What is off-shore banking and who provides it?
Some of the high street banks and some specialist banks offer an off-shore service. This is where the money is kept in an account in a different country and sometimes currency. Many accounts offer euros and dollars for example.
Benefits
- The customer is not at the mercy of fluctuations in exchange rates.
- Money can be put into an account provided by a bank at home, but is located off-shore, is so that the complications and uncertainties of banking with an overseas provider are mitigated.
Tax Savings
Off-shore banks also offer services in countries which have lower tax regimes, thus saving the customer money in tax and they often also offer a lower cost base and a higher interest rate than is available in the country of residence, thus giving better value to the customer.
Interest is paid by off-shore banks without deducting tax, which can favour those who do not pay any tax as well as those who negotiate their tax return.
Additional Services and Security
Off-shore banks can offer services which are not available in the country of domicile, such as paperless bank statements. In some countries it is legally necessary for the bank to have in place deposit protection insurance on any account that is held.
Off-shore accounts can offer security to those who live in countries where there is corruption in domestic banks or where there is an uncertain political or economic environment.
Off-shore banking facilities are provided by most of the main high street banks, some of the building societies and some specialist providers as well. Levels of security vary, as some banks are well aware that off-shore banks can offer a haven for illegal money-laundering. Other institutions are less concerned about this.
