Offshore Banking
In today’s fast-paced and highly competitive globalized economy, corporations need to be highly mobile. This means that they must have quick access to their cash assets at a moment’s notice. More often, home countries have strict laws on the withdrawal of large amounts of cash, especially if they are in dollars.
Corporations then seek sanctuary in countries with less strict guidelines and create what is termed as offshore bank accounts. This is a practice around the globe for big companies. The favorite destinations for offshore banking are Antigua and Barbuda, Bahamas, Belize, British Virgin Islands, Delaware, Gibraltar, Guernsey, Isle of Man, Jersey, Liberia, Mauritius, Nevis, Panama, and Turks & Calicos Islands.
Offshore banking allows corporations to be more flexible with their cash assets, enabling them to pursue opportunities at a faster pace. These offshore banks also shield them from the prying eyes of institutions that are after their financial assets.
This practice is a widely accepted fact among financial and business circles. Even governments have no laws preventing offshore backing. There are, however, international laws that regulate these offshore banking systems to monitor and catch money-laundering activities and other illegal transactions. One such regulation is the IBC, or the International Banking Corporation, that mandates all accountholders to have an incorporated entity in the host country.
Most offshore banks provide their clients with a debit-and-credit automated teller card to allow them to withdrawal and deposit cash to their accounts wherever they are and whenever they choose. This is an important feature for most corporations, as they do not have to constantly fly in to their offshore bank to transact their business. Through online banking, they can also transfer their funds to anywhere in the world. Another advantage of an offshore account is that it is not subjected to taxes. So depositors and accountholders can enjoy the full benefits of the interest rates. |