Friday, 08 May 2009 06:57
An offshore bank account is the choice of many people who want to lower their tax burden. Are you in that boat? We have analyzed dozens of offers from offshore banks and made up a list of jurisdictions with the lowest fees.
Anyone can legally open an offshore bank account in many countries around the world. Their allure is much more noticeable during tax time, when people need to report their earnings to the IRS.
With around 50 countries in the world offering tax benefits for foreigners, it makes sense to search which offshore center is the best to open an account. However, this process can take a lot of time and efforts without a little assistance.
Offshore financial centers can considerable vary in terms of cost. There are some jurisdictions, like Liechtenstein or Austria where paying considerable fees is inevitable. On the other hand, you can find jurisdictions where tough bank competition has driven the prices down.
Generally, the amount of fees for opening an offshore bank account will depend on the offshore service provider, the level of competition in the market, the reputation of the jurisdiction and the general cost of business operation in the country.
Offshore banks typically charge fees for an account opening, internet banking, issuing plastic cards, sending documents by registered mail or courier, etc. These costs can be either paid in advance or deducted from the bank account once it is opened.
If you hire a consultant, add fees for his assistance with account documentation and processing as well as any out-of-pocket expenses (notary and apostille fees, certified copies, express courier fees, etc.). All fees should be discussed in advance.
Depending on the amount of opening fees, we have chosen 10 cheapest jurisdictions to open an offshore bank account:
• British Virgin Islands
The British Virgin Islands (BVI) is an English speaking country in the Caribbean. It is one of the oldest and most reputable offshore centers. BVI has flexible and dynamic banking sector, with a lot of strong commercial banks, for example First Caribbean International Bank, FirstBank BVI and VP Bank (BVI).
Belize is an English speaking country located on the Caribbean seaboard of Central America. It has been in the offshore business since 1990. The financial services sector is supported by laws passed to encourage investment in offshore international enterprises. There are several commercial banks in the country: Atlantic Bank, Alliance Bank, Belize bank, First Caribbean Bank and Scotia Bank.
The Seychelles are an independent English speaking island located in the Indian Ocean. Their offshore legislation was enacted in 1994. Since then the Seychelles have become an important tax haven. While there are several banks operating in Seychelles, the most popular is Barclays Bank Seychelles.
The Commonwealth of Dominica is an English speaking country located in the Eastern Caribbean. It is a relatively new entry to the offshore market. The financial sector in Dominica consists of several commercial banks, including Scotia Bank, First Caribbean International Bank, Royal Bank of Canada and the National Bank of Dominica.
• St. Vincent
St. Vincent and the Grenadines is an independent English speaking country located in the Eastern Caribbean. Its international finance sector is rather small. It includes such banks as First Caribbean International Bank, Bank of Nova Scotia, Caribbean Development Bank and RBTT Bank Caribbean Ltd.
• Isle of Man
The Isle of Man is very popular for private banking services for British expats and foreign nationals living in the UK. This offshore center is well-known for the high level of investor protection. Financial institutions include Abbey National Offshore, Anglo Irish Bank, Bank of Scotland, Standard Bank Offshore, Coutts ltd, etc.
The Republic of Panama is a Spanish speaking country located in Central America. It is one of the earliest offshore centers with approximately 150 international banks. They include Banco General, Global Bank, HSBC, Citibank and Multibank.
Antigua and Barbuda is an independent, English-speaking country in the Eastern Caribbean. It is a politically stable and safe jurisdiction for offshore bank accounts. The main banks are Antigua and Barbuda Development Bank, Antigua Commercial Bank, Antigua / Barbuda Investment Bank Ltd, Bank of Antigua, First Caribbean International Bank Ltd, etc.
• Cayman Islands
The Cayman Islands are well-known as a sophisticated, mature and safe financial center. There are over 250 licensed banks, including the Bank of Nova Scotia, Barclays PLC, Cayman National Bank, Royal Bank of Canada and others.
The Bahamas is one of the dominant tax havens in the offshore financial world. Financial services produce about 15% of GDP. It is the second-largest industry in the country after tourism. There are over 301 banks - Barclay's Bank PLC, Citibank N.A., Bank of The Bahamas, etc.