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Offshore Banking: Safe Haven in a Storm
By admin | January 8, 2009
Every individual has his or her own reasons for keeping money offshore. Sometimes it’s taxation, asset protection, higher returns or simply a refusal to play the ball game the government wants – or maybe an even more intangible, ideological reason such as “offshore feels right”.
But all offshore investors have one thing in common at the moment: a fear of going offshore because of the unknown. Will the offshore bank collapse with no deposit insurance? Will a hostile foreign government seize my funds?
The good news is that there are over seventy offshore jurisdictions competing for your business, and I am not aware of a single ‘offshore’ bank having collapsed during this entire crisis. Why? Because offshore banks truly are more stable and more prudent. Perhaps a better word is conservative. Your typical private bank would never dream of making a sub-prime real estate loan. While my friends in Andorra tell me that in the recent Madoff scandal, the total exposure of the entire Andorran banking system was under 300,000 euros. That is miniscule compared to the billions collectively lost by Santander, HSBC and others of that ilk.
With low or no tax, no stifling bureaucracy, no foreign exchange control, and stable political regimes (no Central Bank trying to manipulate the currency on a daily basis) offshore banks can achieve excellent returns for their shareholders in other, much less risky ways. Most of the OFCs (Offshore Financial Centres) broadly specialize in financial, corporate and administrative services promoting them as the key industries, which is another guarantee of stability. Going back to the Andorran example, the rule is that if one of the banks there were to fail, the other banks have to step in and make things right. This kind of peer group pressure is a very effective regulatory system… much better than having government employees or political appointees regulating banks.
Financial problems touch every country but to a different extent. Even small, little known Caribbean islands can be “safe havens” in a storm.
So although some small investors are pulling in their horns, entrenching their positions and withdrawing their money from offshore, the smart ones realize that the “offshore safe haven” concept is more applicable now than ever.
Of course, it’s worth pointing out that not every offshore bank is safe. You still have to do due diligence. But if you follow the advice on due diligence here at petermacfarlane.net, you can manage the risk so effectively that it almost disappears. And of course, rule number one is diversify, diversify and diversify again. It may be a little more costly and inconvenient to distribute your capital among several different banks, but remember – return of your investment is more important than return on your investment!
So go ahead, don’t hesitate. Incorporate your company, corporation, LLC or trust offshore, open a bank account at a reputable offshore private bank, and deposit your funds with confidence. your title to different assets to the company. Besides that, going offshore is an excellent opportunity to diversify in terms of currencies too. All offshore banks offer accounts and investment facilities in multiple currencies. Offshore you will gain access to a comprehensive choice of foreign currencies and other saving instruments (like precious metals) to create your own savings portfolio that will protect that most insidious of taxes: inflation.
You don’t necessarily even need to travel to open your offshore bank account. You can easily set-up a company and open a bank account staying at home, with no need to travel. You can operate your funds from your any computer using ultra-secure secure internet-banking systems. All major debit and credit cards are available to access your funds via ATMs in nearly any country in the world.
These steps are easy and affordable. I offer complete packages of offshore corporations and bank accounts for as little as EUR 2,995. Yes, you can find cheaper elsewhere, but it’s worth pointing out that I include many extras – not least a secure e-mail set-up so you can communicate in confidence with myself and your chosen bank in the event that you have a question. This is something the “pile ‘em high, sell ‘em cheap” school of offshore service providers doesn’t offer. Very often when they say they will open an offshore account for you, all they mean is they will send you the papers and let you do all the work yourself!
Anyway, I’ve rattled on enough for today! Just a quick final note. The new 2009 Practical Offshore Banking Guide is available for download in the Members’ Area at the Q Wealth site. If you enjoyed this article but haven’t yet read the guide, I highly recommend it. In around forty pages of easy reading, you will know more about offshore bank accounts than many of the people who are trying to sell offshore services on the internet. If you’re not a member of Q Wealth yet, you can sign up online by following the link above.
Blogging from somewhere offshore, this is Peter Macfarlane wishing you a very Prosperous New Year and signing off…
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Topics: Banks and banking offshore | 1 Comment »
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March 15th, 2009 at 11:04 am
[...] (basically offshore banking) industry, alongside the players I more frequently write about such as Andorra, Liechtenstein, and Luxembourg. These three little states have a lot to offer in terms of offshore [...]