5 Things About Offshore Banking Every Online Business Should Know

"Offshore Banking" - maybe this term conjures up images of
secret Swiss accounts, James Bond, and sipping Martinis at
a chalet in Lichtenstein. The fact is though that doing a
portion of your banking in a financial institution outside
of your national borders is not only easy, it also offers
numerous benefits to those who make their living via the
internet.

In this article, we will explore some of these benefits. We
will also try to answer some of the most common questions
regarding offshore banking in the hopes of demystifying the
topic for the benefit of our fellow internet marketers and
others who make their income online.

1. Is Offshore Banking Legal?

This is among the first questions asked when discussing
this topic. The answer is YES. Many of the largest
companies in the USA do their banking offshore including
Exxon and Boeing, among others. You do not need to be a
giant corporation though to reap the benefits of an
offshore bank account as we will soon explain.

You may wonder why you don't see many ads for offshore
banking. If you live in the US, the reason is that federal
law denies international banks the right to advertise
within the borders of America. Of course this is to the
benefit of domestic banks.

Remember, you have just as much legal right to a bank
account offshore as you do to a domestic account.

2. Why Bank Offshore?

For the internet marketer and any business that creates
income online, there are several benefits to having an
offshore bank account. These benefits encompass privacy,
asset protection and wealth building.

One concern that offshore banking helps deal with is
privacy. The current laws in some countries, including the
USA, allow the government full access to anyone's domestic
financial information for almost any reason at all. The act
of creating a foreign bank account helps make some of your
assets harder to access by those who should be minding
their own business. A good foreign bank will usually not
require your Social Security number, they won't answer
questions from US sources about your credit and banking
history, and they will not provide your financial
information to any domestic data collection agency.

An offshore account can also help you with wealth building.
First, there are the tax advantages. Offshore accounts can
be arranged in jursdictions that do not impose taxes on
income earned abroad. This can be very beneficial when
arranged correctly. There is also the ability to earn a
higher return on your investments with an offshore account.
Many foreign banks are not as tightly regulated as domestic
ones and can offer higher interest rates on accounts. This
is due to their ability to make more lucrative investments
and also the fact that the overhead to operate a bank is
lower in many countries.

Finally, the ability to expand your business globally
increases when you create an additional bank account
outside your own borders. Many offshore banks allow you to
do business and hold your funds in multiple currencies.
This allows expansion of your customer base which in return
can help increase profits.

3. What Country Should You Bank In?

Choosing the jurisdiction to do your offshore banking in
will depend on a combination of your business situation,
asset planning goals and even to some extent your personal
taste. There are several factors that should certainly be
considered when doing your initial reasearch though.

Is the country your are considering a stable country? You
usually do not want your account in a country where coup
d'etats are a regular occurrence. On the other hand, if the
financial system is strong enough, it will withstand even
political turmoil as in Panama when Manuel Noreiga was
forcibly removed by an outside government. Most of those
with bank accounts and corporations in Panama were not
affected by this, since the financial system had a solid
backbone.

What are the country's banking secrecy laws? There are
still several countries with strong banking secrecy laws
who will go all out to protect your financial privacy as
long as you are not breaking the law. Switzerland and
Panama come to mind immediately for not bending to
international pressure to allow outside government agencies
to peer into their customers' accounts whenever they want.

How far away is the country? Some individuals prefer their
offshore accounts to be geographically close, since the
time zones are often similar and communication is a little
more convenient. Americans might prefer their offshore
accounts to be located in the Carribean or Latin America,
while a citizen of the U.K. might prefer an account at an
institution located on the Isle of Man, all other
considerations being equal.

4. Accessing and Managing Your Money

Thanks mainly to the internet and advances in international
communication technology, offshore banking is fairly
straightforward. Most accounts can be arranged with online
access to your information. Transfers of funds can be done
online as well. As far as accessing your money, most
offshore banks will offer a debit card with your account so
you can retrieve your money whenever you want, wherever you
are from most ATMs.

As you can see, accessing and managing your funds in an
offshore account need not be any more difficult than doing
the same with a domestic account.

5. Acquiring an Offshore Bank Account

Once you decide that an offshore account is right for you
and you have done some further investigating to select the
appropriate country to open your account in, the actual
process of acquiring the account can be relatively
straightforward.

There are a number of legitimate offshore financial
planning and asset management firms who will complete and
submit all the paperwork for you for a reasonable fee. The
advantage to this is they usually have connections with the
banks they represent and can arrange your accounts more
quickly and easily. Also, they can often offer you added
perks such as secured credit cards, merchant accounts and
incorporation services.

Be sure to compare the fees charged and services offered
and always get feedback from previous customers. Of course,
be wary of any offers that sound too good to be true, such
as outfits offering unsecured credit cards with your
offshore bank account. This is almost impossible to arrange
with a new account, and anyone offering an unsecured credit
card offshore may just be planning on taking your money and
disappearing.

Otherwise, do your research, ask questions and check
testimonials. Deal with a reputable firm and you will be
well on your way to reaping the benefits of an offshore
bank account.

We hope this article has helped not only clear up any
misconceptions about offshore banking, but also given our
fellow internet marketers pause to consider this financial
tool as part of their overall wealth building and asset
protection plan.

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James Allen is the editor of GatesToWealth.com, which
introduces offshore banking and other instruments of
offshore asset protection to online businesses and internet
marketers. To learn more and subscribe to 'Mind the Beach'
- their offshore living newsletter - just swing on by:
http://www.gatestowealth.com