourg or the Cayman Islands, have adopted extremely strict laws protecting account holders, to the extent that any bank officer who releases information relating to the bank account holder or any transaction passing through the account would be guilty of a criminal offence.
There can be several reasons why someone would like to keep funds deposited in a confidential offshore bank account. It could be the wish to protect personal wealth from the risk of a lawsuit or perhaps a divorce settlement or it could simply be the desire to maintain privacy for someone who is a celebrity.
The maximum level of confidentiality is obtained by maintaining the offshore bank account in the name of a company and not that of an individual. It is therefore preferable first to establish an offshore company and then to use that company to open the bank account.
An offshore bank account can be a great benefit if you live in a country whose banking system does not offer the level of security you would expect. Over recent years there have been a number of instances of a country’s entire banking system coming to the brink of collapse, as happened in Greece as recently as 2015. By keeping your wealth in an offshore bank account located in a jurisdiction which is renowned for security of capital, you would be protecting it from such unexpected risks.
While an offshore bank account is located in a foreign country, access to the funds is quite straightforward, typically through the use of online banking facilities and credit or debit cards. Some banks offer cards which may be used for purchases in stores, while others restrict their use to withdrawals at ATM machines.
Please be aware that offshore banks are highly vigilant and will not tolerate the abuse of their services by persons whose activities are of a doubtful nature. Should a bank have reason to suspect that transactions passing through an offshore bank account may relate to criminal activities, such as terrorism, money laundering or drug trafficking, it would be obliged to report this to the authorities.
Offshore Company Solutions has relationships with a number of major banks throughout the world and would be very pleased to assist in establishing an offshore bank account for you. Please contact us to discuss your specific requirements, so that we may advise you on the various options available to you.