7 min read

3 Critical Ways an Offshore Bank Can Protect You

Mariliza Karrera
Content Writer
hipster businessman

Offshore bank accounts can benefit and protect you in many ways, some of which you may have not even considered. Let's take a closer look at how they can help you.

A lot can be said for western domestic banks. But despite the stability that most banks promise and the financial security for deposits they claim to provide, the truth is that your money will always be better off in offshore banks.

Not only are offshore banks ideal for savings accounts, as they generally offer higher interest rates, but they can also provide the kind of financial security everyone wants.  

There are many reasons western domestic banks are no longer able to cater to the needs of bigger clients. But the main problem is that they can no longer provide the kind of security their customers desire as the world economy is going through an unprecedently turbulent period.

The economic state of the world is not unrelated to world politics which is going through a period of power redistribution. And it’s precisely because the two concepts (politics and economics) are so interconnected that it’s impossible to say that western banks are risk-free.

For people with large saving accounts, this turbulent state of affairs could prove even more dangerous as he or she could end up cut off from their money overnight. This is causing more and more people to redirect their money to offshore bank accounts where it can be more secure.

To make a more informed decision regarding opening an offshore bank account you need to understand how an offshore bank can protect you and your money.

Protection from Financial Shocks

If you are new to the business world, you might think that a domestic financial institution regulated by the US or EU will provide more security for its clients, but unfortunately, that is not the case. As was made evident by the financial crisis of 2008, banks in the US, as well as in the Europe are in fact at risk because they are regulated by the governments of their countries.

Apart from all the politics that get in the middle of the banks running their business, there’s also the fact that western domestic banks keep the smallest financial reserves possible. A practice that leaves them particularly exposed to risk.

So long as the markets are strong the illiquidity of the banks is not a problem as the markets can move without using actual cash, but once the market hits rock bottom problems start coming up, and you could easily end up without access to your money.

If there’s one thing that the past decade has proved to us beyond a doubt is that western countries and banks are highly insolvent which means that should they end up being in your debt you aren't likely to get your money back. Keep in mind that to protect themselves the banks and their governments won’t hesitate to demand a capital levy.

Offshore banks are safer in this respect as they are healthier. Most offshore banks are located in well-capitalized jurisdictions which are politically and financially stable. For example, Singapore is an excellent destination for your money as its banking system doesn’t even have a single failure to speak of. This makes Singapore one of the safest places to open a savings account and the three banks with which Starting Business works with in Singapore(DBS, OCBC, and Standard Charter Bank ) are excellent institutions that will ensure the safety of your capital.

Banks in the Middle East are also great options as offshore banks as they are generally well-capitalized. For example, Emirates NBD , a bank Starting Business works with, has the largest branch network in the UAE. Other offshore havens, such as the Cook Islands, for example, hold their deposits in cash and don’t give loans, which essentially means that your money will be available at any given moment. So, if cash liquidity is your main concern you should really consider opening an offshore bank account with Capital Security Bank which holds both an international and domestic banking license and provides comprehensive security for its clients.

Open an Offshore Account Today

Starting Business can help you to open a personal bank account with Emirates NBD Bank - the leading bank in the UAE.

Protection from Asset Seizure

Another important benefit of an offshore bank account is that it can protect you from liability. As you probably know, the more money you or your business make, the more liable you are to investigations and lawsuits, and this is a problem an offshore bank can help you with.

Banks in the US and Europe are closely monitored by their governments, and they are required to report any activity that appears to be suspicious. This includes anything from large deposits to five digit withdrawals, and although it may not relate to illicit activities, your bank will have to report you just the same which could trigger a government investigation. Apart from business-related issues that may arise from such an investigation, you should also consider the fact that these investigations can lead to the freezing of assets as well.

The truth is that anything could trigger an investigation by your government and whether the investigation is justified or not, the result is the same your assets will need to be frozen until the investigation is completed. This could mean that you will be cut off from your money for months.

An offshore bank account can easily prevent this from happening as it’s not as simple or straightforward to freeze the assets of someone whose bank accounts are offshore. Even a lawsuit from an antagonist could result in an investigation which will freeze your assets and consider whether allowing your competition to put you in this position is reasonable or not.

These unwanted scenarios can easily be avoided if you decide to open an offshore bank account. You can even open a bank account online which means that keeping your assets protected is as simple as clicking a button.

Protection from Capital Controls

Since the financial crisis, capital controls have become routine for many western countries which are having economic problems.

Capital controls are prohibitions imposed by governments that are bankrupt or are at the verge of bankruptcy and they are put in place to regulate the flow from capital markets into and out of the country’s capital account. The restrictions come in many forms and although we are more familiar with the more economic-wide capital controls that have been imposed in countries such as Greece, they can also be sector or industry specific which can turn them to a concrete obstacle to economic growth.

What this means for the individual with a savings account that exceeds five digits is that it can be impossible to do business or secure your money. Capital controls restrict exchange transactions, wire transfers and even withdrawals which are essential in conducting a business or even getting your money out of the country to secure it.

Having your savings account in an offshore bank means that you’ll never have to worry about capital controls as countries which are considered tax havens have minimal debt. You’ll never need to worry about capital controls as the country’s highly unlikely to ever go bankrupt.

An offshore bank can protect your money as well as your future so it’s important that you take the necessary steps to open an offshore bank account soon. Luckily, you can now open a bank account online which means that the process has become even more straightforward and the fifty jurisdictions that Starting Business works with won’t even require your physical presence to open an offshore bank account.

Open an Offshore Account Today

Starting Business can help you open an account with Standard Chartered Bank for your daily banking needs, asset management or investments.

Types of Accounts Available

Starting Business offers various types of accounts that you can open online in a completely stress-free process. Both the personal and corporate accounts can benefit you as they offer many perks which you won’t find in any of the services provided by domestic western banks.

Among the many perks offshore bank accounts offer are high-interest rates which can help you accumulate wealth by simply depositing your money in an offshore bank account. And although high-interest rates have always been one of the main reasons people opt for offshore banks, this is becoming an even more essential perk since banks in Europe and the US have begun imposing negative interest rates. Also, interest rates by overseas banks are paid without tax deductions.

Moreover, offshore banks offer services that may not be available from domestic banks such as anonymous bank accounts, so make sure that you learn everything that your offshore bank can provide for your specific banking needs.

Personal Bank Accounts

Personal bank accounts are ideal if you are simply looking to deposit your money in a reliable bank. Some banks will require an initial deposit, but some will not even ask for that.

Corporate Bank Accounts

Corporate bank accounts are great for companies or businesses that do business abroad, and they are designed to cater to international needs.

Investment Bank Account

Offshore investment bank accounts are ideal if you are looking for a bank with high-interest rates.

Offshore bank accounts can be ideal for any individual who is interested in protecting their money and assets so don’t hesitate to contact Starting Business for a tailored solution.

Mariliza Karrera Content Writer
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