Though the term ''offshore banking'' is commonly associated with money laundering, tax evasion, and organized crime, it is a perfectly legal banking alternative which comes with both pros and cons. Put simply, offshore banking is the system by which a depositor utilizes a bank in a location outside the account holder's country of residence. The main draw for depositors is that offshore banks are typically located in areas designated as ''tax havens'' where taxes are levied at very low rates. In some instances, the tax rates at offshore banks are nonexistent.
Act Now! Activate a FREE three days trial to FinancialServicesCrossing.com, because you know how important it is to know about all the jobs.
Americans who have accounts in offshore banks are required by law to declare any and all such accounts when completing income taxes or evaluating total assets.
Advantages
In addition to the lower tax rates, offshore banks offer the following benefits:
Enhanced bank privacy
Fewer and more relaxed restrictions
Easy access to deposits
Funds are protected from political or civic unrest
This last benefit is especially important because many offshore banks are located in island nations, notorious centers of political unrest and economic uncertainty. Nations suffering from extreme poverty like Belize also try to attract foreigners with the hope that they might invest some of their offshore holdings in the nation's underdeveloped economy.
Not all offshore banks are located in economically depressed areas: Switzerland, Andorra, and Luxembourg are all wealthy, independent states with strong and well-established offshore banking industries. Of course, if the account holder lives in a nation with a stable political and/or economic environment, then it might be moot to consider investing abroad.
Offshore banks may also offer competitively higher interest rates in accordance with both lower operating costs and federal intervention.
Americans who have accounts in offshore banks are required by law to declare any and all such accounts when completing income taxes or evaluating total assets. Failure to do so is tantamount to perjury and carries stiff and severe penalties.
In the wake of the attacks on September 11, 2001, there has been an attempt to increase regulation of foreign accounts in order to curb any funds being illegally moved or allocated for what may be construed as illegal activity. Many in the offshore banking industry have resisted these calls for reform, saying that they will quickly translate into unnecessary regulations and increased fees, and open the gate for domestic banks and tax agencies to access money in offshore accounts. Moreover, they contend that offshore banking is vital to the interests of competition, which keep the markets from growing too expansive or monolithic.
Another advantage to offshore banking is that it provides an incentive for underdeveloped island nations to expand their economies and attract foreigners from industrialized countries. Places like Bermuda and the Cayman Islands are famous not only for their tourism, but for the plethora of banking opportunities for investors from North America, Europe, and Asia.
Among the many traditional banking services, offshore banks provide the following services:
Deposit taking
Credit
Wire and electronic funds transfers
Foreign exchange
Letters of credit and trade finance
Investment management and investment custody
Fund management
Trustee services
Corporate administration
Disadvantages
Like most financial services, offshore banking is not without its own dubious history and has been connected numerous times to the funding of organized crime through illegal money laundering. It has also been connected to the Mafia and to various terrorist groups before and after 9/11.
Another disadvantage is the logistical difficulty encountered because of geographical differences. It is not always easy to access funds in a foreign nation when it is many hundreds (if not thousands) of miles away. With ever-expanding modern telecommunications, however, these issues are few and far between.
Offshore banking is also frequently considered the domain of the privileged and requires rather high incomes for eligibility. The cost of establishing and maintaining offshore accounts is not slight; there is no such thing as 'free checking' for foreign account holders.
Also, in order to maintain tax revenues in countries providing offshore banking services, the burden tends to fall on middle-income groups whose taxes are raised when the tax rates on offshore accounts are held steady or even lowered. Many economists believe this to be exploitation of the native working class and are working to bring attention to their plight.
Statistics
Financial experts believe that up to half of the world's capital is held in offshore accounts, an astounding figure when one considers that tax havens like Cyprus and Hong Kong contain barely more than 1% of the world's population. Almost a full third of the profits of American multinational corporations are held in offshore accounts. You might also be surprised by the following statistics:
One-third of the world's wealthiest individuals are estimated to have holdings in offshore banks totaling $6 trillion (yes, trillion).
Approximately $3 trillion is held in deposits in tax haven banks with the remaining $3 trillion held in securities by international business companies (IBCs) and trusts.
Between 2% and 5% of global economic output (approximately $600 billion and $1.5 trillion) is laundered illegally each year.
Offshore banking is the main vessel through which most of the world's drug money is believed to be laundered. Some estimates place this figure at $500 billion annually, which exceeds the combined total income of the world's poorest 20%.
Andrew , Columbus, GA
The best part about EmploymentCrossing is the simplicity of the site. It is a very user friendly website.
Jamie , Pueblo West, CO
EmploymentCrossing is a very user friendly website and has a fantastic search engine. I always got quick responses to my search criteria.
Keith , Staten Island, NY
EmploymentCrossing's search engine is excellent. You can search jobs on the basis of specific locations and practice areas.
Carolyn , Harrisburg, PA
I would definitely like to join EmploymentCrossing again if I need to switch my job in future. It was a lot more helpful compared to other websites.
Meg , Oak Park, IL
The email alerts sent by FinancialServicesCrossing are cool. I got a job through this feature of the website. Thanks!
To compare FinancialServicesCrossing with other job sites
Financial Economist United States-KS-Kansas City
Join the Department of Housing & Urban Development (HUD) team if you are looking for a challenging career and want to help individuals achieve the ...
The best part about EmploymentCrossing is the simplicity of the site. It is a very user friendly website.
Richard , Baltimore, MD
The number of jobs listed on FinancialServicesCrossing is great. I appreciate the efforts that are taken to ensure the accuracy and validity of all jobs.
Allison , Chicago, IL
The best thing about FinancialServicesCrossing is that you can upload your resume and also have the option to apply online.
See Every Financial Services Job We Can Find on the Internet!
Unlike other sites, FinancialServicesCrossing works for you and does not charge employers to post jobs and actually goes out and researches jobs for you. The jobs you see are the jobs we find for you and not the ones employers are paying us to post.
To compare FinancialServicesCrossing with other job sites
FinancialServicesCrossing - #1 Job Aggregation and Private Job-Opening Research Service — The Most Quality Jobs Anywhere
FinancialServicesCrossing is the first job consolidation service in the employment industry to seek to include every job that exists and not charge employers to post jobs on its site.
FinancialServicesCrossing uses sophisticated technology and manual work to comb employer websites and other job boards for jobs and bring them all to its site.
