Bank Accounts

Offshore Bank Accounts

Offshore bank accounts are those situated in a different jurisdiction to that in which the account holder is resident. Standard benefits include fewer financial restrictions, privacy, asset protection and access to higher-yielding investments.

Typically offshore bank accounts are found in tax havens such as the Cayman islands, Switzerland or the Channel islands. These jurisdictions have a reputation for banking secrecy which investors value and expect them to maintain. However recent trends have led more towards offshore bank accounts in less obvious tax havens.

A great contributor to this trend has been continued pressure from the United States, EU and other high-tax countries to shut-down offshore tax havens by blacklisting them, and encouraging their own banks to refuse financial transactions with these countries.

The challenge for US and EU citizens who would like an offshore bank account is to find a jurisdiction that has not been declared an "offshore financial centre" by the US, and thus not subject to unwanted attention and invasions of financial privacy.

The most dangerous threat to financial privacy in recent years has come from the Patriot Act. It requires any bank with a US Dollar correspondent account to hand over customer information on demand, regardless of the privacy laws in that country and whether or not a transaction is suspicious. Furthermore if a country has a tax-information treaty with the US, that country's law can be overridden to gain access to their confidential account information.

Another attack has come from the EU savings tax directive, which requires all banks in EU countries and their dependencies to report customers' income to their home country, or deploy a withholding tax. This directive therefore has influence over a host of tax havens which are EU dependencies such as the Channel Islands, the Isle of Man, the Cayman Islands and Gibraltar among others. The pressure to farm taxes has grown to such an extent that even Switzerland, former bastion of secrecy, has opened the castle gates and is now paying withholding tax to the EU for its foreign depositors.

Further demands have originated from the OECD which has published a blacklist of 'un-cooperative' tax havens. Bureaucrats are currently busy compiling a new list to be published sometime in 2009.

As a result, some of the safer places to bank offshore are those not considered in any way tax havens, and do not fall under the influence of high-tax governments or information sharing agreements. This is the approach that Capital Conservator takes with its own offshore banking services, ensuring that all client bank accounts are risk managed and don't suffer from undue attention. To this end the two main jurisdictions Capital Conservator uses are European but NOT part of the EU, NOT part of the EU Savings Tax Directive, and are not affected by the Patriot Act.

US Bank Account

An interesting fact about classification of offshore tax havens is that the US is in fact the biggest tax haven in the world, if you are not a US citizen. Thousands of new offshore companies are incorporated yearly in the US State of Delaware.
US bank accounts are also highly valued by non-us citizens looking to do business in the US or to protect their assets from their home government.

Additionally, dollar accounts in the US do much to support a businesses credibility when dealing with clients. US accounts are often hard to come by without visiting the country in person or detailed references, however through a trusted partner Capital Conservator can offer US Bank Accounts at very affordable rates.

Non resident bank accounts

A non-resident account is an account in a financial institution that is owned by persons or institutions from outside the country in which the financial institution is chartered. Similar to offshore bank accounts, non resident accounts can offer significant tax breaks or higher rates of interest. For residents of politically or economically unstable countries, non-resident accounts often give peace of mind to those at risk of having their assets seized, because often the non-resident account will be outside the reach of their home government.

Swiss Bank Accounts

Switzerland is for many the original tax haven and its banks have a reputation for secrecy and client relationship management that has been successfully maintained for many decades. However recent erosions of privacy within their offshore banking services, including the release of the personal details of many US clients of the Swiss bank, UBS, have called this reputation into question.

Pressure from its high-tax European neighbours and the US has effectively tied the hands of the Swiss government, forcing it into agreements of greater co-operation such as the EU Savings Tax initiative (Switzerland is not even part of the EU). It remains to be seen whether future developments will allow investors to continue to have confidence in their "offshore" swiss bank account, but for now, Capital Conservator recommends that other offshore jurisdictions be used.